0701119 Portfolio Managemnet Services

8/12/2019 0701119 Portfolio Managemnet Services

1/79

A Project Report

On

PORTFOLIO MANAGEMNET SERVICES

For

SHAREKHAN LIMITED.

B

VIJETA B RATHOD

!n"er t#e $%&"'nce o(

MRS. SMITA SOVANI

S%)*&tte" to

!n&+er,&t o( P%ne

In p'rt&'- (%-(&--*ent o( t#e re%&re*ent (or t#e '/'r" o( t#e "e$ree o(

M',ter o( B%,&ne,, A"*&n&,tr't&on 0MBA1

T#ro%$#

V&,#/'2'r*' In,t&t%te o( M'n'$e*ent

P%ne345.

1


2/79

ACKNO6LEDGEME NT

I take immense pleasure in completing this project and submitting the final

project report. A successful project can never be prepared by the singular effort of the

person to whom project is assigned but, it also demand the help and guardianship of

some conversant person who undersigned actively or passively in the completion of a

successful project.

I would like to express my sincere thanks to my Director, Pro(. S#'r'" L

7o,#&for giving me the opportunity to be a part of an esteemed institution and without

whose support this project would not have been possible.

he last two months with SHAREKHAN SEC!RITIES LTDhas been full

of learning and sense of contribution toward the organi!ation. I would like to thank

SHAREKHAN SEC!RITIES LTD.giving me this opportunity for learning and

contributing. I take this opportunity to thank all those people who made this

experience a memorable one.

In this context, as a student of "I#$%A&A'(A I)#I*+ -

(A)A+(+), /*)+ would first of all like to express my thank fullness to Mr.

PRANA8 SONCHHATRA, for assigning me such a worthwhile title

0PORTFOLIO MANAGEMENT1

During the actual project work, Mr,. SMITA SOVANI 0PRO7ECT G!IDE1

has been a source of inspiration through her constant guidance, personal interest,

encouragement and help. I convey my sincere thanks to her. In spite of her busy

schedule she always found time to guide me through the project.

0


3/79

INDE9

Sr. No. Top&c P'$e No.

:1 E;ec%t&+e S%**'r 4


4/79

CHAPTER :

E9EC!TIVE S!MMAR8

3


5/79

E9EC!TIVE S!MMAR8

he project at #$A'+&$A) 4D. i.e. 5/ortfolio (anagement #ervices6 helps the

individual investors in constructing a portfolio from the funds they want to put in the

various securities or financial instruments that are available in the market.

T#&, project &, "&+&"e" &nto t#ree p#',e,

he (&r,t p'rtemphasi!es on the entire methodology of my study the parameters kept

in the mind while designing of the report, various sources of data collection. Also

company7s detail, objective of project etc in detail is done.

hen ,econ" p'rtemphasi!es on an introduction to investments need for financial

planning what is a 5/ortfolio (anagement #ervice6. he objective of portfolio is to

diversify risk, the various investment avenues and product offered in /(# along with

its objective and advantages. he report emphasi!es on portfolio management 8 the

types of portfolio and various activities of portfolio management.

9


6/79

hen in the t#&r" p'rt there is an example of virtual designed portfolio. It also

consists of my learning7s from the project and few suggestions for the organi!ation

which I feel will be useful for them in improving their services even further. his

phase of the project talks about the final :'*; of the report under the name of

conclusion, it talks all about the findings and my beautiful experience with

5#$A'+&$A) 4I(I+D6.


7/79

CHAPTER uilding awareness amongst general public about stock market

#$A'+&$A) 4imited is a retail financial services provider with a focus on

+Guities, Derivatives and :ommodities, >rokerage execution on the )ational #tock

+xchange of India 4td. )#+E, >ombay #tock +xchange 4td. >#+E, )ational

:ommodity and Derivatives +xchange India ):D+;E and (ulti:ommodity

+xchange of India 4td. (:;E.

#$A'+&$A) provides trade execution services through multiple channels an

Internet platform, elephone and 'etail utlets and is present in 009 cities through a

network of roking >rand by Awwa! :onsumer "ote.

#$A'+&$A) covers the entire spectrum of financial services such as #tock

broking, Depository /articipants, Distribution of financial products like (utual

-unds, >onds, -ixed Deposit, (erchant >anking and :orporate -inance, Insurance

>roking, :ommodities >roking, /ersonal -inance Advisory #ervices, /lacement of

+Guity, I/7s, among others

11


12/79

A Sharekhan outlet offers the following services:

nline >#+ and )#+ executions through >4 8 )+A terminalsE.

-ree access to investment advice from #harekhanHs 'esearch team.

#harekhan "alue 4ine a monthly publication with reviews of

recommendations, stocks to watch out for etcE.

Daily research reports and market review $igh )oon 8 +agle +yeE.

/remarket 'eport (orning :uppaE.

Daily trading calls based on echnical Analysis.

:ool trading products Daring Derivatives and (arket #trategyE.

/ersonali!ed Advice.

4ive (arket Information.

Depository #ervicesB Demat 8 'emat ransactions.

Derivatives rading -utures and ptionsE.

:ommodities rading.

I/7s 8 (utual -unds Distribution.

Internetbased nline radingB #peed rade.

