• Login/Sign Up
  • ?>
    Invest Now
    ×

    Want High Returns, Invest Now

    Investment Starts From 5 Lakhs

      Image
      Invest In Fixed Income Products

      Make portfolio diversification your financial goal in 2024 and invest in non-volatile alternative real estate products

      Highly Safe

      Secured

      High Returns

      High Returns

      Invest for short-term

      Short Term

      Alternative Investment to Mutual Funds

      • 5 min read
      • Last Modified Date: July 15, 2024
      Listen to the article
      facebook twitter linkdin whatsapp

      Alternative to Mutual Funds

      • Traditional investment vehicles like mutual funds have long been favourites among investors. 
      • However, a growing interest in alternative investment options has been noted recently. 
      • These alternatives include hedge funds, private equity, commodities, real estate, venture capital, private debt placement, peer-to-peer lending, startups, art, antiques, vintage coins, stamps, and inventory financing.
      • These investment avenues are particularly popular with High-Net-Worth Individuals (HNIs), family offices, and some wealthy retirees seeking to generate passive and recurring income streams.
      • Notably, these alternative products offer attractive returns in the 11-13% range, presenting a compelling option compared to traditional debt instruments, which typically yield 5-7%. 
      • Moreover, since most alternative investments are not correlated with the traditional stock or bond markets, they provide an excellent opportunity for portfolio diversification beyond market-linked assets.
      • Here are several alternative investments to mutual funds to consider, ranging from more traditional assets to those that are a bit more complex or unconventional:

      P2P Lending

      The concept of P2P lending is quite similar to how banks operate. In conventional banking, the bank profits from the margin between the interest rates charged to borrowers and those paid to depositors. Additionally, banks impose numerous rules concerning eligibility, borrowing limits, and interest rates.

      However, modern P2P lending platforms have disrupted this model by removing banks from the equation. As a result, lenders or investors can earn higher interest on their funds, while borrowers can access loans with tailored approval processes.

      Lenders have the flexibility to choose borrowers based on preferred profiles, loan purposes, durations, and desired interest rates, which typically range from 12% to 35%.

      However, it’s important to recognise that lending is inherently risky and that there is always the potential for borrower default.

      Fractional Ownership

      Historically, real estate investment has been a high-capital venture, with entry points ranging from several lakhs to crores of rupees. 

      However, platforms such as Assetmonk have now democratised access to commercial real estate, allowing retail investors to hold shares in such properties in smaller, more manageable amounts.

      This innovative approach involves the fractional ownership platform scouting for a high-quality (Grade A) commercial property, often with long-term tenants already in place, which provides clear cash flow prospects.

      Given the high cost associated with these properties, running into crores, these platforms offer investors the opportunity to collectively fund the asset’s purchase.

      From an investor’s standpoint, this approach means earning a stable monthly rental income, which includes provisions for rent increase, alongside the advantage of capital appreciation over time.

      Thus, fractional ownership platforms claim to deliver rental yields of 8-9%, outperforming the traditional real estate yields of 2-6%. 

      With property appreciation added, these alternative investments to mutual funds aim for a pre-tax average annual return of 12-15% over a five-year span.

      High Yielding Fixed Income Investments

      Over the past two years, fixed deposit (FD) returns have been struggling to keep pace with inflation rates. However, this trend is beginning to shift. A surge of start-ups has emerged, presenting bonds, structured debt, and other high-yielding fixed-income options to retail investors.

      These offerings aim to challenge the traditional FD market, valued at approximately 1.5 trillion dollars, by providing debt instruments that offer attractive returns. Additionally, these platforms allow investments starting from as little as Rs 10,000.

      Private Equity

      Private equity represents a type of alternative investment fund that accumulates capital to invest in private companies not listed on the stock market. These unlisted companies, often needing substantial funds, opt to raise money through private equity instead of issuing debt instruments. 

      Private equity investments cover various sectors, including startups, real estate, and venture capital.

      Both institutional and individual investors interested in adding high-risk assets to their portfolios can participate in private equity. These investments offer potential for capital appreciation and returns based on the performance of the assets, while the managing firm usually charges a management fee. 

      Private equity investments are typically long-term, spanning 3-7 years, after which investors may choose to exit the fund.

      Assetmonk is an example of a private equity platform that facilitates investments in real estate properties with high growth potential.

      Bottom Line

      The alternative investments mentioned previously are presented as options offering higher returns than mutual funds. Additionally, these investments can be viewed as a means of diversification, having minimal correlation with conventional asset classes such as stocks, bonds, and mutual funds.

      Assetmonk is a pioneer in alternative real estate investment, and we understand the immense potential in the Indian commercial real estate industry. We make alternative assets, such as real estate, more accessible. We have customised investment options to suit individual financial goals like passive income capital appreciation and portfolio diversification. 

      Our expertise is identifying opportunities with high yields within the retail, office, and industrial asset classes. This enables our investors to maximise profits while diversifying their portfolios. 

      We offer various alternative investment options, such as fractional or joint ownership of high-end commercial properties, sub-leasing ventures, etc. Trophy locations with the potential for high Internal Rates of Return (IRR) are prioritised, and due diligence is done to ensure these provide profitable returns for our investors. 

      Assetmonk Investment
      HOW CAN YOU MANAGE YOUR WEALTH
      WITHOUT THE RIGHT FINANCIAL INFORMATION?
      Sign up for smart insights from industry experts!
      mail-logo
      whatsapp_logo
      Invest Now