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. 080A client invests 10,000 a month for 25 years. The fund earns 12 percent gross and charges 2 percent. How much of the final corpus goes in fees?Estimation and numeracyHardtechnicalDistribution and salesIndian AMCs

   Say this

   About a third. At 12 percent net the corpus is roughly 1.9 crore; at 10 percent net it is about 1.34 crore. So a 2 percent annual fee costs around 55 lakh, which is close to 30 percent of what the investor would otherwise have had — on total contributions of 30 lakh.

   Then walk it

   1. Set it up: 10,000 a month for 300 months is 30 lakh of contributions. At 12 percent annual, roughly 1 percent a month, the SIP future value comes to about 1.9 crore. At 10 percent it is about 1.34 crore.
   2. The difference, roughly 55 lakh, is what the 2 percent extracted. Note it is nearly twice the total money the investor put in, which is the line that makes a client sit up.
   3. Why it is so large: the fee is charged every year on the whole accumulated balance, so in the final years you are paying 2 percent on more than a crore. The fee compounds against you exactly as the returns compound for you.
   4. A rule of thumb worth carrying: over 25 years each 1 percent of annual fee costs roughly 18 to 20 percent of the final corpus. Over 35 years it is closer to 25 percent.
   5. Now make it practical. The realistic Indian choice is not 2 percent against zero, it is a regular plan at about 1.8 percent against a direct plan at about 0.8, or an index fund at 0.15. That 1 percent gap is about 20 lakh in this example, and the 1.65 percent gap against an index fund is far more.
   6. And the honest counterweight: if paying the distributor is what stops this investor from stopping the SIP in a 30 percent drawdown, the fee bought something. Compare the fee to the behavioural failure it prevents, not to zero.

   Where candidates lose it

   Not being able to do the arithmetic approximately without a calculator. You do not need precision — say 12 percent gives about 1.9 crore, 10 percent about 1.34, so the fee costs roughly 55 lakh. And do not stop at the number: the comparison a client faces is regular versus direct versus index, not 2 percent versus nothing.

   Expect next

   • Do the same for a 1 percent difference.
   • So is a distributor ever worth 1 percent a year?
   • What does the same fee cost over 35 years?
2. 082Estimate how long it would take a 25,000 crore small cap fund to sell a quarter of its portfolio.Estimation and numeracyHardcase studyIndian AMCsRisk and compliance

   Say this

   Somewhere between two and four weeks of trading, and that is in a normal market. Build it from position size against daily volume: a quarter of 25,000 crore is about 6,000 crore, spread across maybe 60 to 70 holdings, and a mid-sized Indian small cap stock trades perhaps 20 to 50 crore a day with the fund able to take only a fraction of that.

   Then walk it

   1. Set up the arithmetic. If the fund holds 70 stocks, the average position is around 350 crore, and selling a quarter pro rata means about 90 crore per name.
   2. Now the constraint. If a stock trades 30 crore a day and you accept taking 20 to 25 percent of daily volume before you start moving the price, you can sell about 7 crore a day. Ninety crore takes roughly 13 trading days for that name.
   3. But the distribution is what kills you. The largest and most liquid holdings can go in a day or two; the illiquid tail, often the highest-conviction small positions, can take months. The average hides the problem, so the honest answer is a range with the tail called out.
   4. Cross-check it against the published data. AMFI's mandatory monthly stress test for mid and small cap funds gives exactly this number — days to liquidate 25 percent and 50 percent of the portfolio — and large small cap funds have reported figures above 20 trading days for half the book.
   5. Then the stress adjustment. The volumes used in the calculation are normal-market volumes, and in a falling market small cap volumes contract sharply at the same moment redemptions arrive. Roughly doubling the published number is a sensible working assumption.
   6. The conclusion an interviewer wants: this is why large small cap funds hold cash and large caps as a buffer, why several have soft-closed lump sum subscriptions, and why the stress test disclosure was introduced in March 2024 in the first place. Capacity is a real constraint in this category, not a theoretical one.

   Where candidates lose it

   Producing a single confident number. The right shape is a build-up, a range, and an explicit note that the illiquid tail dominates the tail risk. Not knowing that AMFI already publishes this number monthly is the other failure — it makes the estimate look like guesswork instead of a cross-check.

   Expect next

   • Where would you find the fund's own published figure?
   • What should the manager do about it?
   • How does this change your view on the fund's capacity?

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.