Give an Edge to Your Portfolio with Unique Financial Products

The financial landscape in India has witnessed a remarkable evolution over the last decade, introducing a wave of innovative financial products. These emerging instruments provide investors with new ways to diversify their portfolios, manage risk, and seek higher returns. While traditional investments like fixed deposits, mutual funds, and equities continue to form the foundation of most portfolios, incorporating newer options can give your wealth strategy a powerful edge.

Below is a curated list of new-age financial products, along with their features, advantages, limitations, and tax implications (as per FY 2024–25 guidelines).

🔹 1. Real Estate Investment Trusts (REITs)

What Are They?

REITs allow investors to participate in income-generating real estate without owning physical property. Traded like stocks, they offer a liquid route into commercial real estate.

Pros:

• Exposure to real estate without ownership hassles

• Regular income via dividends

• High liquidity

Cons:

• Market-linked returns

• Fewer options in India vs global peers

📊 Tax Implications:

• Dividends: Taxed as per income slab (unless exempted)

• STCG (<36 months): 15%

• LTCG (>36 months): 10% on gains above ₹1 lakh

  
  

🔹 2. Infrastructure Investment Trusts (INVITs)

What Are They?

Similar to REITs but focused on infrastructure assets like toll roads, energy projects, and telecom towers.

Pros:

• Exposure to core infrastructure

• Dividend or interest income

• Lower risk vs direct infra investments

Cons:

• Policy and regulatory sensitivity

• Moderate growth prospects

📊 Tax Implications:

• Dividends: Taxed or exempt depending on AMC declaration

• STCG: 15%

• LTCG: 10% on gains above ₹1 lakh

  
  

🔹 3. Structured Products

What Are They?

Tailored investment solutions combining equities, bonds, and derivatives to match specific risk-return profiles — often used by HNIs.

Pros:

• Customizable to goals

• Can offer downside protection

• Enhances portfolio diversity

Cons:

• Complex structure

• High fees

• Limited liquidity

📊 Tax Implications:

• Interest Returns: Taxed as per slab

• STCG (<36 months): Slab rate

• LTCG (>36 months): 20% with indexation

  
  

🔹 4. Exchange-Traded Funds (ETFs)

What Are They?

ETFs track indices, sectors, or commodities and trade like stocks, offering a passive and cost-effective way to invest.

Pros:

• Low expense ratio

• Instant diversification

• Easy to buy/sell

  
  

Cons:

• Market return capped

• Underperforms active funds in rallies

  
  

📊 Tax Implications:

• Equity ETFs:

  • STCG (<12 months): 15%

  • LTCG (>12 months): 10% above ₹1 lakh

• Debt ETFs:

  • STCG (<36 months): Slab rate

  • LTCG (>36 months): 20% with indexation

    
    

🔹 5. Green Bonds

What Are They?

Debt instruments used to fund environmentally friendly projects — ideal for socially conscious investors.

Pros:

• Supports sustainability

• Low credit risk

• Tax benefits in some cases

Cons:

• Limited Indian supply

• Modest returns

📊 Tax Implications:

• Interest Income: Taxed as per slab

• STCG (<36 months): Slab rate

• LTCG (>36 months): 20% with indexation

  
  

🔹 6. International Mutual Funds & ETFs

What Are They?

These funds invest in global companies, providing access to markets like the US, Europe, and Asia.

Pros:

• Global diversification

• Access to tech giants like Apple & Tesla

• Currency hedge

Cons:

• Higher costs

• Forex volatility

• Less awareness among Indian investors

📊 Tax Implications:

• Dividends: Taxed as per slab

• STCG (<36 months): Slab rate

• LTCG (>36 months): 20% with indexation

  
  

🔹 7. Perpetual Bonds

What Are They?

Bonds with no maturity date that offer fixed interest payments indefinitely.

Pros:

• High yields

• Ideal for regular income seekers

Cons:

• Issuers can defer interest

• Low liquidity

📊 Tax Implications:

• Interest Income: Taxed as per slab

• STCG: Slab rate

• LTCG (>36 months): 20% with indexation

  
  

🔹 8. Crypto Assets & Blockchain Funds

What Are They?

Cryptocurrencies like Bitcoin and Ethereum, or funds investing in blockchain tech.

Pros:

• Potential for exponential returns

• Portfolio diversification

• Exposure to future tech trends

Cons:

• Extreme volatility

• No SEBI regulation yet

• Hard to value

📊 Tax Implications:

• Capital Gains: Flat 30% (regardless of holding period)

• TDS: 1% on trades above ₹10,000

• No deductions allowed (except cost of acquisition)

Final Thoughts

New-age financial products offer powerful tools to diversify and grow your wealth — but they require proper understanding and risk assessment. By blending traditional and modern instruments, you can build a resilient portfolio that’s aligned with your long-term financial vision.

We advise getting in touch with your financial consultants who are equipped to guide you through these products and can help you integrate them smartly in your portfolio based on your profile and requirements.