An Alternative Investment Fund (AIF) is a privately pooled investment fund. AIFs are not regulated by any regulatory agency, in India. But they need to be registered under one of three categories. These categories are Category I, Category II, or Category III. Category I AIFs invest in start-ups. Category II AIFs invest in private debt or private equity. Category III AIFs invest in a range of assets. The objective of Category III AIFs is to generate alpha or superior risk-adjusted returns in the short term. Category III AIFs need to be open-ended. An open-ended fund is one where investors can exit the fund whenever they want to exit. Close-ended AIFs can get listed on stock exchanges too.
What is an Alternative Investment Fund?
An Alternative Investment Fund (AIF) is a privately pooled investment fund. AIFs are not regulated by any regulatory agency, in India. But they need to be registered under one of three categories. These categories are Category I, Category II, or Category III. Category I AIFs invest in start-ups. Category II AIFs invest in private debt or private equity. Category III AIFs invest in a range of assets. The objective of Category III AIFs is to generate alpha or superior risk-adjusted returns in the short term. Category III AIFs need to be open-ended. An open-ended fund is one where investors can exit the fund whenever they want to exit. Close-ended AIFs can get listed on stock exchanges too.
What are the benefits of AIF?
The main benefit of AIF is that it can generate higher returns. This is because AIFs invest in a range of assets, including private assets. They have more latitude regarding their investment strategies. It needs to be noted here that the risks of AIFs are also higher. So, they are suitable for high-net-worth individuals and institutional investors.
Who can invest in AIFs?
Both individual investors and institutional investors can invest in AIFs. But due to minimum investment size requirements, small or retail investors usually do not invest in them.
What is the difference between mutual funds and AIFs?
Mutual funds are regulated entities while AIFs are unregulated entities. MFs usually invest in listed equity or debt. AIFs invest both in listed and non-listed, private assets. The minimum investment size in MFs is small. The minimum investment size in AIFs is bigger. MFs usually target retail investors. AIFs usually target high-net-worth individuals (HNIs) and institutional investors.
What is the minimum investment amount in an AIF?
The minimum amount that you can invest in an AIF varies from AIF to AIF. But it is usually of a large size. For instance, hedge funds are the most prominent types of AIFs.
Gold Loan
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IIFL Finance loan against gold or jewel loan comes with the attractive, affordable and lowest interest rates to help you raise funds instantly. Our quick gold loan process is customised to offer unique, comprehensive and best gold loan features to cater to all of your capital needs. If you are looking for a simplified and ideal way to raise funds, apply for an IIFL Gold loan in India.
Personal Loan
IIFL Finance customised personal loans are designed around your capital requirements with a hassle-free application process. This quick personal loan can accomplish your plans such as marriage, vacations, home renovation and much more. With IIFL Finance’s best personal loan in India, you do not have to compromise on your bucket list!
IIFL Finance’s personal loan comes with attractive, affordable, and lowest interest rates to help you raise funds instantly. When you apply to get an instant personal loan, it is approved in less than 5 minutes without any extensive documentation. Personal loan EMIs are flexible and allow for better liquidity and easy achievement of set personal goals.
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Business loans are vital for entrepreneurs looking to kickstart or expand their businesses. IIFL Finance’s range of financial products has continually innovated to cater to businesses that seek funds. IIFL Finance’s small business loan is designed to fulfil capital requirements for small and medium enterprises. The MSME business loan is a comprehensive product that offers quick funds to help you grow your small business and invest in vital infrastructure, machinery, plants, operations, advertising, marketing etc.
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What are Fixed-Income Instruments?
As the name suggests, fixed-income instruments provide fixed income to the investor. The payout may be received at fixed, regular intervals or at the end of a specified time period. On maturity of the instrument, the principal is repaid to the investor. Examples of fixed-income instruments are bonds, debentures, fixed deposits, Public Provident Fund, Post Office deposits and so on.
Why Invest in Fixed-Income Instruments?
Fixed-income instruments have long been used by people in India to park their savings and earn returns through interest rates higher than that offered by a savings account.
The benefits offered by fixed-income instruments are:
Steady income streams:
Fixed-income instruments providing regular interest payments act as a steady stream of income for the investor.
Low risk:
Fixed-income instruments are less risky, and hence are ideal investment avenues for people with low-risk appetite.
Less volatility:
Owing to the low level of volatility associated with them, fixed-income instrument are ideal for requirements that are critical in nature or have a low time horizon.
Predictability:
Since the interest rate and structure of payments is fixed in advance, returns of fixed-income instruments are easier to predict.
Enhanced savings: Fixed-income instruments offer higher interest rate than offered in savings account, thus acting as more efficient avenues for savings.
Tax benefits: Investments in instruments such as PPF, Post Office Deposits, 5-year Fixed Deposits are exempt from tax up to a certain limit, and thus enable the investor to save tax on them.
How do I invest in Fixed-Income Instruments?
Depending on the type of instrument, you can buy them directly from the issuer, or from the capital market. Some instruments such as bonds and debentures are traded on exchange, and you can buy them through a broker. You have to approach the issuer such as banks, post-offices to invest in instruments such as fixed deposits, PPF and Post Office Deposit schemes.
ABV Enterprises, as the authorized person is representing, IIFL offering Trader Terminal, the proprietary trading terminal of IIFL offers the convenience of buying and selling fixed income instruments online from the market and can be accessed as a desktop application as well as a Web application. IIFL also offers advice on various products such as pension plans, fixed deposits and so on as a part of its advisory services.
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