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A project report on portfolio management

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Published on Apr 20, 2011

A project report on portfolio management

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gaurav PANDEY , associate audit at KPMG US at Myntra
Hi , It would be great help if you can share this project on the below mention email id :
pandey.gaurav68@yahoo.com
1 month ago

Rawan Alrawaf , Marketing And Business Development Coordinator at Marketedia

kindly mail this project report on email to rawan.115@hotmail.com
1 month ago

manojangunawela1
kindly mail this project report on email id m.angunawela1@gmail.com
2 months ago

brishiv
 kindly mail this project report on email id shivika222000@yahoo.co.in
4 months ago

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kindly send this project report on email id shreyasgk47@gmail.com .
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A project report on portfolio management

1. 1. Projectsformba.blogspot.com INTRODUCTIONFrom The Rational Edge: The first in

a new series of articles onportfolio management, this introduction expresses IBMs
viewpointabout the foundations and essentials of portfolio management, anddiscusses
ideas and assets that support and enable effective portfoliomanagement practices.A good
way to begin understanding what portfolio management is(and is not) may be to define
the term portfolio. In a business context,we can look to the mutual fund industry to
explain the terms origins.Morgan Stanleys Dictionary of Financial Terms offers the
followingexplanation:If you own more than one security, you have an investment
portfolio.You build the portfolio by buying additional stocks, bonds, mutualfunds, or
other investments. Your goal is to increase the portfoliosvalue by selecting investments
that you believe will go up in price.According to modern portfolio theory, you can reduce
your investmentrisk by creating a diversified portfolio that includes enough
differenttypes, or classes, of securities so that at least some of them mayproduce strong
returns in any economic climate.Projectsformba.blogspot.com
2. 2. Projectsformba.blogspot.comNote that this explanation contains a number of important
ideas: A portfolio contains many investment vehicles. Owning a portfolio involves
making choices -- that is, deciding what additional stocks, bonds, or other financial
instruments to buy; when to buy; what and when to sell; and so forth. Making such
decisions is a form of management. The management of a portfolio is goal-driven. For
an investment portfolio, the specific goal is to increase the value. Managing a portfolio
involves inherent risks.Over time, other industry sectors have adapted and applied
theseideas to other types of "investments," including the following:Application portfolio
management: This refers to the practice ofmanaging an entire group or major subset of
software applicationswithin a portfolio. Organizations regard these applications
asinvestments because they require development (or acquisition) costsand incur
continuing maintenance costs. Also, organizations mustconstantly make financial
decisions about new and existing softwareapplications, including whether to invest in
modifying them, whetherto buy additional applications, and when to "sell" -- that is,
retire -- anobsolete software application.Projectsformba.blogspot.com
3. 3. Projectsformba.blogspot.comProduct portfolio management: Businesses group major
productsthat they develop and sell into (logical) portfolios, organized by majorline-of-
business or business segment. Such portfolios requireongoing management decisions
about what new products to develop(to diversify investments and investment risk) and
what existingproducts to transform or retire (i.e., spin off or divest). Project orinitiative
 portfolio management, an initiative, in the simplest sense, isa body of work with: A
specific (and limited) collection of needed results or work products. A group of people
who are responsible for executing the initiative and use resources, such as funding. A
defined beginning and end.Managers can group a number of initiatives into a portfolio
thatsupports a business segment, product, or product line. These effortsare goal-driven;
that is, they support major goals and/or componentsof the enterprises business strategy.
