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</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</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</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</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</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</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</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</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</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</p> Signup and view all the answers

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

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

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

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

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

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

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

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

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

    <p>Debt</p> Signup and view all the answers

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

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

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

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

    What type of instruments do equity funds primarily invest in?

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

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