SWOT ANALYSIS OF ASSET CLASSES
Equity
Strength
 Shareholders are entitled to a
portion of the company's profits.
 High rate of return as more risk is
associated
 Shareholders receives dividends
and there is also an increase in the
price or value of assets (capital
appreciation).
Opportunities
 Considered the best investment
opportunity for the highest returns
in the long term.
 Dividend paid on stock is not tax
deductible.
 Investment in equity provides
Voting rights in the company for
important decision making.
Commodities (Gold)
Strength
 Investors generally buy gold as a
hedge against the equity market.
 Gold is recognized as one of the
most valuable assets in the world.
 Gold is a highly liquid assets and
can be used for the purpose of
investment.
Opportunities
 There is demand for gold across
the word because of different
events as people purchase gold in
wedding or any other auspicious
Weakness
 Investment in equity is associated
with high degree of risk.
 Extra costs like brokerage and
transaction costs need to incur.
 There is high speculation in equity
investment which leads to no
security and uncertain return.
Threats
 To proceed with raising funds,
legal and regulatory matters must
be addressed.
 High Chances of loss as Capital
risk is the possibility that an entity
will lose money from an
investment in equity.
 There is high fluctuations in the
price.
Weakness
 Gold storage has costs including
cost of insurance.
 Gold prices have been volatile in
recent times.
Threats
 The gold market is also subject to
speculation as other commodities
are, especially through the use of
futures contracts and derivatives.
 event.
 Gold can be used to diversify the
portfolio.
 Gold can be used as collateral for
loans.
Fixed Income Securities (Bonds)
Strength
 Highly secured- backed by the
RBI
 Rate of return does not fluctuate
 Cash flow at maturity are known   Suitable for risk averse investor
Opportunities
 Can be provided as a collateral
security
 Loan can be taken against
investment in government security
Real Estate
Strength
 The Law of Diminishing Returns
never apply here
 There is a high rate of return
 Relatively low risk investment
 Like most commodities, the price
of gold is driven by supply and
demand as well as speculation.
However unlike most other
commodities, hoarding (saving)
and disposal plays a larger role in
affecting its price than its
consumption.
 Gold prices have been volatile in
recent times.
Weakness
 Low rate of return
 Not a liquid investment avenue
 Only suitable when markets are
not doing well
 No early withdrawal is allowed
Threats
 Fixed deposits, which are more
liquid than government securities
 RBI relief bonds, which offer
higher interest rates.
Weakness
 Not a very liquid investment
 There are many government
regulations involved with in
investment into land
 There are possibilities of
litigations
 Small amount cannot be invested
 Need bulk amount to invest in
land
Opportunities Threats
 High rate of industrialization and  Government take-over
urbanization
 Private builders
 It has multiple usage- residential,
agricultural and commercial  Natural calamity

 It can be provided as a collateral

security
 REIT an upcoming concept can
change way of real estate
investment in India

Mutual funds
Strength Weakness
 No taxes are charged on dividends  Cannot be provided as a collateral
received in the hands of the security
investors as well as the mutual
 Long term capital losses cannot be
fund house
set off against capital gains •
 There is a stable average rate of
 Suitable for no risk tolerance
return
investors
 Functions of the mutual fund are
 Maturity amount not known as
regulated by SEBI, thus are well
rate of return fluctuates
governed
 Payment of entry and exit load and
 High liquidity is there as invested
high maintenance charges
money can be withdrawn at any
point of time
 Long term capital gains are also
tax free
Opportunities Threats
 Investors can write cheque out of  Fixed deposits are safer and more
their money market mutual fund stable- regulated by RBI
account
  Suitable for investors and
corporate to park their surplus
funds for a short period of time
 Allows investors with small
amount of money to invest in a
number of schemes
 Investors looking for higher return
will prefer investing in Equity
market
 Investors ready to make long term
investments will look at land,
government security as other
options as they are safer and can
be provided as a collateral security

PRODUCT NOTES
EQUITY

 An equity investment is money that is invested in a company by purchasing shares of that

company in the stock market. These shares are typically traded on a stock exchange.
 Equity share represents the ownership; hence the holder will be having voting rights in
the company.
 There is relatively high risk associated with investment in equities and as a return the
shareholders receives dividend.

NON CONVERTIBLE DEBENTURES (NCD)

 Non-convertible debentures (NCDs) are a financial instrument that is used by companies

to raise long-term capital. This is done through a public issue. NCDs are a debt
instrument with a fixed tenure and people who invest in these receive regular interest at a
certain rate.
 Investors who require regular interest at a certain rate invest in NCD.
 NCDs have a fixed maturity date and the interest can be paid along with the principal
amount either monthly, quarterly, or annually depending on the fixed tenure specified.
They benefit investors with their supreme returns, liquidity, low risk and tax benefits
when compared to that of convertible debentures.

