NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Mutual Fund Scheme Selection
A distributor is advising a first-time investor with a low risk appetite and a five-year horizon who wants a single scheme combining equity and debt with limited equity exposure. Which category best fits this need?
A Conservative Hybrid Fund fits best because it holds mainly debt, about 75-90%, with 10-25% in equity, giving limited equity exposure in one scheme. Sectoral, small cap and focused funds are concentrated equity categories with high risk, unsuitable for a low-risk investor.
- ASectoral/Thematic Fund
- BSmall Cap Fund
- CConservative Hybrid FundCorrect
- DFocused Fund
Explanation
Conservative hybrid funds invest 75-90% in debt and 10-25% in equity, offering a blend with limited equity risk. Sectoral, small cap and focused funds are high-risk, concentrated equity categories unsuitable for a low-risk investor.
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