Value vs Growth Funds Investment Strategies

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Questions and Answers

What is the minimum percentage of total assets that an open-ended equity scheme predominantly investing in small-cap stocks must invest in equity and equity-related instruments of small-cap companies?

  • 70%
  • 75%
  • 60%
  • 65% (correct)

In a dividend yield fund, what is the primary investment focus of the scheme?

  • Low market capitalization stocks
  • Dividend yielding stocks (correct)
  • Growth stocks
  • Government bonds

What strategy does a value fund primarily follow?

  • Growth investing
  • Speculative trading
  • Value investment strategy (correct)
  • Day trading

Which type of fund might focus on investing in shares of companies related to infrastructure, construction, cement, steel, telecom, and power?

<p>Thematic fund (C)</p> Signup and view all the answers

What is the maximum number of stocks a Focused Fund can invest in?

<p>30 stocks (C)</p> Signup and view all the answers

In a Sectoral/Thematic fund, how is the investment focus different from a Focused Fund?

<p>Invests in specific sectors or themes (C)</p> Signup and view all the answers

What is the primary strategy employed by a value fund?

<p>Investing in fundamentally strong undervalued companies (C)</p> Signup and view all the answers

What differentiates growth funds from value funds?

<p>Growth funds feature companies with expected earnings growth higher than average rate. (C)</p> Signup and view all the answers

What is a key characteristic of focused funds?

<p>High selection risks due to lower diversification (C)</p> Signup and view all the answers

What is a distinctive feature of Equity Linked Savings Schemes (ELSS)?

<p>Subject to lock-in period but can be redeemed, transferred, or pledged (A)</p> Signup and view all the answers

What is a common focus of thematic funds?

<p>Investing based on specific themes or trends in the market (C)</p> Signup and view all the answers

What is a risk associated with sector funds?

<p>Performance highly dependent on the performance of the specific sector (A)</p> Signup and view all the answers

What is the main objective of funds targeting long-term appreciation?

<p>Aiming for gains in the value of the portfolio over time (D)</p> Signup and view all the answers

Which category of funds invests in a diverse mix of securities across sectors and market capitalizations?

<p>20 Diversified equity fund (D)</p> Signup and view all the answers

What characterizes large-cap funds?

<p>Invest in stable blue-chip companies (D)</p> Signup and view all the answers

Why are mid-cap companies more susceptible to economic downturns?

<p>They may not be able to withstand slowdowns in revenues and profits (B)</p> Signup and view all the answers

In which type of funds is the risk of performance significantly being affected by a poor sector performance low?

<p>20 Diversified equity fund (A)</p> Signup and view all the answers

What distinguishes market segment-based funds?

<p>Investing in companies of a specific market size (A)</p> Signup and view all the answers

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