Managers must continuallychoose among competing initiatives (i.e., manage the
organizationsinvestments), selecting those that best support and enable diversebusiness
goals (i.e., they diversify investment risk). They must alsomanage their investments by
providing continuing oversight anddecision-making about which initiatives to undertake,
which tocontinue, and which to reject or discontinue.Projectsformba.blogspot.com
4. 4. Projectsformba.blogspot.com INTRODUCTION TO INDIAN BANKA premier bank
owned by the Government of India Established on 15th August 1907 as part of the
Swadeshi movement Serving the nation with a team of over 22000 dedicated staff
Total Business crossed Rs. 76000 Crores as on 31.03.2007 Operating Profit increased to
Rs.1358.59 Crores as on 31.03.2007 Net Profit increased to Rs.759.77 Crores as on
31.03.2007 Net worth improved to Rs.3621 Crores as on 31.03.2007 1476 Branches
spread all over IndiaInternational Presence Overseas branches in Singapore and
Colombo including a Foreign Currency Banking Unit at Colombo 229 Overseas
Correspondent banks in 69 countriesDiversified banking activities - 3 Subsidiary
companies Indbank Merchant Banking Services Ltd IndBank Housing Ltd. IndFund
Management LtdA front runner in specialized banking 88 Forex Authorized branches
inclusive of 3 Specialized Overseas Branches at Chennai , Bangalore and Mumbai
exclusively for handling forex transactions arising out of Export, Import, Remittances
and Non Resident Indian business 5 specialized NRI Branches exclusively for servicing
Non- Resident Indians 1 Small Scale Industries Branch extending finance exclusively to
SSI unitsLeadership in Rural DevelopmentProjectsformba.blogspot.com
5. 5. Projectsformba.blogspot.com Loan products like Artisan Card, Kisan Card, Kisan
Bike Scheme, Yuva Kisan Vidya Nidhi Yojana to meet diverse credit needs of farmers.
Provision of technical assistance and project reports in Agriculture to entrepreneurs
through Agricultural Consultancy & Technical Services (ACTS) 2 Specialised
Agricultural Finance branches to finance High Tech Agricultural Projects.A pioneer in
introducing the latest technology in Banking 100% Business Computerisation 168
Centres throughout the country covered under Anywhere Banking Core Banking
Solution(CBS) in 1204 branches and 77 extension counters. 429 connected Automated
Teller Machines(ATM) in 99 cities/towns 24 x 7 Service through 8500 ATMs under
shared network Internet and Tele Banking services to all Core Banking customers e-
payment facility for Corporate customers Cash Management Services Depository
Services Reuter Screen, Telerate, Reuter Monitors, Dealing System provided at all
Overseas Branches I B Credit Card Launched I B Gold
CoinProjectsformba.blogspot.com
6. 6. Projectsformba.blogspot.com Indian Bank enters into a Strategic Alliance with Pnb
PrincipalChennai, January 25, 2006: Indian Bank is enlarging its activities todeliver
value-added services to its customers. The Bank is presentlyselling the Insurance
products, both Life and Non-life as a CorporateAgent. The Bank is concentrating on
optimizing the 3 Ps, People,Process and Products to give maximum advantage to its
 customersand to face the market competition by exploiting the
emergingopportunities.Indian Bank today announced a strategic alliance with Pnb
PrincipalInsurance Advisory Co., Pvt. Ltd. in the insurance advisory businessand Pnb
Principal Financial Planners Pvt. Ltd. in the financialplanning business. As the alliance
will enable access to the Financialproducts of 30 Insurance companies both life and non-
life and anequal number of Investment solutions to the Banks Customers underone roof,
the Banks emphasis would be to serve as an agent to itscustomers.As per the scope of
the alliance with Pnb Principal InsuranceAdvisory Co., Pvt. Ltd., Indian Bank has taken
an equity stake in theCompany. This partnership will also deliver risk
managementsolutions to Indian Bank customers through the Insurance advisoryroute. The
solutions offered will include risk assessment, insuranceportfolio analysis & placement,
insurance portfolio administration, andclaims management.As per Indian Banks strategic
alliance with Pnb Principal FinancialPlanners Pvt. Ltd., the Bank will distribute the
investment solutionsoffered by Pnb Principal Financial Planners through its
extensivebranch network. Pnb Principal Financial Planners will provide supportin the
area of financial planning, investment advisory, research,systems and business
development to Indian Bank. The strategicProjectsformba.blogspot.com
7. 7. Projectsformba.blogspot.comalliance will enable customers of Indian Bank to access a
wide rangeof superior investment solutions.Announcing the partnership with Indian
Bank, Sanjay Sachdev,Country Manager-India, Principal International said, Banks
havecurrently emerged as the largest distribution channel for financialinvestment options.
