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. 046What is the total expense ratio and what sits inside it?Costs, plans and commissionsCorephone / first roundIndian AMCsDistribution and sales

   Say this

   The TER is every recurring cost the scheme charges its unitholders, expressed as a percentage of daily net assets, and it is accrued daily so the NAV you see is already net of it. It includes the management fee, distributor commission in a regular plan, RTA and custody fees, audit, marketing and GST on the management fee.

   Then walk it

   1. Line items: investment management and advisory fee, trustee fee, registrar and transfer agent charges, custodian fees, audit fees, marketing and selling expenses including distributor commission, listing fees where applicable, and GST on the management fee.
   2. It is charged daily, roughly one basis point a day for a 2 percent TER, which is why there is never a separate fee debit in your account statement.
   3. What is outside it and therefore additional: brokerage and transaction costs on securities trades, up to a small permitted limit, and securities transaction tax. Those reduce NAV without appearing in the TER number.
   4. Exit load is also outside the TER, and since 2012 the exit load collected goes into the scheme, not to the AMC. So it is a transfer between investors, not a cost to the fund.
   5. The one number that matters in practice is the difference between the direct and regular plan of the same scheme, because that gap is almost entirely distributor commission. In Indian equity funds it is commonly 50 to 120 basis points.
   6. The reason to care: 1 percent a year compounds to roughly 20 percent of the final corpus over 25 years. That is not a rounding error, it is the difference between retiring on 1 crore and on 80 lakh.

   Where candidates lose it

   Not knowing that brokerage and STT sit outside the TER, or that exit load goes to the scheme rather than the AMC. Both are standard follow-ups. And always convert the percentage into a compounded rupee figure — a candidate who can quantify the drag sounds like someone who has advised a client.

   Expect next

   • What is excluded from the TER?
   • Who keeps the exit load?
   • How much does 1 percent cost over 25 years?
2. 048What is the difference between a direct and a regular plan, and how big is the gap over twenty years?Costs, plans and commissionsCorephone / first roundIndian AMCsDistribution and sales

   Say this

   Same portfolio, same fund manager, same scheme — the only difference is that a regular plan pays distributor commission out of the scheme and a direct plan does not. In Indian equity funds the gap is typically 50 to 120 basis points a year, and over twenty years that compounds to roughly 15 to 20 percent of the final corpus.

   Then walk it

   1. Both plans have been mandatory since January 2013 and carry separate NAVs. The direct plan's NAV is always higher for the same scheme launched on the same day, and the divergence widens every year.
   2. Put numbers on it: a 20,000 rupee monthly SIP for twenty years at 12 percent gross builds about 1.83 crore. Take 1 percent more in fees and you land closer to 1.62 crore. That 21 lakh is the commission, compounded.
   3. The distributor's defence is that they earn it — goal setting, asset allocation, keeping the client invested in a crash. For many investors that is genuinely worth more than 1 percent, because the behavioural mistake costs far more than the fee.
   4. The counter is that the commission is paid whether or not any advice happens, it is invisible in the NAV, and it is paid on the whole corpus every year rather than on the advice given once.
   5. Practical route for a direct investor: the AMC's own site or app, the MF Central and RTA platforms, or a flat-fee registered investment adviser who recommends direct plans and charges separately — which is the cleanest structure, because the cost is visible and the incentive is not tied to the product.
   6. How I would answer it in an AMC interview: state the arithmetic honestly, then say the choice is between paying for behaviour management inside the product or buying it separately at a visible price.

   Where candidates lose it

   Either trashing regular plans or defending commissions reflexively. Both signal a script. Give the compounded rupee number, then concede the behavioural value of a good distributor. That balance is what a distribution-side interviewer is actually listening for.

   Expect next

   • If direct is cheaper, why do most investors still hold regular plans?
   • What is the RIA model and how is it different?
   • Can an investor switch from regular to direct without tax?

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.