5 Best but Lesser Known Investment Products in India

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Introduction: Hidden Gems: Lesser-Known Investment Products in Indias

In the bustling landscape of Indian investments, there exist hidden gems – lesser-known investment products in India that promise lucrative returns, often overshadowed by more popular options. These unexplored paths offer unique opportunities for the discerning investor. In this enlightening guide, we will unveil some of these lesser-known investment products, providing a detailed exploration of their features, advantages, and disadvantages. Join us on this journey to discover the best-kept secrets of India’s financial realm.

1. Peer-to-Peer (P2P) Lending:

  • Advantages:
    • Higher interest rates than traditional savings accounts
    • Diversification by lending to multiple borrowers
    • Lower investment threshold
    • Online platforms facilitate easy transactions
    • Potential for regular income through monthly repayments
  • Disadvantages:
    • Default risk: Borrowers may fail to repay loans
    • Lack of regulatory framework
    • Limited borrower information available
    • Returns not guaranteed, subject to market demand
    • Platform fees and charges reduce net returns

2. Direct Equity Investment in Small Cap Stocks:

  • Advantages:
    • High growth potential due to emerging companies
    • Lower market capitalization offers attractive valuations
    • Potential for substantial returns over the long term
    • Opportunities to discover undervalued stocks
    • Diversification by including small caps in the portfolio
  • Disadvantages:
    • Higher volatility and market risks
    • Limited analyst coverage, requiring in-depth research
    • Liquidity challenges in some stocks
    • Vulnerability to economic downturns
    • Need for a well-diversified portfolio to mitigate risks

3. Real Estate Crowdfunding:

  • Advantages:
    • Access to real estate investments with smaller investments
    • Diversification across different properties
    • Professional management of properties
    • Potential for rental income and property appreciation
    • Low entry barriers for investors
  • Disadvantages:
    • Market risks affecting property value
    • Limited control over property management decisions
    • Potential legal and regulatory complexities
    • Liquidity challenges, especially for larger investments
    • Platform fees and charges reduce overall returns

4. Infrastructure Investment Trusts (InvITs):

  • Advantages:
    • Stable returns from income-generating infrastructure assets
    • Regular dividends to unit holders
    • Professional management by experienced fund managers
    • Tax benefits for investors
    • Potential capital appreciation over time
  • Disadvantages:
    • Interest rate sensitivity affecting unit prices
    • Market risks related to infrastructure projects
    • Dependency on the performance of underlying assets
    • Limited track record and historical data for some InvITs
    • Need for thorough due diligence before investing

5. Gold Monetization Scheme (GMS):

  • Advantages:
    • Earn interest on idle gold holdings
    • Safe storage of gold with authorized banks
    • No risk of theft or loss
    • Option to redeem in cash or gold
    • Contribution to the national economy by reducing gold imports
  • Disadvantages:
    • Fixed tenures and premature withdrawals not allowed
    • Appraisal and purity testing charges may apply
    • Interest rates subject to change
    • Limited awareness about the scheme
    • Returns may be lower compared to other investment options

Conclusion:

The world of investments is vast, offering a myriad of opportunities beyond the commonly known avenues. Exploring these lesser-known investment Products in India not only diversifies your portfolio but also unlocks the potential for substantial returns. As you venture into these hidden gems, remember that knowledge and research are your best allies. By understanding the intricacies of these unconventional options, you can make informed decisions that pave the way for a secure and prosperous financial future.