10


13/79

hey try to give new facilities thorough their researches to their clients like,

S#'re *o)&-e where clients can buy or sell shares through their mobile phone. It

provides facility to their clients to buy or sell of shares through them. It provides

research calls to their clients so that clients can easily think of investment. (ainly

there are five departments in the company, one is DP "ep'rt*ent, we can say it heart

of the company because it is also F&n'nce Dep'rt*ent, all the clerical work are

done there. #econd one is O((3-&ne tr'"er, roo*, where the transaction has been

executed via phone calls or directly through clients. hen there is On3-&ne tr'"&n$

roo*where transaction executed totally online through 5internet6. hen there is one

department of M%t%'- F%n"where they take care of (utual -und clients. hen there

is one S'-e,M'r2et&n$ Dep'rt*entwhich is situated nearby >ranch ffice. he

>ranch (anager of the company is Mr. %)&n B#'tpor&' he is taken care all the

activities done within the company. otal there is 2? to 3? employees working under

one roof.

12


14/79

13


15/79

VARIO!S ACTIVITIES !NDERTAKEN B8

SHAREKHAN STOCK BROKING LTD

DEMAT SERVICE

Demateriali!ation and trading in the demat mode is the safer and faster alternative

to the physical existence of securities. Demat as a parallel solution offers freedom

from delays, thefts, forgeries, settlement risks and paper work. his system works

through depository participants D/sE who offer demat services and the securities are

held in the electronic form for the investor directly by the Depository.

#harekhan Depository #ervices offers demateriali!ation services to individual and

corporate investors. hey have a team of professionals and the latest technological

expertise dedicated exclusively to our demat department, apart from a national

network of franchisee, making services Guick, convenient and efficient.

At #harekhan, their commitment is to provide a complete demat solution which is

simple, safe and secure.

$ere mainly two types of services provided by the company to the customer for

Demat A: that is 1E nline A: and 0E ffline A:.

19


16/79

1. On-&ne Acco%nt )owadays online A: is more popular than offline A:. In

online A: what company will do, they simply provide terminal to the

customer and customer can do trading himselfherself when heshe wants. he

online A: will charge =9? 's. (*It varies from company to company). In

these there 2 types of facility company will provide to the customer as per the

company7s reGuirement.

aE C-',,&c Acco%nt his is the simplest way to do trading. $ere what

customer has to do is that first he has to open an Demat A: with the

#harekhan, after the A: has been opened the customer will get login

ID and /assword and with the help of these he can login to the

#harekhan.com and in :lassic Ac which company7s data he wants, he

has to type that company7s name or code and he will get all the

necessary information regarding the company and he can buy or sell

that company7s stock.

bE F',t Tr'"e Acco%nt In this the whole terminal will provided to the

customer and the customer can buy or sell the shares by himself by

watching the live position of the company in the terminal. he initial

procedure will be same here, but after login in to #harekhan.com the

customer has to login into -ast trade and he will get the whole terminal

from where he can buy or sell the shares of the company by himself

only. In this the customer can see 09 scripts at a time and place the

order from wherever he wants. here is no limitation for brokerage that

has to be generated.

1


17/79

cE Spee" Tr'"e Acco%nt his is also same as -ast trade but the only

difference is that in -ast trade the customer will get only 09 scripts at a

time whereas in #peed rade the customer will get full screen view and

more than 09 scripts at a time. his A: also provides charts and

graphs so that one can easily understand about the stocks. his is

provided mostly to those persons who are dealer kind of customer or

the big clients. $ere the minimum brokerage that has to be generated is

's. 9?? per month.

0. O((-&ne Acco%nt his is the traditional way of buying or selling shares. In

this, customer can place the order via telephone or directly by sitting in the

company. he customers who are busy in their jobs or businesses, they can

place the order via telephone and the customers who are not that much of

busy, they can come to the office #harekhanE and by sitting there whole day

they can place the order.

DAIL AND TRADE

Tr'"e in Equity by using your phone! -ree with #harekhan :lassic Account, the Dialnrade service enables

customer to place orders for buying and selling shares through telephone.

1=


18/79


19/79

ADVISOR8 SERVICES

*nder their real brand #$A'+&$A) 4I(I+D7 they deliver advisory

services to a crosssection of customers. he service is backed by a team of dedicated

and expert professionals with varied experience and background in handling

investment portfolios. hey are continually engaged in designing the right investment

portfolio for each customer according to individual needs and budget considerations

with a comprehensive support system that focuses on trading customers portfolios

providing valuable inputs, monitoring and managing the potfolio through varied

technological intiatives. hose is made possible by the expertise they have gained in

the business over the years.

COMMODITIES

At #$A'+&$A) :ommodities, they are focused on taking commodities

trading to new dimensions of reliability and profitability. hey have made

commodities trading, an essentially ageold practice, into a sophisticated and

scientific investment option. :ompany enables trade in all goods and products of

agriculture and mineral origin that include lucrative commodities like gold and silver

and popular items like oil, pulses and cotton through a wellsystemati!ed trading

platform. he technological and infrastructural strengths and especially the street

smart skills make them an ideal broker. heir service matrix is holistic with a gamut

of advantages, the first and foremost being their legacy of human resources,

technology and infrastructure that comes from being part of the #$A'+&$A)

roup.

1


20/79

heir wide national network, spanning the length and breadth of India, further

supports these advantages. 'egular trading workshops and seminars are conducted to

hone trading strategies to perfection. +very move made is a calculated one, based on

reliable research that is converted into valuable information through daily, weekly and

monthly newsletters

M!T!AL F!NDS

#harekhan have announced that customers will now be able to invest in

(utual -unds through #harekhan. hey have started this service for a few mutual

funds, and in the near future will be expanding their scope to include a whole lot

more. Applying for a mutual fund through sharekhan is open to everybody, regardless

of whether you are a #harekhan customer or not.

-or investing in mutual funds through sharekhan you have to just download

the form from internet, fillit and submit it in any sharekhan office.

Co*petetor, o( S#'re2#'n

Indiabulls

&arvy consultant

I:I:I Direct

India Infoline

'elience money

0?


