NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Mutual Fund Scheme Selection
An investor with a moderate risk appetite and a 7-year horizon wants a single scheme that automatically maintains a mix of equity and debt, shifting allocation as market valuations change. Which category is most appropriate?
A dynamic asset allocation or balanced advantage fund fits best. It shifts between equity and debt automatically based on valuations, giving a moderate-risk investor a managed mix, unlike overnight, sectoral or index funds that do not adjust allocation this way.
- ADynamic asset allocation or balanced advantage fundCorrect
- BOvernight fund
- CSectoral fund
- DIndex fund tracking the Nifty 50
Explanation
Balanced advantage or dynamic asset allocation funds vary equity exposure based on valuation models, suiting moderate-risk investors. Overnight funds are pure short-term debt, sectoral funds are concentrated, and an index fund stays fully in equities.
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