We are pleased to associate ourselves withIndian Bank. This partnership with Indian
Bank will make a range ofinvestment solutions more accessible to retail investors of
IndianBank.Dr. K.C. Chakrabarty, Chairman and Managing Director, IndianBank said,
The alliance with Pnb Principal in the areas of RiskManagement, Insurance and
Investment will help in providing aOne-stop solution to the 15 million strong customers
of IndianBank throughout the country. The Tie-up will help realize ourcherished goal of
making our Bank, the best people to bankwith.Elaborating, Mr. B Sambamurthy,
Executive Director has saidthat this is a part of Banks mission to provide all
financialproducts under one roof. This tie-up brings a paradigm shift frombeing an agent
of Insurance Company to one of being acustomer agent.Projectsformba.blogspot.com
8. 8. Projectsformba.blogspot.com METHODOLOGYPortfolio Management is used to
select a portfolio of new productdevelopment projects to achieve the following goals:
Maximize the profitability or value of the portfolio Provide balance Support the
strategy of the enterprisePortfolio Management is the responsibility of the senior
management teamof an organization or business unit. This team, which might be called
theProduct Committee, meets regularly to manage the product pipeline andmake
decisions about the product portfolio. Often, this is the same groupthat conducts the
stage-gate reviews in the organization.A logical starting point is to create a product
strategy - markets, customers,products, strategy approach, competitive emphasis, etc. The
second step is tounderstand the budget or resources available to balance the portfolio
against.Third, each project must be assessed for profitability (rewards),
investmentrequirements (resources), risks, and other appropriate factors.The weighting of
the goals in making decisions about products varies fromcompany. But organizations
must balance these goals: risk vs. profitability,Projectsformba.blogspot.com
9. 9. Projectsformba.blogspot.comnew products vs. improvements, strategy fit vs. reward,
market vs. productline, long-term vs. short-term.Several types of techniques have been
used to support the portfoliomanagement process: Heuristic models Scoring
techniques Visual or mapping techniquesThe earliest Portfolio Management techniques
optimized projectsprofitability or financial returns using heuristic or mathematical
models.However, this approach paid little attention to balance or aligning theportfolio to
the organizations strategy. Scoring techniques weight and scorecriteria to take into
account investment requirements, profitability, risk andstrategic alignment. The
shortcoming with this approach can be an overemphasis on financial measures and an
inability to optimize the mix ofprojects. Mapping techniques use graphical presentation to
visualize aportfolios balance. These are typically presented in the form of a two-
dimensional graph that shows the trade-offs or balance between two factorssuch as risks
vs. profitability, marketplace fit vs. product line coverage,financial return vs. probability
of success, etc.Projectsformba.blogspot.com
10. 10. Projectsformba.blogspot.comThe chart shown above provides a graphical view of the
project portfoliorisk-reward balance. It is used to assure balance in the portfolio of
projects -neither too risky nor conservative and appropriate levels of reward for therisk
involved. The horizontal axis is Net Present Value; the vertical axis isProbability of
Success. The size of the bubble is proportional to the totalrevenue generated over the
lifetime sales of the product.While this visual presentation is useful, it cant prioritize
projects.Therefore, some mix of these techniques is appropriate to support thePortfolio
Management Process. This mix is often dependent upon thepriority of the
goals.Projectsformba.blogspot.com
11. 11. Projectsformba.blogspot.comThe recommended approach is to start with the overall
business plan thatshould define the planned level of R&:D investment, resources
(e.g.,headcount, etc.), and related sales expected from new products. Withmultiple
business units, product lines or types of development, werecommend a strategic
allocation process based on the business plan. Thisstrategic allocation should apportion
the planned R&D investment intobusiness units, product lines, markets, geographic areas,
etc. It may alsobreakdown the R&D investment into types of development, e.g.,
technologydevelopment, platform development, new products,
andupgrades/enhancements/line extensions, etc.Once this is done, then a portfolio listing
can be developed including therelevant portfolio data. We favor use of the development
productivity index(DPI) or scores from the scoring method. The development
productivityindex is calculated as follows: (Net Present Value x Probability of Success)
/Development Cost Remaining. It factors the NPV by the probability of bothtechnical and
commercial success. By dividing this result by thedevelopment cost remaining, it places
more weight on projects nearercompletion and with lower uncommitted costs. The
scoring method uses aset of criteria (potentially different for each stage of the project) as
