SUBMITTED BY: SUBMITTED TO:

Pravesh Surana 08BS0002328 Prof. Vinod K. Agarwal

Anshul Kotawala 08BS0000443 Faculty, Portfolio Management
Neha Singhal 08BS0001941
Master Govind 08BS0001671
Nirmal K. Sharma 08BS0002012
 Portfolio Management
• A portfolio is an appropriate mix or collection of
investments held by institutions or a private individual.
• A portfolio is part of an investment and risk-limiting
strategy called diversification.
• The assets in the portfolio could include:
 stocks
 bonds
 Options
 Warrants
 gold certificates
 real estate
 futures contracts
 other item that is expected to retain its value.
Process of Portfolio
Management
Setting the objective of the Portfolio in terms of returns

Determining the appropriate Asset allocation

Implementing the Portfolio Design

Reassessing Portfolio weights

Rebalancing strategy
CONSIDERATIONS WHILE DESIGNING
PORTFOLIO
• Risk appetite of the investor
• Risk-Return expectations of the investor
• Micro-Macro economic factors effecting
the economy
• Global scenario and its effects on various
sectors of the economy
• Future outlook
• Time horizon of the investment
• Liquidity requirements of the investor
 Investment Avenues
Type Time line Risk Return Liquidity

Govt. Securities Medium/long Low Low Low

Bank Deposits Medium Low Low High

Post office Savings Medium Low Low Low/Moderate

Debentures Medium/Long Moderate Moderate Low/Moderate

Preference Shares Medium/Long Moderate Moderate Moderate

Convertible Shares Medium/Long Moderate/High Moderate/Low Low/Moderate

Bonds Medium/Long Moderate Moderate Low

Mutual Funds Medium/Long Moderate Moderate/High Moderate/High

Equity Shares Long High Unpredictable High/Low

Physical Assets Long Moderate/High Unpredictable Low

(gold, silver, real
estate etc.)
 Portfolio

Portfolio Worth - 20 lakhs

Profile of the client
Age 25 Years
Risk Taking Ability High
Yearly Income 7 to 8 Lakhs
Our Portfolio Construction
Type of Asset Investment (%) Amount

Mutual Fund 15 300000

Equity 60 1200000

Bond Market 5 100000

NSS 5 100000

Gold 15 300000

TOTAL 100 2000000

Allocation of Funds
Investment(%)
Mutual Fund
Gold
15%
15%

NSS
5%
Bond Market
5%

Equity
60%
 MUTUAL FUNDS (15%) - Blue chip
companies
Name of Fund Return (%)
Reliance Growth Fund 35.21
HDFC Equity Fund 34.29
Franklin India Blue Chip 32.18
Principal Personal Tax Saver 32.1
India Advantage (Birla Sunlife) 31.88

These are the returns over 5 years. So I think that 7.5% amount should be invested in the blue chip mutual
fund and I prefer these two:-

•Franklin Templeton.
•Reliance growth fund.

The Remaining 7.5% is invested in Real Estate Mutual Fund.

•Kotak Mahindra Realty Fund- Which is giving the highest CAGR of 38%.
Benefits:
•Professional expertise
•Diversification
•Liquidity
 EQUITIES (60%)
Script Weightage Amount Industry
Large Cap      
HUL 16.67% 200000FMCG
Bharti Airtel 16.67% 200000Telecom
NTPC 16.67% 200000Power
ITC 10.00% 120000FMCG
Total 60.00% 720000 
Mid Cap      
Websol Energy 16.67% 200000Energy
KEC International 13.33% 160000Power
Total 30.00% 360000 
Small Cap      
Educomp 10.00% 120000Education
Total 10.00% 120000 
       
Total 100.00% 1200000 
 Equity Distribution
Large Mid Small

10%

30%

60%
Script Weightage Amount Industry Beta CAGR 1st year 2nd Year 3rd 4th 5th Total
Large Cap                      

Hul 16.67% 200000FMCG 0.43 16% 32600 37913.8 38779.95 38921.13 38944.14 187159

Bharti Airtel 16.67% 200000Telecom 1.2 28% 56000 71680 76070.4 77299.71 77643.92 358694

NTPC 16.67% 200000Power 0.79 26% 52000 65520 69035.2 69949.15 70186.78 326691.1

ITC 10.00% 120000FMCG 0.65 22% 26400 32208 33485.76 33766.87 33828.71 159689.3
Total 60.00% 720000                 
Mid Cap                      

Websol Energy 16.67% 200000Energy  1.3 18% 36000 42480 43646.4 43856.35 43894.14 209876.9
KEC
International 13.33% 160000Power 0.78 30% 48000 62400 66720 68016 68404.8 313540.8
Total 30.00% 360000                 
Small Cap                      

Educomp 10.00% 120000Education 0.9 24% 28800 35712 37370.88 37769.01 37864.56 177516.5
Total 10.00% 120000                 
                       
