Submitted by:

Amal Joy

SWOT ANALYSIS OF ASSET CLASSES

MUTUAL FUNDS

Strength
 High rate of return possible
 You can pledge shares for loan
 Suitable for people with high risk taking ability
 Provides capital appreciation

Weakness
 Cost like brokerage and transactional related taxes will be included
 No security or guarantee of return
 High risk investment option

Opportunity
 Best investment option for higher returns in long run
 You have voting power in making certain decisions in company
 Dividends are tax free and long term capital gains

Threat
 Local and global factors affect share prices and if they are negative, the impact will be bigger
 Initial capital may get wiped out
 Volatility can impact returns
REAL ESTATE

Strength
 They are managed by professionals in the field
 Long term capital gains and dividends are tax free for the investor
 You don’t need a big amount to invest

Weakness
 Some types of funds are illiquid
 Entry load, exit load expenses and management fees to be incurred by investor

Opportunity

 different types of funds for different types of investors and their needs
 You can invest in the market with a small amount and match market performance

Threat
 Rate of return is not fixed
 MF’s don’t match the high returns of the stock market and do not offer as much security as bonds
GOLD

Strength
 Gold is a valuable asset across the world
 It is a good hedge against the equity markets
 You can invest in gold in both physical and paper format
 Investment in gold provides balance in investment portfolio

Weakness
 People in India are emotional about the gold. They don’t easily sell it thus making it illiquid.
 There is cost and security threat involved in storing physical gold

Opportunity
 As population increases the demand for gold also increases, as result value of gold also increases
 It can be used as collateral for loans
 Gold is associated with weddings and occasions. So will be demand for gold all across the world

Threat
 Price of gold fluctuates quite a bit
 Should be careful in purchasing gold because of spurious vendors who sell low quality gold.