Current Affairs · Mutual Fund Regulations
Regarding the structural concept of portfolio duplication in the Indian mutual fund industry, which of the following best explains why broad thematic categories like ESG and Business Cycle funds frequently generate significant overlap with other equity schemes?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1Structural duplication occurs because thematic funds are legally prohibited from diversifying into mid-cap and small-cap stocks, forcing them into a limited pool of blue-chip securities.
- 2High portfolio overlap is a deliberate risk-mitigation strategy used by fund houses to neutralize the impact of conflicting ESG ratings provided by different agencies.
- 3Due to the broad nature of these investment themes, fund managers often converge on the same high-liquidity, large-cap stocks like Reliance and HDFC Bank to meet stability and performance requirements.✓
- 4The Securities and Exchange Board of India (SEBI) mandates that thematic funds must maintain a minimum 25% exposure to Nifty 50 stocks to ensure market-linked stability.
Correct answer
Due to the broad nature of these investment themes, fund managers often converge on the same high-liquidity, large-cap stocks like Reliance and HDFC Bank to meet stability and performance requirements.
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Current Affairs?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Mutual Fund Regulations MCQs →Want more practice questions on Mutual Fund Regulations?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Current Affairs · Mutual Fund Regulations