a basisfor scoring or evaluating each project. An example of this scoring method isshown
with the worksheet below.Projectsformba.blogspot.com
12. 12. Projectsformba.blogspot.comWeighting factors can be set for each criterion. The
evaluators on a ProductCommittee score projects (1 to 10, where 10 are best). The
worksheetcomputes the average scores and applies the weighting factors to computethe
overall score. The maximum weighted score for a project is 100.This portfolio list can
then be ranked by either the developmentpriority index or the score. An example of the
 portfolio list is shownbelow and the second illustration shows the category summary
forthe scoring method.Projectsformba.blogspot.com
13. 13. Projectsformba.blogspot.comProjectsformba.blogspot.com
14. 14. Projectsformba.blogspot.comOnce the organization has its prioritized list of projects,
it then needs todetermine where the cutoff is based on the business plan and the
plannedlevel of investment of the resources avaialable. This subset of the highpriority
projects then needs to be further analyzed and checked. The firststep is to check that the
prioritized list reflects the planned breakdown ofprojects based on the strategic allocation
of the business plan. Pie chartssuch as the one below can be used for this purpose.Other
factors can also be checked using bubble charts. For example,the risk-reward balance is
commonly checked using the bubble chartshown earlier. A final check is to analyze
product and technologyroadmaps for project relationships. For example, if a lower
priorityplatform project was omitted from the protfolio priority list, thesubsequent higher
priority projects that depend on that platform orProjectsformba.blogspot.com
15. 15. Projectsformba.blogspot.complatform technology would be impossible to execute
unless thatplatform project were included in the portfolio priority list.Finally, this
balanced portfolio that has been developed is checkedagainst the business plan as shown
below to see if the plan goalshave been achieved - projects within the planned R&D
investmentand resource levels and sales that have met the goals.With the significant
investments required to develop new productsand the risks involved, Portfolio
Management is becoming anincreasingly important tool to make strategic decisions about
productdevelopment and the investment of company resources. In manycompanies,
current year revenues are increasingly based on newproducts developed in the last one to
three years.Projectsformba.blogspot.com
16. 16. Projectsformba.blogspot.com MEANING OF PORTFOLIO MANAGEMENT
Portfolio is a collection of asset. The asset may be physical or financial like Shares
Bonds, Debentures, and Preference Shares etc. The individual investor or a fund
manager would not like to put all his money in the shares of one company, for that would
amount to great risk. Main objective is to maximize portfolio return and at the same
time minimizing the portfolio risk by diversification. Portfolio management is the
management of various financial assets, which comprise the portfolio. According to
Securities and Exchange Board of India (Portfolio manager) Rules, 1993; portfolio
means the total holding of securities belonging to any person; Designing portfolios to
suit investor requirement often involves making several projections regarding the future,
based on the current information. When the actual situation is at variance from the
projections portfolio composition needs to be changed. One of the key inputs in
portfolio building is the risk bearing ability of the investor. Portfolio management can
be having institutional, for example, Unit Trust, Mutual Funds, Pension Provident and
Insurance Funds, Investment Companies and non- Investment
Companies.Projectsformba.blogspot.com
17. 17. Projectsformba.blogspot.com Institutional e.g. individual, Hindu undivided
families, Non- investment Companys etc. The large institutional investors avail
services of professionals. A professional, who manages other peoples or institutions
investment portfolio with the object of profitability, growth and risk minimization, is
known as a portfolio manager. The portfolio manager performs the job of security
 analyst. In case of medium and large sized organization, job function of portfolio
manager and security analyst are separate. Portfolios are built to suit the return
expectations and the risk appetite of the investor.Projectsformba.blogspot.com
18. 18. Projectsformba.blogspot.com INVESTMENT PORTFOLIO MANAGEMENT AND
PORTFOLIO THEORYPortfolio theory is an investment approach developed by
University ofChicago economist Harry M. Markowitz (1927 - ), who won a NobelPrize
in economics in 1990. Portfolio theory allows investors toestimate both the expected risks
and returns, as measuredstatistically, for their investment portfolios.Markowitz described
how to combine assets into efficiently diversifiedportfolios. It was his position that a
portfolios risk could be reducedand the expected rate of return could be improved if
investmentshaving dissimilar price movements were combined. In other
words,Markowitz explained how to best assemble a diversified portfolio andproved that
such a portfolio would likely do well.There are two types of Portfolio Strategies:A.