Total 100.00% 1200000      279800 347913.8 365108.6 369578.2 370767.1 1733168
Power
Power
companies
companies
company name Criteria
company name Criteria
EPS P/E Return On Rank Rank Combined Final
EPS P/E Return On Rank Rank Combined Final
(Rs.) Ratio Capital According to According Rank Rank
(Rs.) Ratio Capital According to According Rank Rank
Employed P/E Ratio to ROCE
Employed P/E Ratio to ROCE
(ROCE) (%)
(ROCE) (%)
National 9.95 21.02 12.27 2 3 5 1
National 9.95 21.02 12.27 2 3 5 1
Thermal Power
Thermal Power
Corporation
Corporation
Power Trading 3.99 33.99 6.92 7 6 13 7
Power Trading 3.99 33.99 6.92 7 6 13 7
Corporation
Corporation
India
India
Neyveli Lignite 4.89 30.78 9.43 6 4 10 5
Neyveli Lignite 4.89 30.78 9.43 6 4 10 5
Corporation
Corporation
Suzlon Energy -3.13 0 6.52 1 7 8 4
Suzlon Energy -3.13 0 6.52 1 7 8 4
Limited
Limited
Reliance 50.38 21.11 6.22 3 8 11 6
Reliance 50.38 21.11 6.22 3 8 11 6
Infrastructure
Infrastructure
Limited
Limited
Tata Power 41.65 34.98 7.32 8 5 13 7
Tata Power 41.65 34.98 7.32 8 5 13 7
Company Ltd
Company Ltd
KEC 23.57 23.71 36.47 4 1 5 2
KEC 23.57 23.71 36.47 4 1 5 2
International Ltd
International Ltd
Jaiprakash Hydro 2.91 25.99 13.03 5 2 7 3
Jaiprakash Hydro 2.91 25.99 13.03 5 2 7 3
Power Ltd
Power Ltd
KEI Industries Ltd 0.2 151.03 4.36 9 9 18 9
KEI Industries Ltd 0.2 151.03 4.36 9 9 18 9
BF Utilities Ltd 1.23 1088.15 2.2 10 10 20 10
BF Utilities Ltd 1.23 1088.15 2.2 10 10 20 10
 Power Sector Comparisions
• NTPC • KEC International

Month Price %
Change
Dec. 09 552.6 237.16%
Month Price %
Change Dec. 08 163.9 -80.07%
Dec. 09 209.05 15.50%
Dec. 07 822.45 123.95%
Dec. 08 181 -27.61%
Dec. 07 250.05 83.32% Dec. 06 367.25
Dec. 06 136.4
Average return 23.73%
Average return 93.68%
 Fast Moving Consumer Goods (FMCG)
Sector
FMCG companies
company name Criteria
EPS P/E Return On Rank Rank Combined Final
(Rs.) Ratio Capital According According Rank Rank
Employed to P/E to ROCE
(ROCE) (%) Ratio
Britannia Industries 75.51 18.67 26 2 4 6 2
Colgate Palmolive 21.34 22.06 150 6 1 7 3
Dabur India 4.32 22.86 50 7 3 10 6
Godrej Consumer 6.26 21.21 18 4 7 11 7
Products Ltd
Hindustan Unilever 11.49 20.73 78 3 2 5 1
Limited
ITC Ltd. 8.65 21.37 26 5 4 9 4
Marico 2.33 25.73 25 8 6 14 8
Mcleod Russel 8.11 7.96 17 1 8 9 4
Shaw Wallace & 2.42 59.77 9 10 10 20 10
Company Ltd.
United Breweries 2.59 34.56 16 9 9 18 9
 Other Investment
BOND MARKET (5%)
•Fixed income
•Easily tradable
•Hypothecated to underlying assets

NSS (5%)
•Safety against mishappenings
•Good returns
•Safety of investment

Bullion Investment (15%)

•Insurance
•Capital Appreciation
 National Savings Certificate
National Savings Certificate Returns
Total Investment 200,000
Expected Growth (Yearly) 8%
Date Amount
1st Year 16,000
2nd Year 17,280
3rd Year 17,382
4th Year 17,391
5th Year 17,391
Total 85,444

• If we take out the money before the lock-in period (6 years), then we have to pay penalty.
Return on Portfolio - 5 year Perspective
Equity Investment Amount
   
Initial Investment 1200000
Total Returns 1733168
   
Return % Annually 29.42%
Return % for 5 Years 144.43%
Mutual Fund Investment  
   
Initial Investment 300000
Total Returns 198600
   
Return % Annually 13.24%
Return % for 5 Years 66.20%
NSC Investment  
   
Initial Investment 100000
Total Returns 85444
   
Return % Annually 8.54%
Return % for 5 Years 42.72%
Bullion Investment  
   
Initial Investment 300000
Total Returns 466710
   
Return % Annually 31.11%
Return % for 5 Years 155.57%