NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Mutual Fund Scheme Selection
A client with a moderate risk appetite wants a single scheme that automatically keeps a mix of equity and debt and rebalances between them, avoiding the need for her to switch. Which category fits this need best?
A balanced advantage or dynamic asset allocation fund fits best because the fund manager shifts the equity-debt mix within the scheme and rebalances it, so the client need not switch herself. Sectoral, gilt and overnight funds do not provide such a combined, managed allocation.
- ASectoral equity fund
- BBalanced advantage or dynamic asset allocation fundCorrect
- CGilt fund with 10-year constant duration
- DOvernight fund
Explanation
Balanced advantage funds shift between equity and debt dynamically, often based on valuations, and rebalance within the scheme. Sectoral, gilt and overnight funds do not offer a managed equity-debt mix.
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