Passive Investment Funds and Index Schemes
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Questions and Answers

What type of funds are designed to mirror a specific index and not perform better than the market?

  • Active funds
  • ETFs (correct)
  • Debt funds
  • Hedge funds

In passive funds tracking a specific index, who determines the portfolio composition?

  • Underlying index (correct)
  • Investors
  • The fund manager
  • Stock exchange

What characteristic distinguishes Exchange Traded Funds (ETFs) from actively managed funds?

  • Outperformance of the index
  • Higher expenses
  • Portfolio determined by the fund manager
  • Real-time trading on stock exchanges (correct)

What play a significant role in determining the weightage of each share in a passive fund's portfolio?

<p>Composition of the underlying index (C)</p> Signup and view all the answers

What is the main advantage of passive funds over actively managed funds in terms of running costs?

<p>Lower running costs due to less active management (B)</p> Signup and view all the answers

Which type of scheme might have an investment portfolio primarily focused on equity shares and equity-related investments?

<p>Equity schemes (A)</p> Signup and view all the answers

What is the minimum percentage of total assets that an index fund must invest in securities of a specific index?

<p>95 percent (D)</p> Signup and view all the answers

According to SEBI regulations, what percentage of the Real Estate Mutual Fund scheme's portfolio must be held in physical assets?

<p>35 percent (A)</p> Signup and view all the answers

In Real Estate Mutual Fund Schemes, what types of assets can at least 75 percent of the net assets be invested in?

<p>Real estate assets, mortgage-backed securities, equity shares, or debentures of real estate companies (C)</p> Signup and view all the answers

How often are the assets held by Real Estate Mutual Fund Schemes valued by accredited valuers?

<p>Every 90 days (C)</p> Signup and view all the answers

What is the criterion for listing Real Estate Mutual Fund Schemes on a stock exchange?

<p>Being closed-end funds (C)</p> Signup and view all the answers

In a Fund of Funds scheme, what is the minimum percentage of total assets that must be invested in the underlying fund?

<p>95 percent (A)</p> Signup and view all the answers

What is the minimum value of assets owned or proposed to be owned by a REIT coming out with an initial offer?

<p>Rs. 500 crore (A)</p> Signup and view all the answers

In an initial offer from a REIT, what is the minimum subscription amount?

<p>Rs. 2 lakh (D)</p> Signup and view all the answers

What is the minimum size of the units a person can subscribe to in an InvIT initial offer?

<p>Rs. 10 lakh (C)</p> Signup and view all the answers

When did significant spurts in the size of the mutual fund industry in India occur?

<p>Late 80s and mid-90s (D)</p> Signup and view all the answers

In which sector do Infrastructure Investment Trusts (InvIT) invest?

<p>Infrastructure sector (D)</p> Signup and view all the answers

What is the minimum offer size for a REIT initial offer?

<p>Rs.250 crore (B)</p> Signup and view all the answers

What is the primary source of return for investors in equity investments?

<p>Appreciation in investment value (D)</p> Signup and view all the answers

Which asset class is described as an income-oriented asset in the text?

<p>Debt (B)</p> Signup and view all the answers

What determines the conditions such as coupon interest payable on debt?

<p>Terms of issue (A)</p> Signup and view all the answers

In what type of funds do investors find investment in both debt and equity?

<p>Hybrid funds (D)</p> Signup and view all the answers

What is the characteristic of Solution-Oriented Schemes mentioned in the text?

<p>Investing for retirement or children's future (D)</p> Signup and view all the answers

What type of instruments do equity funds primarily invest in?

<p>Equity instruments issued by companies (B)</p> Signup and view all the answers

What is the purpose of an in-person verification (IPV) performed by the intermediary in the KYC process?

<p>To assign a 14 digit KYC Identification Number (KIN) (D)</p> Signup and view all the answers

Which entity in the mutual fund industry facilitates payment processing in the online market place?

<p>Payment Aggregators (D)</p> Signup and view all the answers

What is the main advantage of using payment aggregators for mutual fund houses?

<p>Facilitate payment via credit cards and bank transfers without setting up merchant accounts (D)</p> Signup and view all the answers

What is the role of a Custodian in the mutual fund industry?

<p>Hold the assets of the mutual fund (B)</p> Signup and view all the answers

Why are most investor service centres usually offices of Trustees?

<p>To oversee the compliance and service aspects of the funds (A)</p> Signup and view all the answers

Why is it not necessary for mutual funds to set up merchant accounts when using payment aggregators for transactions?

<p>Because aggregators handle payment processing without the need for separate merchant accounts (B)</p> Signup and view all the answers

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