21/79

I48-# Investsmart.

01


22/79

CHAPTER >

OB7ECTIVE OF

PRO7ECT

00


23/79

OB7ECTIVE OF PRO7ECT

he main objective of this project is to know the Awareness of -inancial

Instrument among investors and also to know the investing pattern of people in

different -inancial /roject. he project with SHAREKHAN SEC!RITIES LTDhas

been full of learning and sense of contribution towards the organi!ation.

(y project on 5Port(o-&o M'n'$e*ent Ser+&ce,6 is meant to study the nature

of different investment instruments available in the market and then finally suggest

the same to the clients in the form of a structured product. I do this by suggesting the

investor as to go for which all investments that can fetch out real good returns to them

in future, as per their risk appetite regarding the investments and their needs. I suggest

them the investments that they can opt for and the one7s which can bring a huge value

addition to their portfolio.

According to the study of the markets, it is being observed that there are lots

of financial instruments are available in the markets and some of them are really

doing well. In near future a proper financial planning is reGuired to invest money in

all type of financial product because there is good potential in market to invest.

In this project the great emphasis is given to the investor7s mind in respect to

investment where he can maximi!e his wealth. he needs and wants of the client are

taken into consideration.

(ore emphasis has been given for the study of the project because it is the

only field where all type of Age group, Income class and different level of people are

represented and accordingly their approach towards the market.

02


24/79

CHAPTER 4

RESEARCH

METHODOLOG8

03


25/79

METHODOLOG8 OF ST!D8

'esearch can be defined as a systemi!ed effort to gain new knowledge. A

research is carried out by different methodologies which have their own pros and

cons. 'esearch methodology is a way to solve research in study and solving research

problems along with logic behind them are defined through research methodology.

hus while talking about research methodologies we are not only talking of research

methods but also consider the logic behind the methods. %e are in context of our

research studies and explain why it is being used a particular method or techniGue and

why the others are not used. #o that research result is capable of being evaluated

either by researcher himself or by others.

RESEARCH METHODOLOG8

'esearch has its special significance in solving various operational and

planning problems of business and industry. 'esearch methodology is a way to

systematically analy!e the research problem.

I have executed the project after prior discussion with our guide and structured in the

following stepsB

a. /reparation of a Guestionnaire

b. he focal point of the designing the Guestionnaire was to comprehend the

current investment scenario with respect to tax planning part.

09


26/79

c. his Guestionnaire was primarily aimed to respondents who belong to the

service and business class people

he Guestionnaires were discussed through personal interface with the

respondents.

ASS!MPTIONS

1. It has been assumed that sample of hundred represents the whole population.

0. he information given by the customer is unbiased.

De+e-op*ent o( 6or2&n$ Hpot#e,&,

he hypothesis could be developed by discussing with the consulting

department heads and guides about this exploratory research and reach to the

conclusion that the data is to be collected by personal interaction with the clients,

asking them about their investment planning and their need for financial advisory

service from #harekhan#ecurities 4td.

-irst of all are they aware of tax and investment planning or not and then

analy!ing the findings to reach to the objectives of research.

So%rce, o( D't'

PRIMAR8 DATA

his research is solely based on primary research done by means of

Guestionnaires targeted to respondents who primarily belong to the business and

service sector.

0


27/79

It is very essential in the research process to know the accuracy of the finding7s which

depends on how systematically the study has been carried out so that it can make

sense.

he data reGuired for the project was about the customers and therefore this data was

a confidential for the company.

SECONDAR8 DATA

#econdary data is a data that has been collected earlier for some purpose other than

the purpose of the present study. I have collected data by referring book and websites

for carrying out my project from .

Also, secondary data can be a useful benchmark against which the findings of

the study can be tested. his study is highly dependent on the secondary data for

various facts and figures.

0=


28/79

CHAPTER @

INTROD!CTION TO

INVESTMENTS

0C


29/79

INTROD!CTION

INVESTMENTS

6H8 &n+e,t%e work hard so that we can live life to its fullest. (ost of us

spend more than half of our lives working and saving because money is essential. In

fact, to most of us it is the driving force of our life. he reasons why we invest are

primarily for taxsaving purposes. Although, this may not be incorrect, it is true that

one needs to analy!e various factors before putting the hardearned money into any

type of investment. A proper planning is crucial to make your how to invest money

work effectively at later stages of your life.

I"ent&( o%r $o'-, ur goals in life may be plenty owing a house,

providing the best education to children, supporting family with the best amenities,

holidaying, etcE. And of course, last but not the least is to save how to invest for those

retirement days. /rioriti!e your goals. (ake a note of when you would like to achieve

them. %e learn about a few smart ideas on how to increase your net worth and not

affect your needs too.

Ho/ to &n+e,t 'n" /#ere he right time to learnhow to invest iswhen you

have identified at what stage in life you would reGuire how much funds. It is human

tendency to be affected by greed and fear. reed makes us invest without thinking

twice. ne may land being a loser when the desire to get more for less creeps in.

%hen fear strikes, one dreads to even take normal investment risks. Due to this, one

may lose on opportunities while investing in the market.

0


30/79

H'n"-&n$ r&,2 &now what is your risk appetite. All investments carry some

risk. 'isk and return are two sides of the same coin. Investments with the potential for

the biggest returns are associated with the highest risk of losing moneyE.

Re*e*)er your age, family situation, income and goals can all influence the

amount of risk you wish to take. In general, the younger you are you have more time

to recover from any loses if at all. he older you are or the closer to needing the

money, the more conservative you may become and be reluctant to take risks. nce

you know your goals and your comfort with risk, you can decide what type of

portfolio is right for you. A portfolio is simply a collection of different kind of

investmentsE.

