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NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Mutual Fund Scheme Selection

A retired client needs regular monthly income, has low risk appetite, and has a time horizon of about 3 years for this money. Which scheme choice is generally most consistent with these needs?

A conservative hybrid or short-duration debt fund with a systematic withdrawal plan best fits, since it offers lower volatility and regular cash flows for a low-risk investor with a three-year horizon. Sectoral, small-cap and thematic equity funds are too volatile for this need.

  1. ASectoral equity fund with a growth option
  2. BConservative hybrid fund or short-duration debt fund with a systematic withdrawal planCorrect
  3. CSmall-cap fund with a growth option
  4. DThematic fund investing in a single theme

Explanation

Low risk appetite and a short horizon call for debt-oriented or conservative hybrid schemes, with a systematic withdrawal plan providing periodic cash flow. Sectoral, small-cap and thematic equity funds are highly volatile and unsuitable for a 3-year income need.

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