Government securities are bonds issued by the government. The government issues these bonds to raise debt money from the general public. It raises this money to meet its various expenditure requirements. Often the revenues of the government are not enough to meet all its expenditure requirements.
Non-Convertible Debentures provide higher interest rates and are issued by corporations, making them an attractive choice for investors looking to diversify their portfolio with corporate debt instruments.
NCDs are unsecured debt securities. Investment in them could offer good diversification to those who also invest in equities. NCDs of investment grade issuers are also a secure form of investment.
In a stock ETF, the fund is generally composed of all the stocks in the index. This is not the case in most fixed income ETFs. The fund holds a fraction of the bonds that make up the underlying index.
Irrespective of the investment type, decision-making entails detailed market research and analysis. Investors use a combination of fundamental and technical analysis to evaluate the investment's worth. Various research reports, financials, and industry reviews assist in chalking out an investment plan.
When experienced investors choose the stock market instruments, they invest in multiple asset classes beyond equities. Although certain assets can yield higher returns, they swear by diversifying their investments within the stock market such that they are profitable in case one asset class goes through a bear cycle.