Include equities, bonds, mutual funds, derivatives. Represent contracts to receive future income. Typically regulated and liquid.
Includes gold, real estate, collectibles. Have intrinsic value, lower liquidity, and are less regulated. Often used for diversification and inflation protection.
Equity values can increase as the company grows. Over time, capital appreciation is the main source of equity wealth.
Companies may share profits via dividends, though they are not guaranteed. High dividend stocks offer steady income + growth.
Equity holders participate in governance through voting (typically 1 vote per share), influencing key decisions and board appointments.
Over longer time horizons, equity returns tend to stabilize due to the smoothing effect of market cycles.
Preference shares offer fixed dividends and rank above equity during liquidation. Typically, they lack voting rights and behave like hybrid instruments.
These features combine debt-like stability with some equity upside potential
Some companies issue equity with DVRs offering lower or higher voting power compared to ordinary shares. DVRs may also offer enhanced dividends to compensate for reduced control.
Example: Tata Motors issued DVRs in 2008 with 1/10th voting power and 5% higher dividend. Although common globally, DVRs are still rare in India
Issued by Central or State Governments. Includes T-bills (short term) and Dated Securities or SDLs (long term). Considered risk-free or “gilt-edged”.
Issued by companies to raise capital. Higher returns due to credit risk. May be listed or unlisted. Investors must assess the creditworthiness of the issuer.
Difference between yield on corporate debt and government security of same maturity. Reflects default risk premium.
Grown goods like wheat, sugar, cotton. High volatility, sensitive to weather and seasonal demand. Low correlation with equity offers diversification benefits【245:0†NISM Series X-A-Investment Adviser Level 1 2025-2.pdf】.
Mined goods like gold, silver, oil. Gold is considered a global safe-haven. Commodities offer no income — returns come from price appreciation【245:0†NISM Series X-A-Investment Adviser Level 1 2025-2.pdf】.
Physical asset offering capital appreciation and rental income. Long-term, illiquid, high entry cost. Includes commercial & residential segments. Access via direct purchase or REITs【245:0†NISM Series X-A-Investment Adviser Level 1 2025-2.pdf】.
Customized investments using derivatives. Offers market-linked returns with various levels of downside protection. Examples: Market Linked Debentures (MLDs). Suited for HNIs with higher ticket size and risk understanding【245:0†NISM Series X-A-Investment Adviser Level 1 2025-2.pdf】.
Securities of financially distressed companies. Available at steep discounts but involve high risk. Requires expertise in valuation and restructuring. Popular with hedge funds and PMS/AIF platforms【245:2†NISM Series X-A-Investment Adviser Level 1 2025-2.pdf】.
Unique, illiquid investments. Require deep knowledge. Offer diversification and potential long-term capital gains【245:2†NISM Series X-A-Investment Adviser Level 1 2025-2.pdf】.
Invest up to $250,000 per year abroad. Enables currency and regional diversification through global ETFs, stocks, or funds【245:2†NISM Series X-A-Investment Adviser Level 1 2025-2.pdf】.
Buy stocks, bonds, gold, or property directly. Requires self-research and execution. Used by DIY investors or traders【245:2†NISM Series X-A-Investment Adviser Level 1 2025-2.pdf】.
SEBI Registered Investment Advisers provide unbiased, fee-based advice. Must be certified and follow a fiduciary code of conduct. They act in the investor’s best interest【245:2†NISM Series X-A-Investment Adviser Level 1 2025-2.pdf】.
Invest through Mutual Funds, Portfolio Managers (PMS), or AIFs. Portfolio is professionally managed based on mandate or objective.