Passive Portfolio StrategyA strategy that involves minimal expectation input, and instead
relieson diversification to match the performance of some market index.B. Active
Portfolio StrategyA strategy that uses available information and forecasting techniquesto
seek a better performance than a portfolio that is simply
diversifiedbroadlyProjectsformba.blogspot.com
19. 19. Projectsformba.blogspot.com BASIC CONCEPTS AND COMPONENTS FOR
PORTFOLIO MANAGEMENTNow that we understand some of the basic dynamics and
inherentchallenges organizations face in executing a business strategy viasupporting
initiatives, lets look at some basic concepts andcomponents of portfolio management
practices.1.The PortfolioFirst, we can now introduce a definition of portfolio that relates
moredirectly to the context of our preceding discussion. In the IBM view, aportfolio is:
One of a number of mechanisms, constructed to actualizesignificant elements in the
Enterprise Business Strategy.It contains a selected, approved, and continuously evolving,
collectionof Initiatives which are aligned with the organizing element of thePortfolio,
and, which contribute to the achievement of goals or goalcomponents identified in the
Enterprise Business Strategy. The basisfor constructing a portfolio should reflect the
enterprises particularneeds. For example, you might choose to build a portfolio
aroundinitiatives for a specific product, business segment, or separatebusiness unit within
a multinational organization.Projectsformba.blogspot.com
20. 20. Projectsformba.blogspot.com2.The Portfolio StructureAs we noted earlier, a portfolio
structure identifies and contains anumber of portfolios. This structure, like the portfolios
within it, shouldalign with significant planning and results boundaries, and withbusiness
components. If you have a product-oriented portfoliostructure, for example, then you
would have a separate portfolio foreach major product or product group. Each portfolio
would contain allthe initiatives that help that particular product or product
groupcontribute to the success of the enterprise business strategy.3.The Portfolio
ManagerThis is a new role for organizations that embrace a portfoliomanagement
approach. A portfolio manager is responsible forcontinuing oversight of the contents
within a portfolio. If you haveseveral portfolios within your portfolio structure, then you
will likelyneed a portfolio manager for each one. The exact range ofresponsibilities (and
authority) will vary from one organization toanother,1 but the basics are as follows: One
portfolio manager oversees one portfolio. The portfolio manager provides day-to-day
oversight. The portfolio manager periodically reviews the performance of, and
 conformance to expectations for, initiatives within the
portfolio.Projectsformba.blogspot.com
21. 21. Projectsformba.blogspot.com The portfolio manager ensures that data is collected
and analyzed about each of the initiatives in the portfolio. The portfolio manager
enables periodic decision making about the future direction of individual initiatives.4.