-or example, if you are young, aggressive and have plenty of time before you plan to

use money from your investments, you might allocate =? to 1?? percent of your

portfolio to stocks and stock mutual funds. If youHre more conservative, you might

allocate 9? percent to stock mutual funds, 3? percent to bond funds and the rest to

cash eGuivalents.

6#en to ,t'rt In+e,t&n$ he sooner one starts investing the better. >y

investing early investor allow his investments more time to grow, whereby the

concept of compounding increases income, by accumulating the principal and the

interest or dividend earned on it, year after year.

T#e t#ree $o-"en r%-e, (or '-- &n+e,tor, 're

o KInvest e'r-

o KInvestre$%-'r-,

o KInvest for -on$ ter*and not short term.

2?


31/79

6# F&n'nc&'- P-'nn&n$ &, nee"e"

his can be explained by very simple example. Assume a person is 3? years

old and will reGuire =?L of his current annual income for each of the 19 years expect

to live after his retirement. $e wants to retain his purchasing ability after certain age.

In t#&, c',e #e /&-- #'+e to p-'n #&, (&n'nce 'n" #ence t#e ter*, port(o-&o

'n" port(o-&o *'n'$e*ent co*e &n p&ct%re

Investors should periodically review their asset allocation across different

assets as the portfolio can get skewed over a period of time. his can be largely due to

appreciationdepreciation in the value of the investments.

For e;'*p-eB an investor who had invested 's. =? into eGuities and balance in

income funds in Mune 0??3. During last one year, the >#+ #ensex has moved up by

31L while the income funds have grown by 1L. As of end (ay ?9, the eGuity asset

allocation would be


32/79

In+e,t*ent G%&"e-&ne,

Investment in general is defined as use of money with an intention of making

more money or profit. he use of money could be in many ways like purchase of

property, purchase of vehicles, investing in financial assets like mutual funds,

government securities and so on. he ultimate aim of all investments would be to earn

a sum as profit which is called as the return on investment

he idea of investing in various options is a result of demand, where in one

person would be in need for money and the other person who has sufficient money is

interested in making some profits out of the same. It is interesting to know that how

these two people with a matching demand and supply meet. And the process is being

made easier now a days with various investing in India consultants booming down

very lane and all major banks competing with one another to give investment advice

to their customers

oing further into the investinginIndia options available the points that any

individual would be looking at the return on investment, the time period involved and

the authenticity of the return. >y rate of return we would mean the percentage of

profit that we would be getting on the amount invested.

20


33/79

A ,&*p-e e;'*p-e (or t#&,N

4et7s assume ; invests 's.1?? in a >ank Deposit for 2


34/79

Bene(&t (ro* co*po%n"&n$3 :ompounding is when an investment gives you

returns on the money you originally invested as well as on the returns you have

gained so far from that investment. -or example, imagine you invest F1,??? into an

investment that gives you a 9 percent rate of return each year. Oear on year, you

would get a 9 percent return on both your original F1,??? and on the other returns

youHve earned so far. +laborating on this, lets review the following

In one year, you would have F1,?9? F1,??? plus 9 percent, or F9?E.

In two years, you would have F1,1?0.9? F1,?9? plus 9 percent, or F90.9?E.

And in 09 years and you would have F2,3C1.0 without investing a penny after the

original F1,???E.his is the magic of compounding wherein you triple your money in

09 years.

M&,t'2e, &n+e,tor, ,#o%-" ne+er *'2e /#&-e &n+e,t&n$

hinking that customer should have loads of money to invest. It is in fact the

other way round. ne can start investing with a just small amount and the

earlier you start, the more time your money has to compound and grow.

Investing for shorter duration because customer do not want your money to be

lying somewhere else. 'emember, investing for the long term five years or

longerE can not only help you howtoinvest meet a range of different goals, it

gives your portfolio time to recover from any losses in the market.

23


35/79

#elling investments in a panic when the market is down or rush to buy PhotP

investments unless they truly suit your longterm goals.

rading too much is not advisable. If your portfolio has high turnover you

could face high trading costs and capital gains taxes.

Investing money to avoid taxes. ne should be aware of the tax implications

of their actions, but the first objective should always be to make a

fundamentally sound investment decision.

Ignoring return calculations. Always calculate the posttax effective yield for

each investment made.

Invest, monitor and review customers portfolio from time to time. >e

disciplined and your money will work harder for you.

29


36/79

2


37/79

CHAPTER

PORTFOLIO MANAGEMENT

2=


38/79

INTROD!CTION TO PORTFOLIO

MANAGEMENT

-irst, a definition of portfolio in the I>( view, a portfolio isB

... ne of a number of mechanisms, constructed to actuali!e significant elements in

the +nterprise >usiness #trategy.

It contains a selected, approved, and continuously evolving, collection of

Initiatives which are aligned with the organi!ing element of the /ortfolio, and, which

contribute to the achievement of goals or goal components identified in the +nterprise

>usiness #trategy.

he basis for constructing a portfolio should reflect the enterprise7s particular

needs. -or example, you might choose to build a portfolio around initiatives for a

specific product, business segment, or separate business unit within a multinational

organi!ation.

/ortfolio management is the process of managing money, including

investments, budgeting, banking and taxes. he portfolio management process

involves formulating, modifying and implementing a real estate investment strategy in

light of an investorHs broader overall investment objectives. It also can be defined as

the management of several properties owned by a single entity.

