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. 008What makes up a NAV?NAV and operationsCoretechnicalMan GroupEquity Hedge · Boston · 2019

   Say this

   Market value of all the scheme's assets, plus receivables, minus all liabilities and accrued expenses, divided by the number of units outstanding. The two things people forget are the accrued expenses — the TER is charged daily, not annually — and that units outstanding changes every day in an open-ended fund.

   Then walk it

   1. Assets: securities at market value, cash and bank balances, accrued interest and dividend receivable, and receivables on trades done but not settled.
   2. Liabilities: payables on unsettled purchases, redemption payable, and the accrued portion of the expense ratio, management fee, audit fee, custody and RTA charges.
   3. Divide by units outstanding at the end of the day, after the day's creations and cancellations. In an open-ended scheme there is no fixed unit count — units come into existence when money comes in.
   4. The daily accrual of expenses is the bit that trips people. A 1.8 percent TER is charged as roughly one basis point every business day, so NAV is always net of fees. There is no separate fee deduction from your folio.
   5. Rounding conventions matter in practice: liquid and debt scheme NAVs are published to four decimals, equity to two. On a liquid fund earning 6 percent a year, the fourth decimal is real money for a treasury investor.
   6. The limitation: NAV is only as honest as the valuation of the assets. For listed equity it is a closing price and beyond argument. For an unlisted or thinly traded bond it is a model or an agency price, and that is where NAV disputes live.

   Where candidates lose it

   Giving the formula and stopping. Add the accrued expense line and the moving unit count, and name the valuation weakness on illiquid debt. A candidate who says 'NAV is assets minus liabilities over units' has answered a textbook; one who says 'and that is why an illiquid debt NAV is an estimate' has answered the question.

   Expect next

   • Whose NAV is wrong if a bond in the portfolio has not traded for three weeks?
   • How often is the expense ratio charged?
   • By when must an AMC publish NAV?

   Reported by candidates at Man Group (Equity Hedge, Boston, 2019). Source: Wall Street Oasis.

2. 009Walk me through how an AMC actually strikes its NAV each evening.NAV and operationsIntermediatetechnicalFund operationsRegistrars and transfer agents

   Say this

   It is a nightly assembly line. Fund accounting pulls closing prices, applies the valuation policy to anything that does not have a clean price, books the day's trades and corporate actions, accrues income and expenses, takes the unit count from the RTA, strikes the NAV, reconciles with the custodian, gets sign-off, and uploads to AMFI and the website by 11 pm.

   Then walk it

   1. Prices first: exchange closing prices for equity, and for debt the security-level prices published by the valuation agencies, CRISIL and ICRA, which SEBI mandates the whole industry to use so two AMCs cannot carry the same bond at different values.
   2. Then trade capture. Every buy and sell done that day, at contract note level, plus any corporate action — dividend ex-date, bonus, split — has to be reflected on the right date or the NAV is wrong.
   3. Then accruals: interest income accrued on debt holdings, and the day's slice of TER, management fee, custody, RTA and audit fees.
   4. Then units. The RTA gives the day's valid purchases and redemptions after applying the cut-off rules, which sets the closing unit count. This is why the cut-off rules and the NAV are the same problem.
   5. Then reconciliation with the custodian's holding statement and the bank balance, a four-eyes review, trustee-mandated controls, and upload to the AMFI site and the AMC website by 11 pm. Fund of funds get until 10 am the next business day because they need the underlying NAVs.
   6. Where it breaks: a missed corporate action, a stale debt price, or a late bank credit that moves a large purchase to the wrong day. All three show up as an NAV restatement, which is a reportable incident to the trustee and to SEBI.

   Where candidates lose it

   Describing it as a calculation rather than a controlled process. Operations interviews at an AMC or an RTA are testing whether you know where the errors come from. Name the corporate action and the stale-price failure modes, and mention the 11 pm publication deadline — that detail says you have seen a real NAV pack.

   Expect next

   • What happens if you discover tomorrow that today's NAV was wrong?
   • Why does SEBI mandate common valuation agency prices for debt?
   • Who signs off on the NAV before it is published?
3. 010Explain the cut-off timing rules for mutual fund transactions.NAV and operationsCoretechnicalIndian AMCsFund operations

   Say this

   Three pm for everything except liquid and overnight funds, where purchase cut-off is 1:30 pm. But since February 2021 the time stamp alone does not decide anything on a purchase — you get the NAV of the day the money is actually available to the scheme for utilisation, whatever the amount.

