Mutual Fund Mastery interview preparation

Questions

100

Traced to a firm

32

Firms

19

Updated

September 2026

Asked at

All firmsVanguard5BLBlackRock3FTFranklin Templeton3Invesco3PIMCO3Fidelity Investments2J.P. Morgan2Morningstar2Neuberger Berman2SCSchroders2T. Rowe Price2Amundi1BMBNY Mellon1Goldman Sachs1Man Group1Northern Trust1SSState Street1Sycamore Partners1WMWellington Management1

Topic

All topicsFund structure and regulation7NAV and operations6Scheme categorisation4Equity schemes5Debt schemes7Risk, liquidity and disclosure7Index funds and ETFs6Hybrid and solution schemes3Costs, plans and commissions6SIP and investor mechanics5Performance measurement6Taxation5Distribution, compliance and NISM5Portfolio construction and advice5Estimation and numeracy5Markets and industry6Career and fit12

Level

AnyCoreIntermediateHard

Type

AnyTechnicalCaseFitBrainteaserMarket view

1. 024What is yield to maturity?Debt schemesIntermediatetechnicalPIMCOFixed Income · Sydney · 2025

   Say this

   The single discount rate that makes the present value of all a bond's future cash flows equal its current market price. It is the internal rate of return you earn if you buy at that price, hold to maturity, collect every coupon, and reinvest each coupon at that same yield.

   Then walk it

   1. It solves price for yield. Price is observable, the cash flows are contractual, so YTM is what falls out — which is why you can compare a five-year and a ten-year bond on one number.
   2. Price and yield move inversely. If yields rise, the fixed coupons are worth less, so the price falls. How much it falls is duration.
   3. The three assumptions people skip: you hold to maturity, the issuer does not default, and every coupon is reinvested at the YTM. The reinvestment assumption is the one that breaks in the real world — a falling rate environment means you reinvest coupons at less than the YTM and realise less than it promised.
   4. In a mutual fund context, the portfolio YTM on a fact sheet is a weighted average of the holdings' yields, gross of the expense ratio. So the number you actually earn is roughly portfolio YTM minus TER, assuming nothing defaults and the manager does not trade.
   5. And a high portfolio YTM is not a good thing by itself. A debt fund quoting 9 percent when the equivalent gilt is at 7 is telling you it holds credit risk or long duration. Read the yield alongside the rating profile and the Macaulay duration or it is meaningless.
   6. For a callable or a puttable bond you would use yield to call or yield to worst instead, because maturity is no longer the binding date.

   Where candidates lose it

   Defining YTM as the coupon rate or as the current yield. Current yield is coupon over price and ignores capital gain to maturity. Also, the reinvestment assumption is the part that separates a memorised definition from an understood one — say it before you are asked.

   Expect next

   • What if the coupons cannot be reinvested at that rate?
   • A debt fund's fact sheet shows a 9 percent YTM. What do you check next?
   • How does YTM differ from current yield and from yield to call?

   Reported by candidates at PIMCO (Fixed Income, Sydney, 2025). Source: Wall Street Oasis.

2. 037What's the difference between an ETF and a mutual fund?Index funds and ETFsCorephone / first roundVanguardGeneralist · Malvern · 2026PIMCOCompliance · Los Angeles · 2024

   Say this

   An ETF is a mutual fund whose units trade on an exchange. You buy it from another investor at a market price during market hours; with a regular open-ended fund you transact with the AMC at end-of-day NAV. That one structural difference drives everything else — cost, tax, minimum size and how liquidity actually works.

   Then walk it

   1. Dealing: ETF units trade intraday at whatever the market pays, which can be above or below the underlying value. A mutual fund transacts at one NAV struck after the close, the same price for everybody that day.
   2. You need a demat account and a broker for an ETF. That is a real barrier in India and the main reason index funds, not ETFs, dominate retail passive money here while the reverse is true in the US.
   3. Creation and redemption happens only in large blocks with authorised participants, so the AMC never has to sell portfolio securities to fund a retail exit. In an open-ended fund, a redemption wave forces the manager to sell.
   4. Cost: ETFs are usually cheaper because there is no registrar servicing individual folios, but the investor pays brokerage, the bid-ask spread and any premium or discount to fair value. The headline TER understates the true cost of owning a thinly traded ETF.
   5. In the US, the in-kind redemption mechanism also gives ETFs a real capital gains advantage. In India that advantage does not exist, because the fund itself is a pass-through either way — worth saying, as it separates someone who understands the structures from someone repeating a US article.
   6. Which I would recommend depends entirely on the investor: an SIP investor should use an index fund, and an institution putting 50 crore to work in one day should use the ETF.

   Where candidates lose it

   Saying an ETF is passive and a mutual fund is active. That is a common conflation and it is wrong — the difference is the trading wrapper, not the strategy. There are active ETFs and passive index mutual funds. Lead with the exchange-traded structure.

   Expect next

   • Why do Indian retail investors use index funds rather than ETFs?
   • Explain the creation and redemption mechanism.
   • When would an ETF trade at a discount to its fair value?

   Reported by candidates at Vanguard (Generalist, Malvern, 2026); PIMCO (Compliance, Los Angeles, 2024). 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.