It is the art and science of making decisions about investment mix and policy,

matching investments to objectives, asset allocation for individuals and institutions,

and balancing risk vs. performance

2C


39/79

he '&* o( Port(o-&o M'n'$e*ent &, to 'c#&e+e t#e *';&*%* ret%rn (ro*

port(o-&o /#&c# #', )een "e-e$'te" to )e *'n'$e" ) 'n &n"&+&"%'- *'n'$er or

(&n'nc&'- &n,t&t%t&on. T#e *'n'$er #', to )'-'nce t#e p'r'*eter, /#&c# "e(&ne '

Goo" &n+e,t*ent &.e. ,ec%r&t -&%&"&t 'n" ret%rn. he goal is to obtain the

highest return.

T#e re-'t&on,#&p )et/een risk'n" returnis one of the essential concepts to

understand when investing and it is uniGue for every investor, the personal risk

tolerance could be influenced by current world events, investments experiences even

your inherited views on saving and investing r the client of the managed portfolio.

ADVANTAGES OF PORTFOLIO MANGEMENT

0:1 In"&+&"%'-- *'n'$e" 'cco%nt, /rovides a flexible format for optimi!ing

returns through effective fund management.

0


40/79

SCOPE OF PORTFOLIO MANAGMENT

he portfolio management is vast in nature. It is intended to provide a bird7s

eye view of the client7s assets. he portfolio manager has to have bottomless

knowledge of markets, funds etc. :onsidering this fact, the scope of the portfolio is

defined to satisfy following objectivesB

#tudy and compare various investment and attributes

*nderstand the necessity of portfolio management

#tudy and apply the portfolio management process

*nderstand client7s desires, investment potential and risk taking

approach

Identify various investment alternatives that can fit in client7s profile

/rovide the client an appropriate asset allocation mix based on certain

factors like time hori!on, risk tolerance etc.

Re$%-'r- *on&tor c-&ent, port(o-&o 'n" t'2e correct&+e 'ct&on, &(

e,,ent&'-

Attain the investment objective by strengthening the client7s portfolio

in the best possible way

3?


41/79

OB7ECTIVES OF PORTFOLIO

MANAGMENT

1 .S'(et O( F%n"he investment should be preserved, not be lost and remain in the

returnable position in cash or kind.

0. L&%&"&t/ortfolio must consists of such securities which could be en cashed

without any difficulty or involvement of time to meet urgent need for funds.

2. Re',on')-e ret%rnhe investment should earn a reasonable return to up keep the

declining value of money and must be compatible with opportunity cost of money in

terms of current income in the form of interest or dividend.

3. Apprec&'t&on &n C'p&t'-he money invested in portfolio must grow and result

into capital gains.

9. T'; p-'nn&n$+fficiently portfolio management is concerned with composite tax

planning covering income tax, capital gains tax , wealth tax, and gift tax.


42/79

as to avoid risk and difficult in their encashment . (arketability ensures liGuidity to

the portfolio.

Tpe, o( Port(o-&o,

Aggressive Portfolio

Aggressive /ortfolio consists almost entirely of eGuities. As such, with a very

aggressive portfolio, your main goal is aggressive capital growth over a long term

hori!on. #ince these portfolios carry a considerable amount of risk, the value of the

portfolio will vary widely in the short term. his strategy might be appropriate for

investors who seek $igh growth and who can tolerate wide fluctuations in market

values, over the short term.

30


43/79

32


44/79

Growth Portfolio

rowth portfolios mainly consist of eGuities, so these portfolios7 value tends

to fluctuate widely. If you have an aggressive portfolio, your main goal is to obtain

long term growth of the capital. As such the strategy of an aggressive portfolio is

often called a 5capital growthstrategy. o provide some diversifications, investors

with aggressive portfolios usually add some fixedincome securities. his strategy

might be appropriate for investors who have a preference for growth and who can

withstand significant fluctuations in market value.

33


45/79

Balanced Portfolio

>alanced portfolio are often referred as 5(oderately Aggressiveportfolios6 since

the asset composition is divided almost eGually between fixedincome securities and

eGuities in order to provide a balance of growth and income.

#ince these moderately aggressive portfolios have a higher level of risk than those

conservative portfolios mentioned above, select this strategy only if you have a longer

time hori!on generally more than five yearsE, and have a medium level of risk

tolerance. his strategy might be appropriate for investors who want the potential for

capital appreciation and some growth, and who can withstand moderate fluctuations

in market values

39


46/79

Conservative Portfolio

hese types of portfolios generally allocate a large percent of the present

portfolio to lower risk securities such as fixedincome and money market securities.

he main goal with a conservative model portfolio is to protect the principal value of

your portfolio. As such these models are often referred to as 5:apital /reservation

portfolios6.

+ven if they are very conservative and prefer to avoid the stock market

entirely, some exposure can help offset inflation. hey could invest the eGuity portion

in high Guality blue chip companies, or an index fund, since the goal is not to beta the

market. his strategy may be appropriate for investors who want to preserve their

capital and minimi!e fluctuations in market value.

3


47/79

INVESTMENT STRATEG8 IN PMS

0:1 Foc%, on ,e-ectc-e'r ,toc2 opport%n&t&e, Investments in stocks where there is a

clear earnings visibility.

0


48/79

T#e Port(o-&o M'n'$er

his is a new role for organi!ations that embrace a portfolio management

approach. A portfolio manager is responsible for continuing oversight of the contents

within a portfolio. If you have several portfolios within your portfolio structure, then

you will likely need a portfolio manager for each one. he exact range of

responsibilities and authorityE will vary from one organi!ation to anotherone, but the

basics are as followsB

ne portfolio manager oversees one portfolio.

he portfolio manager provides daytoday oversight.

he portfolio manager periodically reviews the performance of, and

conformance to expectations for, initiatives within the portfolio.

he portfolio manager ensures that data is collected and analy!ed about each

of the initiatives in the portfolio.

he portfolio manager enables periodic decision making about the future

direction of individual initiatives.

