A Novel Alternative Investment To Diversify Your Portfolio
As India continues to march towards becoming an economic powerhouse, investors are increasingly looking for investment opportunities outside the traditional investment ecosystem to back their portfolio and safeguard their wealth from future financial downturns.
A niche financial instrument that is rapidly gaining traction in the Indian financial market is Alternative Investment Funds (AIFs). Additionally, with the increasing market volatility, rising interest rate, and uncertainties and lack of trust in publicly traded securities and markets, investors are finding alternative investment as a remunerative space to invest.
What Are Alternative Investment Funds?
AIFs are privately held investment funds of either domestic or foreign origin, organised in the form of an LLP, corporate body, company or trust. In simple words, unlike stocks, bonds and cash, these are investments in asset classes that don't reflect the ups and downs of the traditional market.
Different Types Of Alternative Investment Funds:
Hedge Funds - A hedge fund investment includes capital pooled from either individual or institutional investors for investing in varied assets like real estate, currencies, derivatives and other alternative assets. It is considered to be risky and aggressive.
Private Equity - A private equity investment includes owning a portion of a company that is not publicly owned or traded or quoted on a stock exchange. The investment strategies include contributing venture capital, executing leveraged buyouts, and investing growth capital.
Commodities - Investment in soft commodities from agricultural produce like wheat, sugar, corn, rice etc. or hard commodities that include energy in the form of natural gas, crude oil and metals like gold, copper, aluminium, silver etc. It depends entirely on the rise or fall of a specific commodity.
Real Assets - These are physical or tangible assets which have an intrinsic worth like precious metals, real estate, commodities, equipment, land and natural resources. The liquidity is lower for these investments and selling them is not quantifiable.
Venture Capital - Investments in venture capital is financing by investment banks, wealthy investors, and any other financial institutions given to start-up companies and small businesses having the potential to break out for long-term growth.
Fund of Funds - is investing in other hedge funds or mutual funds. The disadvantage though is the addition of annual management and performance fees.
Private Placement Debt - Private placement is a non-public offering with a funding round of securities through a private offering, mostly to a small or fixed number of chosen investors. The problem is the limited count of investors.
Apart from the above, even direct investments in start-ups and private companies, arts and antiques, precious metal, vintage coins, rare stamps, and other collectables can be categorised under AIFs.
The main advantage of Alternative Investment funds is that they tend to behave differently than non-traditional investments, adding them to a portfolio will allow you to have a broader diversification, lower volatility, reduce risk and enhance returns.
Are Alternative Investments Worth It?
Alternative investments are useful investment avenues for investors looking to diversify their portfolios at minimal risk over traditional funds. It’s an easy way to start off for first-time investors and not necessarily restricted to only ultra-high-net-worth individuals or HNIs and institutions.
Invoice Discounting: A New-age Revolution In Alternative Investments
A simple and profitable alternative investment plan with appreciable gains is Invoice Discounting or Bill Discounting.
Invoice Discounting As An Alternative Investment Option
Invoice discounting or Bill discounting is an easy and unique alternative investment of using unpaid invoices by businesses against blue-chip companies. The investment allows investors to purchase unpaid invoices and at the end of the tenure investors receive their capital amount plus the profit earned. This concept of alternative sourcing will benefit investors in:
Unique approach to portfolio diversification:
- Smart non-traditional investment strategy to diversify your portfolio
- Investor satisfaction with maximised profits
- Helps achieve long-term investment plans
Reliable Alternative Investment:
- Best investment option with Appreciable returns in a short span of time
- Valuable investment in hedging against risk and carefully calibrating market exposure
Reduce the Impact of Market Volatility:
- Mitigate the impact of extreme market swings on your portfolio
- Safe and advantageous investment option during volatile market
Enjoy a stable and secure digital process with the technology-embedded KredX platform.
How Does It Benefit You As An Investor?
- Healthy portfolio diversification
- Above-market returns
- Low-risk asset class
- Short-term investment for 30-90 days
- Above market returns in the range of ~12-20% IRR
- Risk-free with pre-vetted invoices raised against blue-chip companies
- A seamless process and reliable short-term alternative investment for changing markets
- Investment made easy with KredX Invest App
To start investing in KredX, one has to be:
- An adult citizen of India (can be an NRI too)
- Should invest a minimum of 3 lakh INR
- Should hold a valid PAN card
How It Works?
- Investor logs into the KredX account
- Investor purchases the invoices of their choice.
- Funds are disbursed to the vendor’s bank account in 24-72 hrs.
- Upon tenure completion, investor makes ~12-20% profit in 30-90 days