SWOT ANALYSIS OF THE ASSET CLASSES
REAL ESTATE
STRENGTHS WEAKNESS
● EASIER TO UNDERSTAND ● HIGH TRANSACTION COST
● IMPROVABLE ● LOW LIQUIDITY
● HEDGE AGAINST INFLATION ● REGULAR MAINTENANCE AND
● LESS RISK MANAGEMENT
● CREATES LIABILITIES
OPPORTUNITIES THREAT
● FINANCED AND LEVERAGED ● NATURAL DISASTERS
● YIELDING BETTER RETURNS ● DAMAGE BY TENANTS
● GLOBAL DEMAND ● COMPETITION WITH OTHER
ASSETS
DEBT/BONDS
STRENGTH WEAKNESS
● FIXED RATE OF INTEREST ● PRINCIPAL IS NOT RETURNED
● INTEREST EXPENSES ARE TAX WHEN ASKED BY BOND/DEBT
FREE HOLDER
● GOVERNMENT BONDS ARE ● INTEREST RATES ARE NOT AS
SECURED HIGH AS EQUITIES
OPPORTUNITIES THREAT
● HIGH RATE OF RETURN ● IF THE PARTY DEFAULTS
● SOME BONDS ARE TAX FREE PAYMENT,WE MAY LOSE
● OWNERSHIP CAN BE RETAINED INTEREST AS WELL AS PRINCIPAL
● IF THE INTEREST RATE IS HIGH
THE BOND PRICE WILL INCREASE
EQUITY
STRENGTH WEAKNESS
● HIGHER DIVIDEND ● LOW MARKET VALUE
● VOTING RIGHTS ● RISKY INVESTMENT
● CAPITAL APPRECIATION ● UNCERTAIN RETURNS
● RIGHT SHARES ● COST OF EQUITY
● GOOD LIQUIDITY POSITION
OPPORTUNITIES THREAT
● HIGHER RETURN ● CHANCE OF LOSS
● CAPITAL APPRECIATION ● FLUCTUATIONS IN MARKET
● RIGHT IN LIQUIDATION
GOLD
STRENGTH WEAKNESS
● VALUABLE ASSET ACROSS THE ● ATTACHMENT WITH THE ASSET
WORLD WHICH RESULTS IN MAKING IR
● GOOD HEDGE AGAINST EQUITY ILLIQUID
MARKET ● COST AND SECURITY THREAT IS
● CAN INVEST IN PAPER AND INVOLVED IN STORING PHYSICAL
PHYSICAL FORMAT GOLD
● PROVIDES BALANCE IN
INVESTMENT PORTFOLIO
OPPORTUNITIES THREAT
● DEMAND INCREASES WITH ● PRICE FLUCTUATION RESULTS IN
INCREASE IN POPULATION LOW RETURNS
RESULTING IN VALUE INCREASE ● CHANCES OF GETTING LOW
● CAN BE USED AS COLLATERAL QUALITY GOLD
FOR LOANS
MUTUAL FUND
STRENGTH WEAKNESS
● LARGER NUMBER OF POTENTIAL ● POOR PARTICIPATION OF RETAIL
CUSTOMERS INVESTORS
● VOLATILITY OF BANK INTEREST ● LACK OF FOCUS
RATES ● UNDER PERFORMANCE
● LIQUIDITY TO INVESTORS AT ANY ● POOR SERVICE CONDITIONS
TIME
● GOVERNMENT SUPPORT BY WAY
OF TAX CONCESSION
OPPORTUNITIES THREAT
● HIGH LEVEL OF SAVINGS ● INCREASING COMPETITION
● ON-LINE MODE OF TRADING ● HIGH LEVEL OF VOLATILITY
SYSTEMS
● LIBERALIZED BUSINESS
ENVIRONMENT
PRODUCT NOTE
1.DIRECT EQUITY
● Equity shares are long-term financing sources for any company.
● Investors in such shares hold the right to vote, share profits and claim
assets of a company.
● The value in case of equity shares can be expressed in various terms like
par value, face value, book value and so on.
● The dividend rate relies upon the obtainability of the surfeit capital.
However, there is no fixed rate of dividend on the equity capital.
● Equity share capital remains with the company. It is given back only
when the company is closed.
