An Illiquid Asset is one that cannot be easily or quickly converted into cash without a substantial loss in value. Examples include real estate, unlisted private equity stakes, certain small-cap stocks with low trading volumes, art, and collectibles. In the context of mutual funds, SEBI has strict guidelines governing the proportion of illiquid assets in a portfolio to protect investor interests. Illiquid assets typically command a liquidity premium—offering higher potential returns—but investors must be prepared for longer holding periods and wider bid-ask spreads.
For android only
