n NISM Certifications
V-A NISM Series V-A
Medium

Diversified equity funds are less risky compared to Thematic funds in terms of _______ risk.

Practice question from NISM series VA - Mid length mock test — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Duration

  2. B

    Size

  3. Concentration

    Correct answer

  4. D

    Style

Why this is the answer

Thematic funds are focused on a single theme (e.g., infrastructure, healthcare) and tend to have high concentration risk. If that theme underperforms, the fund’s returns can be significantly affected. In contrast, diversified equity funds spread investments across multiple sectors and themes, thus reducing concentration risk.

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