NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Scheme Related Information
Which type of mutual fund scheme primarily seeks to replicate the returns of a market index such as the Nifty 50?
An Index Fund seeks to replicate the returns of a market index such as the Nifty 50 by holding the index constituents in the same weights. It is passively managed, unlike sectoral, value or focused funds, which follow active investment mandates.
- AIndex FundCorrect
- BSectoral Fund
- CValue Fund
- DFocused Fund
Explanation
An index fund holds the constituents of a chosen index in the same proportion and aims to track its returns, with minimal tracking error. Sectoral, value and focused funds are actively managed with different mandates.
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