5 Different Investment Products in 2023

Are you looking to invest other than Mutual fund ?

If you are interested in new investment options in india with better returns then this article is for you.

Just like different cuisines which will satisfy your appetite, as an investor there are different investment options which will satisfy your investment needs based on investment goals.

Journey of Investment Products in India :

In the investment domain each of investment option will be termed as a product. These are nothing but alternative options available to an investor other than conventional fixed deposits.

The ultimate aim of investing in different investment options is to diversify and generate better returns. 

We only had banks providing fixed deposit returns and slowly we had LIC offering Insurance with returns close to that of banks. Household expenses were costing less till 2000’s since there was not much inflation, the returns from the insurance policies was more than enough considering the interest rates were in double digits.

Globalization was an important factor and income of people started increasing.  Seeing the economy of  the country growing, investment companies from across the world started setting up offices in India. This supported the Mutual fund industry since 1990’s. But the adoption of Mutual fund as an investment option took time because of lack of awareness in early days. Only with the advent of internet and mobile apps, it has increased drastically in the last 10 years. 

Also in the recent decade we have seen new investment products other than mutual funds which was invented by identifying the problem and providing a solution.

Below are some of the new investment options in India which are available to you as an investor,

1)    P2P lending platforms 

2)    Fractional commercial real estate investments 

3)    Structural Products 

4)    Unlisted Shares

5)    AIF

People look to invest in new investment options when there is less risk and more transparency. Also there should be surplus income which will naturally create an avenue to invest.

P2P Lending platforms :

Peer to Peer lending platforms are called as P2P lending platforms. Though this model is in India since 2013, regulations came only in 2018. RBI has approved it as Non Banking financial company or NBFC. 

Faircent, LiquiLoans, Monexo, India P2P etc are some of the peer to peer lending platforms available in India. They offer liquid plans and fixed term plans for the investor. Returns may vary from 8% to 13% and even higher depending on the platform. 

They onboard investors and borrowers separately. Based on the credit score, borrowers get different interest rate to pay. 

Invest part of your money in these platforms. 

Fractional Commercial Real Estate Investments – 

Better rental income and becoming a part owner in a commercial property is the main advantage of this investment.

Conventional Investing in a commercial real estate requires huge money and lots of documents to be verified. Also getting regulatory approvals along with charges to be paid will be huge. This fractional commercial property product makes everything simple as there is an aggregator who does all documentation and as an investor you get to invest a portion in it. 

MyreCapital, Strata, Gayn Capital etc are some of the companies in this Fractional commercial real estate investment. Investment starts from 5 lakhs and some are offering even lower than this. 

You will get capital appreciation along with yearly rental appreciation. This makes this investment product attractive as there is an underlying asset associated with this investment.

Structural Products :

Structural products are separate investment products which can be fixed income producing or equities. 

Investments may start from 1 lakh and in multiples there of. Fixed income product has a fixed tenor and fixed interest will be paid to the investor. 

Equity products invest a portion in Futures and remaining in fixed income product, hence some of them were able to provide capital protection along with lesser returns. Few products can provide 100% upside if the market exceeds as planned. Time period may vary from 3 to 5 years. 

Edelweiss, Abans investment etc and other investment companies have these structural product.

Unlisted Shares :

Before getting listed in stock exchange itself you can invest in companies and they are widely available for investing through brokers. This model of investing is called as Unlisted shares.

There may not be complete transparency of all documents available from the companies.

From being an unlisted company and at time of listing, there may be huge price movement as this activity happens only when there is bull market. Hence you should be careful when you are investing in unlisted shares and for how long. 

Alternate Investment Fund :

There are 3 different categories of AIFs available to invest and each has specific requirements which needs to be satisfied. 

Minimum investment needed in this AIF is 1 crore and hence this product is not for everyone. 

Category 1 : Invest in new business where it can grow financially such as startups, small and medium enterprises. Some funds in this category is,

Infrastructure funds

Angel funds 

Social venture funds 

Venture capital funds 

Category 2 AIF : Funds that invest in debt and equity securities are classified as Category 2 AIFs. Some funds in this category is,

Fund of Funds 

Debt funds 

Private equity funds 

Category 3 AIF : Funds are invested for shorter period of time and they use complex & diverse strategies to generate returns. Some funds in this category are,

Hedge Funds

Private investment in public equity funds

Checklist before investing in these Investment options in India :

1) Investment company should be registered with concerned regulatory authority like SEBI or RERA

2) Investment product should be a regulated one

3) Returns and the investment process should be simple to understand and transparent 

4) Risk should be mentioned in detail and it should be directly proportional to the returns 

5) Exit strategies should be mentioned in detail 

Product Time Period Min Investment Returns
P2P lending Platforms Liquid to 3 Years 50,000 & more 8% & more
Fractional commercial Real estate investments 3-5 years 5 Lakhs & more 9% – 13%
Structural Products 3+ Years 1 Lakh & More 9% & more
Unlisted shares 3-5 years Few thousands Market condition
AIF 7 Years 1 crore 15%*  & more

Frequently Asked Questions ?

1) What is Peer to Peer lending Investing ?

You will be onboarded as lender/Investor and there will be a borrower who will be in need of money. These Peer to Peer lending platform makes this entire transaction by online. Borrowers who is in need of small amount of money for lesser period can get it here at higher interest rate and that is beneficial for the lender.

2) What Is Fractional Commercial real estate investing ?

Pool of investors join together in buying a commercial property as a shareholder which will be managed by an investment company. Investors get rental income and capital value appreciation every few years based on market condition.

3) Are structural products legal ?

Yes, structural products are legal and all the investment broker companies need to inform SEBI and keep them updated about their products. They are primarily derivative products and completely driven by stock market.

This podcast is hosted by Ganesan Thiru. I provide solutions for Investing in Mutual Funds, Stocks, Fixed Instruments, NCDs, Commercial Real Estate etc.,

Contact: 9444893050

I provide investments, insurance and loans.

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