PUBLIC PROVIDENT FUND (PPF)

  The Public Provident Fund is a savings-cum-tax-saving instrument in India,. The aim of
the scheme is to mobilize small savings by offering an investment with reasonable returns
combined with income tax benefits.
 It is a long-term investment scheme popular among individuals who want to earn high but
stable returns.
 Since this plan is mandated by the government, it is backed up with guaranteed returns to
protect the financial needs of the investors.

NATIONAL PENSION SCHEME (NPS)

 National Pension Scheme (NPS) India is a voluntary and long-term investment plan for
retirement under the purview of the Pension Fund Regulatory and Development
Authority (PFRDA) and Central Government.
 Largely focused on one’s retirement. It is designed to encourage systematic saving during
the subscriber’s working life with an aim to offer old-age income.
 National Pension Scheme (NPS) has higher return.

SENIOR CITIZEN SAVING SCHEME (SCSS)

 A Senior Citizens’ Saving Scheme (SCSS) is a government-backed retirement benefits

programme. Senior citizens resident in India can invest a lump sum in the scheme,
individually or jointly, and get access to regular income along with tax benefits.
 SCSS has high interest rate, risk free, and exempted from tax

SUKANYA SAMRIDHI SCHEME (SSY)

 Sukanya Samriddhi Yojana (SSY) is a government-backed small savings scheme for the
benefit of girl child.
 Higher Rate of Return on Investment and eligible for 100% tax deduction.

MUTUAL FUNDS
  A mutual fund is a company that pools money from many investors and invests the
money in securities such as stocks, bonds, and short-term debt. The combined holdings of
the mutual fund are known as its portfolio.
 Mutual funds give small or individual investors access to professionally managed
portfolios of equities, bonds, and other securities.
 A mutual fund holds a variety of investments which can make it easier for investors to
diversify than through ownership of individual stocks or bonds

EQUITY BASED MUTUAL FUNDS

 Equity Funds invest in the shares of different companies. The fund manager tries to offer
great returns by spreading his investment across companies from different sectors or with
varying market capitalizations.
 Equity funds are known to generate better returns than term deposits or debt-based funds.
There is an amount of risk associated with these funds since their performance depends
on various market conditions.

DEBT BASED MUTUAL FUNDS

 Debt funds invest in securities which generate fixed income like treasury bills, corporate
bonds, commercial papers, government securities, and many other money market
instruments.
 The returns are usually not affected by fluctuations in the market. Therefore, debt
securities are considered to be low-risk investment options.

HYBRID BASED MUTUAL FUNDS

 Hybrid funds are a combination of equity and debt investments which are designed to
meet the investment objective of the scheme. Each hybrid fund has a different
combination of equity and debt targeted at different types of investors.
 New investors who are unsure about stepping into the equity markets tend to turn towards
hybrid funds
  Hybrid funds are considered to be riskier than debt funds but safer than equity funds.
They tend to offer better returns than debt funds and are preferred by many low-risk
investors.

MUTUAL FUND INDEX FUND

 An index fund is a type of mutual fund or exchange-traded fund that seeks to track the
returns of a market index.
 An index mutual fund is said to provide broad market exposure, low operating expenses,
and low portfolio turnover.

EXCHANGE TRADED FUNDS (ETF)

 Exchange traded funds pool the financial resources of several people and use it to
purchase various tradable monetary assets such as shares, debt securities such as bonds
and derivatives. It is like a Mutual Fund that one can buy and sell in real-time at a price
that change throughout the day.
 ETFs involves diversification, trades like a stock, less fees, and limited capital gain tax.

PORTFOLIO MANAGEMENT SERVICES (PMS)

 Portfolio Management Services (PMS), service offered by the Portfolio Manager, is an

investment portfolio in stocks, fixed income, debt, cash, structured products and other
individual securities, managed by a professional money manager that can potentially be
tailored to meet specific investment objectives.
 Portfolio Management Services (PMS) helps in risk reduction.

SYSTEMATIC INVESTMENT PLAN (SIP)

 Systematic Investment Plan (SIP) is an investment route offered by Mutual Funds

wherein one can invest a fixed amount in a Mutual Fund scheme at regular intervals– say
once a month or once a quarter, instead of making a lump-sum investment.
 It helps in investing in a disciplined manner without worrying about market volatility and
timing the market.
Task: 2

Name: Medha Singh

Designation: Finance Intern

College: Christ University