Ho/ t#e Port(o-&o M'n'$e*ent Ser+&ce /or2,

Investors sit down with one of the advisers and discuss exactly what they are

trying to achieveJ whether it is income, growth or a combination of the two, the level

of risk with which you feel comfortable and whether service is appropriate for them.

If investors decide to precede the portfolio will then be managed by specialist

investment team, headed by who look over the portfolios constantly, reacting instantly

to changes and taking investment decisions on your behalf.

3C


49/79

hese decisions are based on many years of experience, a deep understanding

of the market and the latest, most comprehensive investment research. As everyone

know, better results almost invariably derive from better information, more

experience and greater understanding.

%hat impact could this have on investors portfolioQ

-ive years ago (r. 'amikbhai, after careful consideration, invested in funds he

considered right for his portfolio. #ince then, some funds have underperformed and

he has held on to them, hoping they will do better. $owever, many of these funds will

not recover and, with hindsight, they should have been replaced when they started

underperforming.

It is a common story. (any investors are emotionally attached to their decisions we

hate to feel we are wrongE and others are too busy to stay fully informed or react

swiftly.

+very time your funds underperform, you lose in two waysJ through the money you

lose and the money you could have gained elsewhere.

A professional manager is impartial and does little else but watch and consider what is

happening in the markets so as to make what he thinks are the right decisions faster.

3


50/79

IN!""!#AI$NS%IP A&$NG 'A"I$(S P%AS!S $)

P$")$#I$

9?

#/+:I-I:AI) - I)"+#(+) >M+:I"+#A)D :)#'AI)

:$I:+ - (I; A##+#

-'(*AI) -/'-4I #'A+O

#+4+:I) - #+:*'I+#

/'-4I +;+:*I)

/'-4I '+"I#I)

/'-4I +"A4*AI)


51/79

CHAPTER =

INVESTMENTS AVEN!ES

91


52/79

INVESTMENT AVEN!ES

V'r&o%, opt&on, '+'&-')-e (or &n+e,t*ent 're

P#,&c'- ',,et,like 'eal +state, :ommodities etc.

Re'- e,t'te *'r2et is something that is always glowing like the )ew Oork

:ity. he reason being that this market has very rarely seen a downslide. 'eal estate

market in a common man terms would mean dealing in property which would include

purchase and sale of land and building. It could be both commercial space and

residential property. :ommercial space would mean the property that is purchased or

occupied for business purposes by small to large corporate houses. ne undeniable

reason why Indian real estate market has been a boom is due to the increasing number

of (ulti )ational :ompanies thronging the Indian 4and. he want for space is always

90


53/79

increasing with government in India giving additional concessions and recognition to

:orporate engaged in building I parks and commercial complex.

he best thing about real estate business is that every investor is bound to end up with

a sure margin of profit though the amount of profit may vary based on our bargaining

skills and the need of the buyer. /eople also engage in speculative business by

purchasing barren lands in under developed areas for a very minimal cost and wait for

couple of years till all necessary infrastructure is developed in that locality and then

sell the land at a huge profit. n the other side residential properties are also on the

increase. ne main reason behind this being that the $ousing Development

:orporation of India is promoting big 'esidential >uildings and all banks offer credit

to customers for purchase of property. his way majority of the population will end

up owing a property. And icing on the cake is that the value of the property is always

down to increase and would never decrease as such we would be assured about our

share of profit

COMMODITIES futures are contracts to buy specific Guantity of a particular

commodity at a future date. It is similar to the Index futures and #tock -utures but the

underlying happens to be commodities instead of #tocks and Indices. :ommodity

exchanges are regulated by -orward (arket :ommission -(:EJ -orward market

:ommission works under the purview of the ministry of food, Agriculture and /ublic

Distribution. :ommodity prices are generally less volatile than the stocks and this has

been statistically proven. herefore it7s relatively safer to trade in commodities. Also

the regulatory authorities ensure through continuous vigil that the commodity prices

are market driven and free from manipulations.

92


54/79

M'jor Co**o"&t E;c#'n$e,

he overnment of India permitted establishment of )ationallevel (ulti

:ommodity exchanges in the year 0??0 and accordingly three exchanges come in

picture. hey areB

(ulti:ommodity +xchange in India 4td, (umbai (:;E.

)ational :ommodity and Derivative +xchange of India, (umbai ):D+;E.

)ational (ulti :ommodity +xchange, Ahmadabad )(:+E.

$owever there are regional commodities exchanges functioning all over the

country. #harekhan :ommodities >roking /vt. 4td has got membership of both the

premier commodity exchanges i.e. (:; and ):D+;.

F&n'nc&'- ',,et, such as -ixed Deposits with >anks, #mall #aving

Instruments with /ost ffices, Insurance/rovident/ension -und, (utual -und etc.

or #ecurities market related instruments like #hares, >onds, and Debentures etc.

L&(e In,%r'nceis a contract for payment of money to the person assured or to

the person entitledE depending on the event insured against. /ayment of amount

depending on the type of policyE is made on the date of maturity or at specified

periodic intervals or at death if it occurs earlierE. hese policies involve periodical

payment of insurance premium by the assured to the corporation who provides the

insurance.

%hatever combinations your portfolio may comprise of, but do get yourself and your

family insured.

93


55/79

S'+&n$, Sc#e*e 'n" P%)-&c Pro+&"ent F%n" ,c#e*e, promoted by >anks.

