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NISM Series XXI-B: Portfolio Managers exam preparation
For PMS fund managers: portfolio construction, equity and bond strategies, risk, performance measurement and the SEBI rules you operate under.
NISM Series XXI-B exam pattern
NISM Series XXI-B syllabus, unit by unit
The exam covers 12 units. The percentage is the share of questions each unit usually carries, so spend your time in that proportion.
Unit 1 Investment landscape and securities markets6%
Investing versus speculation, objectives and constraints, and how primary and secondary markets work.
- Return objectives and constraints.
- Primary and secondary markets.
- Market participants.
Unit 2 Stocks and equity research10%
Equity as an asset, fundamental and technical analysis, valuation ratios and governance.
- Fundamental analysis.
- Valuation ratios.
- Technical analysis.
- Corporate governance.
Unit 3 Fixed income securities8%
Bond features, yield, credit and interest rate risk, and valuation.
- Bond terms.
- Yield and price.
- Duration.
- Credit risk.
Unit 4 Derivatives and mutual funds8%
Futures and options, how portfolio managers use them, and mutual funds as a comparison and a building block.
- Futures and options.
- Hedging uses.
- Mutual fund structure and measures.
Unit 5 Role, registration and operations of portfolio managers12%
PMS service types, SEBI registration, client onboarding, fees, custody and reporting.
- Discretionary, non-discretionary and advisory.
- Net worth and minimum investment.
- Fees.
- Reports and disclosures.
Unit 6 Portfolio management process and portfolio theory12%
Asset allocation, the steps of the process, and modern portfolio theory.
- Investment policy statement.
- Strategic and tactical allocation.
- Efficient frontier.
- Diversification.
Unit 7 Capital market theory and factor models7%
The capital market line, CAPM, the security market line and multi-factor models.
- CML.
- CAPM and beta.
- SML.
- Factor models.
Unit 8 Market efficiency and behavioural finance6%
How efficient markets are, anomalies, and the biases that affect investors.
- Forms of efficiency.
- Anomalies.
- Biases.
Unit 9 Risk and risk management8%
Types of risk, measurement tools and how managers control risk.
- Risk process.
- VaR and drawdown.
- Liquidity and concentration.
- Controls.
Unit 10 Equity and fixed income portfolio strategies9%
Passive and active approaches, smart beta, core-satellite, and bond portfolio strategies.
- Passive and active.
- Smart beta and factors.
- Core-satellite.
- Bond strategies.
Unit 11 Performance measurement, attribution and valuation8%
Return calculation, risk-adjusted measures, attribution, benchmarking, GIPS and valuing securities.
- TWRR and MWRR.
- Sharpe, Treynor, alpha.
- Attribution.
- Valuation.
Unit 12 Rebalancing, taxation, regulation and ethics6%
Why and how portfolios are rebalanced, tax in the client's hands, and the conduct and legal obligations of managers.
- Rebalancing rules.
- Tax.
- Insider trading and AML.
- Code of conduct.
Try 4 sample questions
These are from Mock 1. Open the free mock to see the correct answer and the reason behind each one.
Q1. Which term is described here? The CML shows the risk-return trade-off of efficient portfolios that combine the risk-free asset with the market portfolio.
- Bond immunisation
- Top-down analysis
- Capital market line
- Portfolio manager defined
Q2. Which term is described here? A clearing corporation guarantees settlement of trades and manages counterparty risk, with delivery of securities and funds through depositories and banks.
- Active strategy
- Multi-factor models
- Corporate governance
- Clearing and settlement
Q3. Which statement best describes “Front running”?
- SEBI requires portfolio manager performance to be reported on a uniform basis, with returns computed using TWRR through a central platform.
- Front running is trading ahead of a client's large order for the manager's own benefit and is a prohibited practice.
- Anomalies, such as size and value effects, are patterns that appear to contradict market efficiency.
- A portfolio manager may charge a fee that is fixed, return-based or a mix of both, but cannot charge an upfront fee directly or indirectly from clients.
Q4. Which statement best describes “Benchmark selection”?
- Smart beta uses rules-based weights based on factors such as value or low volatility instead of market capitalisation.
- A good benchmark is appropriate, investable, measurable and specified in advance, and reflects the manager's style.
- The disclosure document gives clients the manager's investment approach, fees, risks, performance and other facts, and is filed with SEBI.
- The yield curve plots yields against maturity, and an upward-sloping curve means longer maturities have higher yields.
How to prepare for NISM Series XXI-B
- Download the study guide and read the first three pages.
- Study the biggest units first. Their weight shows on this page.
- Take Mock 1 after one pass through the guide.
- Move to the next mock only when you clear the pass mark by 15 marks.
- Redo every wrong answer. Each one names its unit.
The app also lists your weak units after each mock and runs in English, Hindi or Gujarati. Mock tests and study material are in English.
Frequently asked questions
How many questions are there in NISM Series XXI-B?
The NISM Series XXI-B (Portfolio Managers) exam has 120 multiple-choice questions carrying 150 marks, to be answered in 180 minutes.
What is the passing score for NISM Series XXI-B?
The pass mark is 60%. Aim to clear 75% in practice mocks before you book the real exam.
Is there negative marking in NISM Series XXI-B?
Yes. The negative marking is 25% of marks. Practise leaving a question blank when you are unsure.
Is the NISM Series XXI-B study guide free?
Yes. UpperCrust Academy gives a free 37-page study guide PDF for NISM Series XXI-B, written unit by unit.
Are the NISM Series XXI-B mock tests free?
Yes. You get 5 full-length mock tests with the answer and the reason for every question. Sign in once with your mobile number or Google to start.
Is this affiliated with NISM?
No. UpperCrust Academy is independent preparation material from UpperCrust Wealth. Confirm the latest syllabus and exam rules on the official NISM website.
More NISM exams
UpperCrust Academy is independent study material from UpperCrust Wealth. It is not affiliated with NISM, SEBI or AMFI. For education only. Not investment advice. Always confirm the latest syllabus and rules on the official NISM website.