Portfolio Management interview preparation

Questions

100

Traced to a firm

40

Firms

24

Updated

September 2026

Asked at

All firmsBLBlackRock4Vanguard4WMWellington Management4Amundi3ACAQR Capital Management3Neuberger Berman3SCSchroders3Man Group2MSCI2Northern Trust2AllianceBernstein1Apollo Global Management1Blackstone1BMBNY Mellon1Carlyle Group1Fidelity Investments1Goldman Sachs1Invesco1Millennium Management1MSMorgan Stanley1NUNuveen1PIMCO1SSState Street1TPTPG1

Topic

All topicsPortfolio theory5Factor models8Asset allocation11Rebalancing3Portfolio construction7Benchmarks and tracking error5Performance measurement8Risk management6Fixed income and LDI5Currency and global3Implementation and costs5Active versus passive6India markets7Brainteasers5Career and fit16

Level

AnyCoreIntermediateHard

Type

AnyTechnicalCaseMarket viewFitBrainteaser

1. 083How large is the Indian mutual fund industry? Work it out from scratch.BrainteasersIntermediatetechnicalIndian asset managementMutual funds

   Say this

   Build it from flows and market value. Monthly SIP flows of roughly 25,000 crore rupees, plus lump sums, against an equity market capitalisation of around 400 lakh crore. Industry assets under management are of the order of 70 to 75 lakh crore rupees, so a bit under 900 billion dollars.

   Then walk it

   1. Route one, top down from the market. Indian listed market capitalisation is roughly 400 to 450 lakh crore rupees. Domestic mutual funds own something like 9 to 10 percent of it, which gives 35 to 45 lakh crore of equity assets, and equity is a bit over half of total industry assets.
   2. Route two, bottom up from flows. SIPs run at about 25,000 crore a month, so 3 lakh crore a year, and SIPs are maybe a third to a half of gross equity inflows. Accumulate a decade of that plus market appreciation and you land in the same place.
   3. Route three, sanity check per capita. There are roughly 4 to 5 crore unique mutual fund investors in a country of 140 crore people, so penetration is still under 5 percent of the population. That is the number that makes the growth case, and it is the number an interviewer is really fishing for.
   4. Compare to the benchmark: Indian mutual fund assets are around 16 to 18 percent of GDP, against 120 percent plus in the United States. That gap is the industry's entire growth thesis.
   5. State the composition too, because it changes the answer's meaning: roughly half equity, a large chunk in debt and liquid funds dominated by corporate treasuries, and a fast-growing passive segment driven by EPFO and by large cap index funds.
   6. Then say what you would check: the AMFI monthly data release gives assets, flows, folio counts and the SIP book. Naming the actual source and admitting your estimate has a 20 percent error band is better than pretending to precision.

   Where candidates lose it

   Guessing a number with no route to it. This is an estimation question, so the structure is the answer: build it two ways, cross-check, and give a range. Also get the units right; confusing crore and lakh crore is an instant credibility loss in an Indian interview, and quoting US-scale numbers for India is the other common tell.

   Expect next

   • What share of Indian household savings is that?
   • How fast is the passive share growing?
   • What would take penetration from 5 to 15 percent?
2. 084A fund charges one percent a year and the market returns eight percent. How much of the investor's terminal wealth does the fee take over thirty years?BrainteasersIntermediatetechnicalAsset managementWealth management

   Say this

   About a quarter. At 8 percent, one rupee becomes 10.06 over thirty years. At 7 percent it becomes 7.61. So the fee takes roughly 24 percent of the terminal wealth, even though it was only 1 percent a year.

   Then walk it

   1. The arithmetic: 1.08 to the thirtieth is about 10.06, and 1.07 to the thirtieth is about 7.61. The ratio is 0.757, so 24 percent of the wealth is gone.
   2. The reason the effect is so much bigger than it sounds: the fee is charged on the whole balance every year, so you lose the compounding on every rupee of fee as well as the fee itself. The loss grows with the horizon.
   3. A quick approximation worth knowing for the interview: the fraction of terminal wealth lost is roughly the fee times the number of years, so 1 percent over 30 years is about 30 percent, slightly overstated because of compounding effects. It gets you to the right order instantly.
   4. Now scale it to a real decision. An Indian equity fund with a 1.8 percent regular plan expense ratio against an index fund at 0.2 percent is a 1.6 point gap. Over 30 years that is roughly 35 to 40 percent of terminal wealth. That is the entire active-passive debate expressed as a number.
   5. And the asymmetry that makes it decisive: the fee is certain and the alpha is not. To justify the 1.6 percent the manager needs to beat the index by 1.6 percent consistently, and SPIVA-style data says most do not over that horizon.
   6. The caveat, so it does not sound dogmatic: fee is only one term. A cheap fund tracking a badly constructed index, or a cheap fund the investor panics out of, can do worse than an expensive fund they hold through a drawdown. Cost is the most reliable predictor of relative performance, not the only one.

   Where candidates lose it

   Answering '30 percent, it is just one percent times thirty years' without doing the compounding, or the reverse, getting lost in the arithmetic and never producing a number. Do the estimate fast, then convert it into the real decision, regular plan versus index fund, because that is what makes the answer land in an asset management interview.

   Expect next

   • Now do it for a 1.8 percent Indian regular plan against a 0.2 percent index fund.
   • What outperformance would the manager need to justify the fee?
   • Is cost the best predictor of fund performance?

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.