● Gives High Return with High Risk.
2.NCD(Non Convertible Debentures)
● financial instrument that is used by companies to raise long-term
capital. This is done through a public issue.
● debt instrument with a fixed tenure and people who invest in these
receive regular interest at a certain rate.
● done through a public issue
● High interest rates
● Listed on stock exchange and are easy to withdraw
3.PUBLIC PROVIDENT FUNDS(PPF)
● It is a long-term investment scheme popular among individuals who
want to earn high but stable returns
● ideal for individuals with a low risk appetite
● plan is mandated by the government, it is backed up with guaranteed
returns
● provide the benefit of availing loans against the investment amount
4. NATIONAL PENSION SCHEME(NPS)
● National Pension Scheme (NPS) is a government-sponsored pension
scheme.
● The scheme allows subscribers to contribute regularly in a pension
account during their working life
● calculated by using the principle of power of compounding.
● NPS makes for a great retirement savings scheme
● Both NPS and PPF are stable investment options with guaranteed
returns.
5.SENIOR CITIZEN SAVING SCHEME
● Senior Citizens Savings Scheme (SCSS) is primarily for the senior
citizens of India.
● scheme offers a regular stream of income with the highest of safety
and tax saving benefits
● The interest rate on SCSS is currently 7.4%
● An individual can open multiple Senior Citizen Savings Scheme (SCSS)
accounts either individually or as a joint investor.
● The tenure of this scheme is 5 years, therefore the deposits mature after
5 years from the date of account opening.
6.SUKANYA SAMRIDDHI YOJANA
● You can open an SSY account for your girl child at any time until she is
10 years of age.
● You have to make a minimum deposit of Rs 250 a year. If the minimum
amount is not deposited, you have to pay a fine of Rs 50.
● The maximum amount that can be deposited in a year is Rs. 1.5 lakh.
● Amounts invested in SSY can be deducted from taxable income up to
Rs. 1.5 lakh per year under Section 80C of the Income Tax Act.
● Interest earned, and the amount on maturity are also tax-free.
● SSY accounts can be transferred to any branch of the post office or
bank.
7. EQUITY MUTUAL FUNDS
● Great for first-time investors
● No minimum investment amount
● Systematic Investment
● invests principally in stocks
● Equity funds are also known as stock funds.
● If you have a long-term goal, then it is better to invest in equity funds.
8. DEBT MUTUAL FUNDS
● Lowest Risk
● Low Capital Appreciation
● Underlying Debt Securities are Rated for Credit Quality
● Safer Investment Offer
● Tax Efficiency
9.HYBRID MUTUAL FUNDS
● Can invest in more than one asset class
● LTCG taxed at 10-20%
● Hybrid Funds don't offer guaranteed returns
● Automatic Rebalancing
● Caters to various risk profiles
10.INDEXED MUTUAL FUNDS
● can be taken as a long-term, less risky form of investment’’
● success of these funds depends on the choice of index and low volatility
● Due to the passive management of these funds, they involve lesser
expense ratio and thus, low expenses
● known to provide broad market exposure and low portfolio turnover to
the investors
● Low cost
● Effective market hypothesis
11.EXCHANGE TRADED FUNDS
● Exchange Traded Funds are a good investment option for the small
investors
● they offer greater tax benefits than the usual mutual funds.
● The ETF has a low annual fee as compared to traditional mutual fund.
● The Exchange Traded Funds are designed to replicate the performance
of the commodity or the underlying index
12.SYSTEMATIC INVESTMENT PLAN
● Small and regular investment
● Power of compounding
● Ease of investing
● Ideal for investors not eager to make lump sum payments
● Flexible mode of investment for mutual funds investors
13.PORTFOLIO MANAGEMENT
● Allocation of assets
● Diversification of investment
● Used to form liquid and more stable investments.
● Used to diversify the risks of the asset classes by proper asset
allocation.
● Maximizes the return on your investment
14.GOLD INVESTMENT
● Maintain its purchasing power over time
● Gold has ready marketability and Liquidity
● Gold storage has costs, including cost of insurance
● Gold cannot be destroyed
● The value of Gold is not dependent on a counterparty
SUBMITTED BY
MABEL ROBERT
JUNIOR RESEARCH ANALYST INTERN
AMF B24
