NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Overview of Alternative Investment Funds (AIFs)
Which of the following AIFs is classified as a Category III AIF?
A hedge fund using complex or leveraged trading strategies is a Category III AIF. Venture capital, social venture and infrastructure funds are Category I because they invest in socially or economically desirable sectors, whereas Category III funds trade with complex strategies and leverage.
- AA venture capital fund investing in start-ups
- BA hedge fund employing complex or leveraged trading strategiesCorrect
- CA social venture fund
- DAn infrastructure fund
Explanation
Category III AIFs employ diverse or complex trading strategies and may use leverage, including hedge funds and PIPE funds. Venture capital, social venture and infrastructure funds fall under Category I, which invests in sectors considered socially or economically desirable.
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