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    Task 4 Aditya Gupta

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    ADITYA GUPTA
    The document discusses different asset classes that Indian investors invest in, including physical assets like gold, real estate, diamonds, and financial assets like direct equity, fixed deposits, insurance, and mutual funds. It provides data on the amounts invested in each asset class from 2020 to 2018. Fixed income assets, which include fixed deposits, bonds, and postal savings, have the highest investment levels as they are considered low-risk, assure guaranteed returns, are easy to access, provide tax benefits, and are relatively liquid compared to other options. Nearly 95% of Indian families prefer fixed income investments over more volatile equity or mutual fund options.

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    Task 4 Aditya Gupta

    Uploaded by

    ADITYA GUPTA
    34 views9 pages
    The document discusses different asset classes that Indian investors invest in, including physical assets like gold, real estate, diamonds, and financial assets like direct equity, fixed deposits, insurance, and mutual funds. It provides data on the amounts invested in each asset class from 2020 to 2018. Fixed income assets, which include fixed deposits, bonds, and postal savings, have the highest investment levels as they are considered low-risk, assure guaranteed returns, are easy to access, provide tax benefits, and are relatively liquid compared to other options. Nearly 95% of Indian families prefer fixed income investments over more volatile equity or mutual fund options.

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    Asset class

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    The document discusses different asset classes that Indian investors invest in, including physical assets like gold, real estate, diamonds, and financial assets like direct equity, fixed deposits, insurance, and mutual funds. It provides data on the amounts invested in each asset class from 2020 to 2018. Fixed income assets, which include fixed deposits, bonds, and postal savings, have the highest investment levels as they are considered low-risk, assure guaranteed returns, are easy to access, provide tax benefits, and are relatively liquid compared to other options. Nearly 95% of Indian families prefer fixed income investments over more volatile equity or mutual fund options.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    34 views9 pages

    Task 4 Aditya Gupta

    Uploaded by

    ADITYA GUPTA
    The document discusses different asset classes that Indian investors invest in, including physical assets like gold, real estate, diamonds, and financial assets like direct equity, fixed deposits, insurance, and mutual funds. It provides data on the amounts invested in each asset class from 2020 to 2018. Fixed income assets, which include fixed deposits, bonds, and postal savings, have the highest investment levels as they are considered low-risk, assure guaranteed returns, are easy to access, provide tax benefits, and are relatively liquid compared to other options. Nearly 95% of Indian families prefer fixed income investments over more volatile equity or mutual fund options.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 9

    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.

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