An asset class is a grouping of investments that exhibit similar characteristics

and are subject to the same laws and regulations. Asset classes are thus made
up of instruments that often behave similarly to one another in the
marketplace.
Why Are Asset Classes Useful?
Financial advisors focus on asset class as a way to help investors diversify their portfolios to maximize returns.

Investing in several different asset classes ensures a certain amount of diversity in investment selections.
Each asset class is expected to reflect different risk and return investment characteristics and perform differently in any
given market environment.

What Are the Most Popular Asset Classes?

Historically, the three main asset classes have been
• Equities (stocks)
• Fixed income (bonds)
• Cash equivalent or money market instruments.

Currently, most investment professionals include real estate, commodities, futures, other financial derivatives,
and even cryptocurrencies in the asset class mix.
INDIAN INVESTMENT IN DIFFERENT ASSET CLASSES
1. Physical Assets

Physical Assets (in crores)

2020 2019 2018 Physical Assets (In Crores)

Gold ₹ 1,90,50,021.00 ₹ 80,94,187.00 ₹ 74,51,305.00 ₹ 2,00,00,000.00

₹ 1,80,00,000.00
Real Estate ₹ 80,14,576.00 ₹ 74,52,944.00 ₹ 69,56,802.00
₹ 1,60,00,000.00

Diamond ₹ 8,30,484.00 ₹ 8,58,156.00 ₹ 8,38,142.00 ₹ 1,40,00,000.00

₹ 1,20,00,000.00
Silver ₹ 2,85,408.00 ₹ 2,42,771.00 ₹ 2,24,276.00
₹ 1,00,00,000.00

Platinum ₹ 8,265.00 ₹ 8,517.00 ₹ 7,683.00 ₹ 80,00,000.00

₹ 60,00,000.00
Other gems & jewellery ₹ 1,39,487.00 ₹ 1,37,656.00 ₹ 1,31,911.00
₹ 40,00,000.00

Total ₹ 2,83,28,241.00 ₹ 1,67,94,231.00 ₹ 1,56,10,119.00 ₹ 20,00,000.00

₹-
2020 2019 2018

Gold Real Estate Diamond Silver Platinum Other gems & jewellery
INDIAN INVESTMENT IN DIFFERENT ASSET CLASSES
2. Financial Assets
Financial Assets (in crores)
2020 2019 2018
Direct Equity 36,11,459 52,10,394 52,10,394
Fixed Deposits & Bonds 48,69,066 45,82,098 45,82,098
Insurance 38,02,042 36,90,729 36,90,729
Saving Deposits 37,45,525 25,78,663 34,22,381
Cash 23,49,716 20,52,220 20,52,220
Provident Fund 20,43,845 16,62,863 16,62,863 Financial Assets (in crores)
Mutual Funds 11,90,875 13,77,036 13,77,036
Unlisted Equity 13,03,212 10,54,325 10,54,325 60,00,000

NRI Deposits 9,83,601 9,02,087 9,02,087

Small Savings 10,32,575 8,61,047 8,61,047 50,00,000

Pension Funds 9,01,652 7,32,902 7,24,907

Current Deposits 2,11,771 7,76,722 4,87,281 40,00,000

Alternative Investment 2,00,047 1,49,118 1,49,118

International Assets 45,783 34,138 34,138 30,00,000

Total 2,62,91,169 2,56,64,342 2,62,10,624

20,00,000

10,00,000

0
2020 2019 2018

Direct Equity Fixed Deposits & Bonds Insurance Saving Deposits

Cash Provident Fund Mutual Funds Unlisted Equity
NRI Deposits Small Savings Pension Funds Current Deposits
Alternative Investment International Assets
Investment In Percentage Is There In Each Asset Class

Gold
More than 75% of Indian households own gold in some form or another, according to the survey carried
out among both rural and urban households across the country.

Real Estate
An online survey shows that 57% of people prefer to invest in real estate. The survey was conducted by
Ana rock Property Consultant and received 2,797 responses from across income levels, age groups and
geographies.

Equities
Of India's 1.36 billion people, only about 3.7% invest in equities, compared with about 12.7 per cent in China,
according to stock depository data on the number of investment accounts (and assuming one account per
person).
Fixed Income
As per the SEBI survey, 95% of the Indian families prefer investing in bank FDs, PPF, Bonds, Post Office as they
are not market-linked instruments, and less than 10% were keen on investing in mutual funds or stocks.

Which asset class has the maximum amount of

investment in India and why?
Fixed income
Fixed deposits or income are one of the most common and popular investment options that are
available to Indian investors. The most popular financial asset of most Indian households. Household
Savings is mainly invested in traditional fixed income investments like bank Fixed Deposits (FDs),
Recurring Deposits(RD), EPF, PPF, Government small savings schemes etc.
Reason:-
1. Low-risk investment
The prime benefit offered by fixed deposits in comparison to modern investment options like equities and
mutual funds is the low risk of the investment. Fixed deposits are considered to be among the safest
investment options like Government Bonds.

2. Assured and guaranteed returns

The returns on fixed deposits are free from any market volatility. These returns are fixed in nature. The rate of
interest is determined by the bank and is higher than the savings bank account. The bank is obliged to honor
the interest payment on the fixed deposits at fixed intervals.

3. Easy access to FDs

With the increase in banking technology, gone are the days when the investors had to personally go to the banks to
start an FD or renew it. It can easily be done now through internet banking or mobile banking at the convenience of
the investor.
4. Tax benefits
Tax deductions are another benefit of fixed deposits. Investors can get a tax deduction of up to Rs. 1,50,000 under
Section 80C as part of the multiple investments that are eligible under this section. It is to be noted that these tax-saving
FDs come with a lock-in period of 5 years.

5. A relatively liquid form of investment

Many investors have a misconception that the FDs are not liquid investments and investors cannot withdraw the
investment until maturity. While tax saving FDs do have a lock-in period, investors can withdraw their FD at any point in
time.