NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Scheme Related Information
Which of the following best describes a Sectoral/Thematic fund under SEBI's categorisation norms?
Under SEBI's categorisation, a sectoral or thematic fund must invest at least 80% of its total assets in equity and equity-related instruments of the chosen sector or theme. This concentration gives higher risk than diversified equity funds because performance depends on a single sector or theme.
- ASectoral funds invest at least 80% in a particular sector; thematic funds invest at least 80% in a particular themeCorrect
- BSectoral funds must invest 65% in debt and 35% in equity
- CBoth must invest only in large cap stocks across sectors
- DBoth must hold at least 90% in government securities
Explanation
SEBI requires a Sectoral/Thematic equity scheme to invest a minimum of 80% of total assets in equity and equity-related instruments of the particular sector or theme. The other options describe hybrid, large cap or gilt-type mandates, which are not applicable.
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