*nder these options the rate of return is fixed and varies from CL to 1?L. he return

is paid in the form of interest usually half yearly Guarterly. he time period for

investment ranges from 1 year to 1? years and even more if the individual desires so.

Another safe mode of investment would be >ank deposits. >anks accept deposits

from customers in different denominations and for varied time periods and offer a

return ranging from 9L to L. he longer the duration of your investment the higher

would be the rate of return no the same. In the current market banks compete with one

another to attract customers by offering higher rates of interest.

M%t%'- (%n", 'n" ,toc2 *'r2et, are the other arena where people can make

profit. >ut one major drawback to this option is its association with market conditions

and the economy of the country. he basic concept behind mutual funds is that one

institution collects funds from likeminded people by issuing mutual fund units and

invests the funds in various outlets. At the end of the time period the institution

distributes the profit earned among its members. he difference between the amount

invested and the amount returned would be the profit for an investor. he risk

involved in this case is that in case the institution faces loss, then the same also has to

be shared by the members which might result in getting a sum less than what we had

actually invested. hough the stock market and mutual funds investments are subject

to market risks, still many young people believe in investing in such options because

the yield is high in such investinginIndia and the turnaround time is also very less.

>ut word of caution is that you need to be a real watch dog about the market

99


56/79

conditions and must have the mind set to accept losses and gains in the same frame of

mind.

Bon", Individuals have surplus funds in the form of savings which they want to

invest. :ompanies need funds to undertake good projects with high returns.

:ompanies provide individuals with instruments to invest their savings in.

ne such instrument is corporate bonds. #imilarly, governments also need funds for

various developmental projects. -urther, the government also needs to raise money to

finance the fiscal deficit. hey too tap the savings by issuing various kinds of bonds.

9


57/79

CHAPTER 5

VIRT!AL PORTFOLIO

9=


58/79

VIRT!AL PORTFOLIO0OF R, :? LACS1

TOTAL AMT INVESTED IN SHARES J 4


59/79

M.F NAV

INVEST

MENT RET!RNS

DBS CHOLA MONTHL8 INCOME PLAN :=.:5 @??? .?4 @??? 4@.=5

FRANKLIN TEMPLTON ASSET MGMT GRO6TH >?.:5 @???? :@.4>

TOTAL


60/79

CHAPTER

FINDINGS


61/79

FINDINGS

On t#e )',&, o( re,e'rc# "one (o--o/&n$ 're t#e (&n"&n$,

TOTAL

POINTS

PORTFOLIO

STRATEG8

CLIENT PROFILE

19 N =? :A/IA4

/'+#+'"AI)

:)#+'"AI"+ I)"+''

#++&I) /'+#+'"AI) -

:A/IA4 A)D A (D+'A+

4+"+4 - I):(+.

=1 N 109 I):(+ I)"+#' %I$ A 4%

4+'+):+ -' 'I#&

#++&I), A '+A+' 4+"+4

- I):(+ %I$ #A>I4IO

- /'I):I/A4

10< N 1? '%$ A)D I):(+ 4+## :)#+'"AI"+

I)"+#' #++&I)

:*''+) I):(+ /4*#

:A/I4A A//'+:IAI).

11 N 09? '%$ I)"+#' %I$ #(+

4+'+):+ -' 'I#&

#++&I),:A/IA4

A//'+:IAI) A)D

#+:)DA'I4O I):(+

091 N 2?9 A'+##I"+ '%$ +;/+'I+):+D I)"+#'

%I44I) A##*(+ A

'+A 4+"+4 - 'I#& -' A

/+)IA44O '+A+'.


62/79

As per my findings a strong portfolio should go throughB

Analy!e result of survey

:ommunicate results to analysts

Accordingly research analysts give ideas

>ased on their research ideas managers create and manage portfolios


63/79

CHAPTER :?

S!GGESTIONS


64/79

S!GGESTIONS

To C-&ent,

#elling investments in a panic when the market is down or rush to buy PhotP

investments unless they truly suit your longterm goals.

Invest and monitor portfolio from time to time.

reed makes invest without thinking twice. ne may land being a loser when

the desire to get more for less creeps in.

%hen fear strikes, one dreads to even take normal investment risks. Due to

this, one may lose on opportunities while investing in the market.

To F&r*

%ith the growing competition it needs to be more focused and give special

services to lead in market.

(ost of the client7s are connected through dial and trade service due to which

there is no direct connection i.e. seminars, get together etc should be

organi!ed.

-eedback should be taken by every customer regularly.

rgani!e and make accessible a database of customer information.


65/79

CHAPTER ::

LIMITATIONS


66/79

LIMITATIONS

+very work has its own limitations. 4imitations are extent to which the process should

not exceed. he following limitations for the project areB

In+e,tor &$nor'ncewas faced during discussions with respondents as the

topic is related with their income part so respondents were a bit reluctant

towards disclosing their true feelings, so I have to first built up the trust 8

then talk about the investments.

T&*e con,tr'&nt, have also become a major limitation as 5/ortfolio

(anagement6 is such a vast subject which involves indepth study analysis.

#ome c-&ent, 're not '/'re o( t#e *'r2et ,cen'r&o and to make them

understand from basics was a problem. Also at times they panic to the market

movements which was difficult to tackle with.

Gett&n$ 'ppo&nt*ent,with people was difficult as most of the people were

busy and it was difficult to contact them again and again.

Peop-e pro+&"e ('-,e "'t'as they were scared about providing actual data

such as net income, premium paid etc.


67/79

CHAPTER :

BIBLIOGRAPH8

=?