Portfolio Reviews and Decision MakingAs initiatives are executed, the organization
should conduct periodicreviews of actual (versus planned) performance and conformance
tooriginal expectations. Typically, organization managers specify thefrequency and
contents for these periodic reviews, and individualportfolio managers oversee their
planning and execution. The reviewsshould be multi-dimensional, including both tactical
elements (e.g.,adherence to plan, budget, and resource allocation) and strategicelements
(e.g., support for business strategy goals and delivery ofexpected organizational
benefits).A significant aspect of oversight is setting multiple decision points foreach
initiative, so that managers can periodically evaluate data anddecide whether to continue
the work. These"continue/change/discontinue" decisions should be driven by
anunderstanding (developed via the periodic reviews) of a giveninitiatives continuing
value, expected benefits, and strategiccontribution, Making these decisions at multiple
points in theinitiatives lifecycle helps to ensure that managers will continuallyexamine
and assess changing internal and external circumstances,needs, and
performance.Projectsformba.blogspot.com
22. 22. Projectsformba.blogspot.com5. GovernanceImplementing portfolio management
practices in an organization is atransformation effort that typically involves developing
newcapabilities to address new work efforts, defining (and filling) newroles to identify
portfolios (collections of work to be done), anddelineating boundaries among work
efforts and collections.Implementing portfolio management also requires creating a
structureto provide planning, continuing direction, and oversight and control forall
portfolios and the initiatives they encompass. That is where thenotion of governance
comes into play. The IBM view of governanceis:An abstract, collective term that defines
and contains a framework fororganization, exercise of control and oversight, and
decision-makingauthority, and within which actions and activities are legitimately
andproperly executed; together with the definition of the functions, theroles, and the
responsibilities of those who exercise this oversightand decision-making.Portfolio
management governance involves multiple dimensions,including: Defining and
maintaining an enterprise business strategy. Defining and maintaining a portfolio
structure containing all of the organizations initiatives (programs, projects,
etc.).Projectsformba.blogspot.com
23. 23. Projectsformba.blogspot.com Reviewing and approving business cases that propose
the creation of new initiatives. Providing oversight, control, and decision-making for all
ongoing initiatives. Ownership of portfolios and their contents.Each of these dimensions
requires an owner -- either an individual ora collective -- to develop and approve plans,
continuously adjustdirection, and exercise control through periodic assessment andreview
of conformance to expectations.A good governance structure decomposes both the types
of work andthe authority to plan and oversee work. It defines individual andcollective
roles, and links them to an authority scheme. Policies thatare collectively developed and
agreed upon provide a framework forthe exercise of governance. The complexities of
governancestructures extend well beyond the scope of this article. Manyorganizations
 turn to experts for help in this area because it is socritical to the success of any business
transformation effort thatencompasses portfolio management. For now, suffice it to say
that itis worth investing time and effort to create a sound and flexiblegovernance
structure before you attempt to implement portfoliomanagement
practices.Projectsformba.blogspot.com
24. 24. Projectsformba.blogspot.com6.Portfolio management essentialsEvery practical
discipline is based on a collection of fundamentalconcepts that people have identified and
proven (and sometimesrefined or discarded) through continuous application. These
conceptsare useful until they become obsolete, supplanted by newer and moreeffective
ideas.For example, in Roman times, engineers discovered that if theupstream supports of
a bridge were shaped to offer little resistance tothe current of a stream or river, they
would last longer. They appliedthis principle all across the Roman Empire. Then, in the
Middle Ages,engineers discovered that such supports would last even longer iftheir
downstream side was also shaped to offer little resistance to thecurrent. So that became
