Mutual Funds Interview Questions | Vskills (2024)

FAQs

What are the interview questions on mutual funds? ›

A mutual fund is a managed portfolio of investments that investors can purchase shares of. Mutual fund managers pools money from many investors and invest the money in securities such as stocks, bonds, and short-term debt. The combined holdings of the mutual fund are known as its portfolio.

Mutual funds let you pool your money with other investors to "mutually" buy stocks, bonds, and other investments. They're run by professional money managers who decide which securities to buy (stocks, bonds, etc.) and when to sell them. You get exposure to all the investments in the fund and any income they generate.

There are three primary structures of mutual funds: open-end funds, unit investment trusts, and closed-end funds. Exchange-traded funds (ETFs) are open-end funds or unit investment trusts that trade on an exchange.

Investing in MFs is an effective way to grow wealth and achieve your financial goals, if you're willing to play long-term. By investing in an MF, you stand to benefit from Diversification, Professional Fund Management, Tax Benefits and Long-term Returns.

Low Fees or Expenses

Mutual funds with relatively low expense ratios are generally always desirable, and low expenses do not mean low performance. In fact, it is very often the case that the best-performing funds in a given category are among those that offer expense ratios below the category average.

A 401(k) is an employer-sponsored, tax-deferred retirement plan. The employer chooses the 401(k)'s investment portfolio, which often includes mutual funds. But a mutual fund is not a 401(k).

A mutual fund is a company that makes investments for people who share common financial goals. This allows a group of investors to pool their assets in a diversified portfolio of stock, bond, options, commodities, or money market securities.

Mutual funds pool money from multiple retail investors. Retail investors receive a share in the form of units. The fund managers, using their expertise, then invests in stocks and bonds on behalf of the investors. Once the fund earns returns, it is distributed to the investors in the proportion of their investment.

A mutual fund is a collective investment vehicle that collects & pools money from a number of investors and invests the same in equities, bonds, government securities, money market instruments. The money collected in mutual fund scheme is invested by professional fund managers in stocks and bonds etc.

What are the two main types of mutual funds? ›

Most mutual funds fall into one of four main categories – money market funds, bond funds, stock funds, and target date funds. Each type has different features, risks, and rewards.

While they can be actively or passively managed by fund managers, most ETFs are passive investments pegged to the performance of a particular index. Mutual funds come in both active and indexed varieties, but most are actively managed. Active mutual funds are managed by fund managers.

In interviews, your 2-3 investment pitches are, by far, the most important part. These must be well-thought-out and somewhat tailored to the fund's strategy, and each one should contain a recommendation, company/asset background, investment thesis, catalysts, valuation, and risk factors.