71/79

B&)-&o$r'p#

6e) ,&te,

www.moneycontrol.com

httpBwww.moneycontrol.commutualfundindia

httpBwww.moneycontrol.comstockscptmarketcompsearchnew.phpQ

fnameRprice8companynameRportfolioL0?(anagement

httpBwww.moneycontrol.comstockscptmarketcompsearchnew.phpQ

fnameRprice8companynameRcomanyL0?analysis

www.learntoinvest.com

httpBwww.learntoinvest.cominvestment/ortfolioheory and /ortfolio

(anagement.htm

www.valueresearchonline.com

httpBinvestsmartindia.comilfswebapp#earch.doQreG:odeRsearchAc

on8sch)ameRmutualL0?-und8selectptionRest8pageR1

Boo2,

I)"+#(+) A)D /'-4I A)A4O#I#

>yB /rasana :handra

):-( >asic (odule

.

=1
http://www.moneycontrol.com/http://www.moneycontrol.com/mutualfundindia/http://www.moneycontrol.com/stocks/cptmarket/compsearchnew.php?fname=price&companyname=portfolio%20Managementhttp://www.moneycontrol.com/stocks/cptmarket/compsearchnew.php?fname=price&companyname=portfolio%20Managementhttp://www.learntoinvest.com/http://www/http://www.valueresearchonline.com/http://investsmartindia.com/ilfswebapp/Search.do?reqCode=searchAc%0Don&schName=mutual%20Fund&selectOption=Test&page=1http://investsmartindia.com/ilfswebapp/Search.do?reqCode=searchAc%0Don&schName=mutual%20Fund&selectOption=Test&page=1http://www.moneycontrol.com/http://www.moneycontrol.com/mutualfundindia/http://www.moneycontrol.com/stocks/cptmarket/compsearchnew.php?fname=price&companyname=portfolio%20Managementhttp://www.moneycontrol.com/stocks/cptmarket/compsearchnew.php?fname=price&companyname=portfolio%20Managementhttp://www.learntoinvest.com/http://www/http://www.valueresearchonline.com/http://investsmartindia.com/ilfswebapp/Search.do?reqCode=searchAc%0Don&schName=mutual%20Fund&selectOption=Test&page=1http://investsmartindia.com/ilfswebapp/Search.do?reqCode=searchAc%0Don&schName=mutual%20Fund&selectOption=Test&page=1


72/79

CHAPTER :4

ANNE9!RE

=0


73/79

ANNE9!RE

%e,t&onn'&re

N'*e

A""re,,

C&t

P&n

Cont'ct '""re,,

Te-ep#one

D'te o( )&rt#

Se;

M'r&t'- St't%,

E"%c't&on'- %'-&(&c't&on,

:1 6HAT IS 8O!R AGE

o 1C N 0 3?

o 2? 33 2?

o 39 93 0?

o 99 N


74/79

o A>"+


75/79

41 DESCRIBE 8O!R F!T!RE EARNING POTENTIAL

o -A' */A:+ I)-4AI) 3?

o #(+%$A */A:+ I)-4AI) 2?

o &++/ /A:+ %I$ I)-4AI) 0?

o 4+## $A) I)-4AI) 1?

o '+I'+D 9

@1 DO 8O! HAVE AN EMERGENC8 F!ND

o ) ?

o S $A) 2 ()$ A-+' A; I):(+ 9

o S $A) < ()$# A-+' A; I):(+ 1?

o O+#, AD+T*A+ +(+'+):O -*)D 0?

1 IF 8O! INVEST NO6 6HEN 6ILL 8O! NEED THAT MONE8

o ? N 9 O+A'# 9

o < N 1? O+A'# 1?

o 11 N 0? O+A'# 19

o 01 O+A'# A>"+ 0?

=9


76/79

=


77/79

=1 IF 8O! INVEST NO6 6HAT OF 8O!R TOTAL INVESTABLE ASSETS

DOES THIS REPRESENT

o 09 L ' 4+## 0?

o 9? L ' 4+## 1?

o =9 L ' 4+## 9

o 1?? L ?

51 6HEN I INVEST MONE8 M8 PRIMAR8 GOAL IS TO

o /'+#+'"+ $+ "A4*+ - (O I)"+#(+) ?

o +(/$A#IU+ :*''+) I):(+ 1?

o /'I(A'I4O +)+'A+ :*''+) I):(+

%I$ #(+ '%$ 0?

o /'I(A'I4O +)+'A+ :*''+) I):(+

%I$ #(+ I):(+ 2?

o $A"+ #*>#A)IA4 4) +'( '%$ 3?

1 THE APPROPRIATE LOSS IN AN8 : 8EAR PERIOD THAT I 6O!LD BE

6ILLING TO ACCEPT IS

o (I)I(*( 4## ?

==


78/79

o 9 N 1? L 1?

o 1? N 0? L 19

o 0? L ' ('+ 2?

:?1 IF M8 INVESTMENT LOSES :? AFTER : MONTH AND THAT IS

CONSISTENT 6ITH THE OVERALL MARKET I 6O!LD SELL PORTION OF

M8 RISKIER ASSETS AND P!T THE MONE8 INTO SAFER ASSETS.

o #')4O A'++ ?

o DI#A'++ 9

o A'++ 1?

o #')4O DI#A'++ 0?

::1 HO6 CRITICAL IT IS THAT 8O! HAVE ACCESS TO 8O!R INVESTMENT

CAPITAL IN CASE OF EMERGENC8 OR OTHER INVESTMENT

OPP!RT!NITIES

o +;'+(+4O I(/'A) ?

o I(/'A) 1?

o #4I$4O I(/'A) 19

o ) I(/'A) A A44 2?

=C


79/79

0701119 Portfolio Managemnet Services

Documents

Transcript of 0701119 Portfolio Managemnet Services