the new standard for bridge construction.Portfolio management, like bridge-building, is a
discipline, and anumber of authors and practitioners have documented fundamentalideas
about its exercise. Recently, based on our experiences withclients who have implemented
portfolio management practices andon our research into the discipline, we have started to
shape an IBMview of fundamental ideas around portfolio management. We arebeginning
to express this view as a collection of "essentials" that are,in turn, grouped around a small
collection of portfolio managementthemes.Projectsformba.blogspot.com
25. 25. Projectsformba.blogspot.comFor example, one of these themes is initiative value
contribution. Itsuggests that the value of an initiative (i.e., a program or project)should be
estimated and approved in order to start work, and thenassessed periodically on the basis
of the initiatives contribution to thegoals and goal components in the enterprise business
strategy.These assessments determine (in part) whether the initiative warrantscontinued
support.Projectsformba.blogspot.com
26. 26. Projectsformba.blogspot.com OBJECTIVES OF PORTFOLIO MANAGEMENT The
basic objective of Portfolio Management is to maximize yield and minimize risk. The
other objectives are as follows: a) Stability of Income: An investor considers stability of
income from his investment. He also considers the stability of purchasing power of
income. b) Capital Growth: Capital appreciation has become an important investment
principle. Investors seek growth stocks which provide a very large capital appreciation by
way of rights, bonus and appreciation in the market price of a share. c) Liquidity: An
investment is a liquid asset. It can be converted into cash with the help of a stock
exchange. Investment should be liquid as well as marketable. The portfolio should
contain a planned proportion of high-grade and readily salable investment. d) Safety:
safety means protection for investment against loss under reasonably variations. In order
to provide safety, a careful review of economic and industry trends is necessary. In other
words, errors in portfolio are unavoidable and it requires extensive
diversification.Projectsformba.blogspot.com
27. 27. Projectsformba.blogspot.com e) Tax Incentives: Investors try to minimize their tax
liabilities from the investments. The portfolio manager has to keep a list of such
investment avenues along with the return risk, profile, tax implications, yields and other
returns.Projectsformba.blogspot.com
28. 28. Projectsformba.blogspot.comThere are three goals of portfolio management: 1.
Maximize the value of the portfolio 2. Seek balance in the portfolio 3. Keep portfolio
projects strategically alignedIt provides a set of portfolio management tools to help
achieve these goals.With multiple business units, product lines or types of development,
werecommend a strategic allocation process based on the business plan. TheMaster
Project Schedule provides a summary of all-active as well asproposed projects and
classifies them by status (active, proposed, on-hold)and by business unit/product line to
align projects with the strategicallocation. The Master Project Schedule also provides
additional portfolioinformation to prioritize projects using either a scorecard method or
thedevelopment productivity index (DPI *). In addition to this prioritization,PD-Trek
provides a Risk-Reward Bubble Chart and a Project Type Pie Chartto assure balance. A
Product or Technology Roadmap template is providedto help visualize platform and
technology relationships to assure criticalproject relationships are not overlooked with
this prioritization. This willallow management to develop a balanced approach to
selecting andcontinuing with the appropriate mix of projects to satisfy the three
goals.Projectsformba.blogspot.com
29. 29. Projectsformba.blogspot.com FUNCTIONS OF PORTFOLIO MANAGEMENTThe
basic purpose of portfolio management is to maximize yield andminimize risk. Every
investor is risk averse. In order to diversify therisk by investing into various securities
following functions arerequired to be performed.The functions undertaken by the
portfolio management are asfollows: 1. To frame the investment strategy and select an
investment mix to achieve the desired investment objective; 2. To provide a balanced
portfolio which not only can hedge against the inflation but can also optimize returns
with the associated degree of risk; 3. To make timely buying and selling of securities; 4.
