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Mutual funds are created as baskets of investments, which invest in financial instruments like stocks and bonds according to their defined investment objectives. Investing in them allows an investor to gain access to asset classes like equities, bonds or fixed income securities, commodities, and even bullion.
These investment vehicles are created by fund companies under the aegis of an investment trust and are owned by investors who buy units or shares in them. They are pools of investment formed from the money invested by investors in exchange for units or shares. They are managed by an investment team with portfolio composition decisions being taken by a fund or portfolio manager.
The manager, with the help of research analysts, decides which instruments, stocks or bonds, go into an investment portfolio or fund, and which need to be sold off.
A Corporate fixed deposit (FD) is a term deposit that is kept for a certain amount of time at a predetermined rate of interest. Financial and non-banking financial companies (NBFCs) both provide company fixed deposits. Fixed deposits issued by companies might have maturity periods ranging from a few months to a few years.
Choose from a variety of corporate fixed deposit alternatives with varied tenures, interest rates, and institutions to meet your investment requirements. A wide selection of AAA and AA-rated Company Fixed Deposits provide solid returns with substantially lower volatility.
There are several investment options in India and bonds are one of them. Bonds are said to be a debt instrument in which the issuer company borrows money from the lender (bond holder) and, in return, is obliged to pay interest on the principle amount. The interest is called the coupon. The holder enters a formal contract where the issuer decides to repay borrowed money along with interest at fixed intervals, such as on a semi-annual, annual or monthly basis.
Both bonds and stocks are capital market securities; however, the difference is that stockholders have an equity stake in the company, while the bondholder has a creditor stake in the company.
It means that stockholders enjoy the status of owners and bondholders are lenders for the company. Also, bonds usually have a pre-determined interest rate and defined period or maturity, after which these are matured. Stocks, on the other hand, remain outstanding indefinitely.
Non-convertible debentures (NCD) are fixed-income instruments, usually issued by high-rated companies in the form of a public issue to accumulate long-term capital appreciation.
They offer relatively higher interest rates when compared to convertible debentures.Non-convertible debentures fall under the debt category.
They cannot be converted into equity or stocks. NCDs have a fixed maturity date and the interest can be paid along with the principal amount either monthly, quarterly, or annually depending on the fixed tenure specified. They benefit investors with their supreme returns, liquidity, low risk and tax benefits when compared to that of convertible debentures.
Portfolio Management Services account is an investment portfolio in Stocks, Debt, and fixed income products managed by a professional money manager, that can potentially be tailored to meet specific investment objectives. When you invest in PMS, you own individual securities unlike a mutual fund investor, who owns units of the entire fund.
You have the freedom and flexibility to tailor your portfolio to address personal preferences and financial goals.
