Mutual Fund Mastery interview preparation

Indian AMCs, distributors, registrars and the global fund houses that hire for the same skills — covering the trust structure, NAV and cut-off rules, SEBI scheme categorisation, debt risk and the Potential Risk Class matrix, passives, costs, taxation and distribution. Every question is either traced to a named firm from a public candidate report, or tagged at desk level when we could not trace it; we do not invent attributions.

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100 questions, mapped to the firms that asked them

Questions: 100
Traced to a firm: 32
Firms: 19
Updated: September 2026

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075Talk me through diversification. How many mutual funds does a portfolio actually need?Portfolio construction and adviceIntermediatetechnicalNorthern TrustAsset Management · Chicago · 2025
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Four to six for almost anyone. Diversification comes from owning uncorrelated assets, not from owning many funds, and beyond about four equity funds you are adding overlap and cost, not risk reduction. Most Indian retail portfolios hold twelve schemes that together are one large cap fund with a higher expense ratio.
Then walk it
1. The principle: risk falls when you add assets whose returns do not move together. Two large cap funds in the same market have a correlation near 0.95 and an enormous overlap of holdings, so the second one reduces almost nothing.
2. Test it directly. Pull the top 20 holdings of the funds a client owns and compute the overlap. It is routine to find 60 to 70 percent common holdings across four supposedly different equity schemes, and showing a client that table is the most persuasive thing you can do.
3. What actually diversifies an Indian portfolio: moving down the market cap curve, adding debt with a different driver, adding gold, and adding international equity, because domestic and global equity cycles genuinely differ.
4. So the shape I would use: one core equity fund or index fund, one mid or small cap, one debt fund matched to the horizon, one liquid fund, plus optionally gold and an international sleeve. That is five or six line items and it covers everything.
5. The costs of over-diversification are real and under-discussed: you dilute any manager skill you were paying for, you make rebalancing a multi-scheme tax event, and you make the portfolio impossible to monitor, so it never gets reviewed.
6. One honest caveat: for a very large portfolio there is a case for splitting across AMCs to limit single-manager and single-house operational risk. That argument justifies maybe two managers per sleeve, not twelve.
Where candidates lose it
Equating number of funds with diversification. The answer that lands names portfolio overlap as the measurable test and points out that the second large cap fund adds cost, not diversification. Mentioning that rebalancing across many schemes is a taxable event in India shows you have advised real clients.
Expect next
- How would you measure overlap between two funds?
- Does holding funds from different AMCs help?
- Where does gold fit, and how much?
Reported by candidates at Northern Trust (Asset Management, Chicago, 2025). Source: Wall Street Oasis.

Firm tags come from public, anonymous candidate reports on Wall Street Oasis: strong signal, not sworn testimony. Firms are named as the places a question was reported, not as partners of Fin Maverick. Answers are written for this page to show how to think out loud; they are not scripts to recite.

100 questions, mapped to the firms that asked them

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Then walk it

Where candidates lose it

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