   Then walk it

   1. Purchases in all schemes other than liquid and overnight: application received by 3 pm and funds realised by 3 pm gets the same day's NAV. Late on either leg and it is the next business day.
   2. Liquid and overnight funds: 1:30 pm for purchase, and because these schemes earn from the day of allotment, an application in by 1:30 with funds available gets the closing NAV of the previous day.
   3. Redemptions: 3 pm across the board, including liquid, and the NAV is the same day's if you are inside the cut-off.
   4. The 2021 change is the one interviewers probe. Before it, applications up to two lakh got the time-stamp NAV even if the money had not arrived. Now the realisation test applies to every rupee, which killed the practice of getting a favourable NAV on an unfunded application.
   5. Practical consequence for a distributor: a cheque or a NEFT initiated at 2:55 pm does not get you today's NAV, because it will not be credited and available for utilisation by 3. On a treasury ticket in a liquid fund, one day of NAV on 10 crore at 6 percent is about 1.6 lakh rupees.
   6. The exception to know: switches are treated as a redemption in one scheme and a purchase in the other, and the purchase leg still needs the redemption proceeds to be available, so a switch from an equity fund into a liquid fund does not get same-day liquid NAV.

   Where candidates lose it

   Quoting 3 pm and 1:30 pm and stopping. The realisation-of-funds rule is the whole modern answer, and the liquid fund previous-day NAV catches almost everyone. Say both.

   Expect next

   • An investor's money hits the scheme account at 3:10 pm. Which NAV does he get?
   • Why do liquid funds give the previous day's NAV?
   • How are switches time-stamped?
4. 012How do you value a corporate bond in a scheme portfolio that has not traded for three weeks?NAV and operationsHardsuperdayFund operationsFixed income desks

   Say this

   You do not use your own judgement. SEBI requires every AMC to value debt at the security-level prices supplied by the two mandated valuation agencies, CRISIL and ICRA, using the average of the two. Everything on a scheme's debt book is marked to market now — the old amortisation shortcut is gone.

   Then walk it

   1. The agencies build a matrix from whatever did trade: benchmark government yields, plus a credit spread for that rating and maturity bucket, adjusted for any traded prices in the same issuer.
   2. If there is a trade in the security above a minimum size on that day, the traded price governs. Where there is none, the matrix price applies, which is why two identical bonds of the same issuer and maturity carry the same price across every AMC in the country.
   3. The history matters here. India used to allow amortisation for short residual maturities, first under 60 days then under 30. After 2019 and 2020 SEBI moved the whole debt book to mark to market, so a liquid fund's NAV now moves with rates instead of pretending it cannot.
   4. A default or a downgrade below investment grade triggers a different path: the agencies publish a haircut matrix, the security is written down to the indicated recovery value, and the AMC may create a segregated portfolio.
   5. The AMC can deviate from the agency price only with documented justification, and it must report every deviation to the trustee and disclose it. That audit trail is the control.
   6. The honest limitation: a matrix price is a model, not a market. In a stressed market the printed NAV is achievable only for small redemptions, which is exactly the gap that swing pricing and the 10 percent liquid asset rule were designed to plug.

   Where candidates lose it

   Saying you would mark it at cost or amortise it. That was the pre-2019 world and quoting it dates you badly. The strong answer names the two agencies, says average of the two, and then admits that a matrix price is not an exit price.

   Expect next

   • What happens to the price when the issuer is downgraded to default?
   • Why did SEBI move away from amortisation?
   • How does this interact with swing pricing?
5. 013Walk me through the KYC and onboarding process for a new mutual fund investor in India, and tell me what the RTA does in it.NAV and operationsCorephone / first roundRegistrars and transfer agentsDistribution and sales

   Say this

   PAN, Aadhaar-based verification, proof of address, bank account details, a FATCA and CRS declaration and a nomination or an explicit opt-out. The record goes to a KRA and to the central KYC registry, so once it is validated the investor can transact across every AMC in the country. The RTA is the entity that holds the folio, applies the transaction and maintains the record.

   Then walk it

   1. Identity and address: PAN, which is the unique key for the whole system, plus Aadhaar-based e-KYC or a video-based in-person verification. Physical IPV still exists for cases that cannot be done digitally.
   2. Bank and tax layer: a bank account in the investor's own name for the payout mandate, FATCA and CRS self-certification, and tax residency status. Third-party payments are not accepted, which is a money-laundering control, not paperwork.
   3. Central registration: the record is filed with a KYC Registration Agency such as CVL or CAMS KRA and with CKYC at CERSAI. That is what makes KYC portable across fund houses.
   4. Since 2024 the status label matters. A KYC record is validated only if the PAN and Aadhaar are linked and the documents are of the accepted type. Registered or on-hold records can block fresh purchases at a new AMC, which is now the single most common onboarding failure in the industry.
   5. Nomination is mandatory unless the investor signs an opt-out. Getting this wrong creates a transmission problem years later that the family, not the investor, has to solve.
   6. RTA's role: CAMS or KFintech creates the folio, time-stamps the application, applies the cut-off rules, allots units, runs the SIP mandate, generates the consolidated account statement and holds the KYC. Most entry-level operations hiring in this industry is at an RTA, and this question is really asking whether you know that.

   Where candidates lose it

   Listing documents like a form-filling exercise. The examinable points are that KYC is centralised and portable, that the validation status introduced in 2024 can block a transaction at a new AMC even for an old investor, and that third-party payments are barred. Mention nomination — it is where most real folios are defective.

   Expect next

   • What is the difference between a KYC validated and a KYC registered record?
   • Can someone else pay for my SIP?
   • How does a nominee actually claim units after death?

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.