To maximize the after-tax return by investing in various taxes saving investment
instruments.Projectsformba.blogspot.com
30. 30. Projectsformba.blogspot.com STEPS IN PORTFOLIO MANAGEMENT
Performance Portfolio Evaluation Revision Portfolio Execution STEPS Selection of
Asset Mix Identification Portfolio Of Strategy ObjectivesProjectsformba.blogspot.com
31. 31. Projectsformba.blogspot.com 1) IDENTIFICATION OF THE OBJECTIVES The
starting point in this process is to determine the characteristics of the various investments
and then matching them with the individuals need and preferences. All the personal
investing is designed in order to achieve certain objectives. These objectives may be
tangible such as buying a car, house etc. and intangible objectives such as social status,
security etc. Similarly, these objectives may be classified as financial or personal
objectives. Financial objectives are safety, profitability and liquidity. Personal or
individual objectives may be related to personal characteristics of individuals such as
family commitments, status, depends, educational requirements, income, consumption
and provision for retirement etc. 2) FORMULATION OF PORTFOLIO STRATEGY
The aspect of Portfolio Management is the most important element of proper portfolio
investment and speculation. While planning, a careful review should be conducted
about the financial situation and current capital market conditions. This will suggest a
set of investment and speculation policies to be followed. The statement of investment
policies includes the portfolio objectives, strategies and
constraints.Projectsformba.blogspot.com
32. 32. Projectsformba.blogspot.com Portfolio strategy means plan or policy to be
followed while investing in different types of assets. There are different investment
strategies. They require changes as time passes, investors wealth changes, security
price change, investors knowledge expands. Therefore, the optional strategic asset
allocation also changes. The strategic asset allocation policy would call for broad
diversification through an indexed holding of virtually all securities in the asset class. 3)
SELECTION OF ASSET MIX The most important decision in portfolio management
is selection of asset mix. It means spreading out portfolio investment into different
asset classes like bonds, stocks, mutual funds etc. In other words selection of asset mix
means investing in different kinds of assets and reduces risk and volatility and maximizes
returns in investment portfolio. Selection of asset mix refers to the percentage to the
invested in various security classes. The security classes are simply the type of
securities as under: money market instrument fixed income
securityProjectsformba.blogspot.com
33. 33. Projectsformba.blogspot.com equity shares real estate investment international
securities Once the objective of the portfolio is determined the securities to be included
in the portfolio must be selected. Normally the portfolio is selected from a list of high-
quality bonds that the portfolio manager has at hand. The portfolio manager has to
decide the goals before selecting the common stock. The goal may be to achieve pure
growth, growth with some income or income only. Once the goal has been selected, the
portfolio manager can select the common stocks. 4) PORTFOLIO EXECUTION: The
process of portfolio management involves a logical set of steps common to any decision,
plan, implementation and monitor. Applying this process to actual portfolios can be
complex. Therefore, in the execution stage, three decisions need to be made, if the
percentage holdings of various asset classes are currently different from desired
holdings.Projectsformba.blogspot.com
34. 34. Projectsformba.blogspot.com The portfolio than, should be rebalanced. If the
statement of investment policy requires pure investment strategy, this is only thing, which
is done in the execution stage. However, many portfolio managers engage in the
speculative transactions in the belief that such transactions will generate excess risk-
adjusted returns. Such speculative transactions are usually classified as timing or
selection decisions. Timing decisions over or under weight various asset classes,
industries or economic sectors from the strategic asset allocation. Such timing
decisions are known as tactical asset allocation and selection decision deals with
securities within a given asset class, industry group or economic sector. The investor
has to begin with periodically adjusting the asset mix to the desired mix, which is known
as strategic asset allocation. Then the investor or portfolio manager can make any
tactical asset allocation or security selection decision. 5) PORTFOLIO REVISION
Portfolio management would be an incomplete exercise without periodic review. The
portfolio, which is once selected, has to be continuously reviewed over a period of time
and if necessary revised depending on the objectives of
investor.Projectsformba.blogspot.com
35. 35. Projectsformba.blogspot.com Thus, portfolio revision means changing the asset
allocation of a portfolio. Investment portfolio management involves maintaining proper
combination of securities, which comprise the investors portfolio in a manner that they
 give maximum return with minimum risk. For this purpose, investor should have
continuous review and scrutiny of his investment portfolio. Whenever adverse
conditions develop, he can dispose of the securities, which are not worth. However, the
frequency of review depends upon the size of the portfolio, the sum involved, the kind of
securities held and the time available to the investor. The review should include a
careful examination of investment objectives, targets for portfolio performance, actual
results obtained and analysis of reason for variations. The review should be followed
by suitable and timely action. There are techniques of portfolio revision. Investors
buy stock according to their objectives and return-risk framework. These fluctuations
may be related to economic activity or due to other factors. Ideally investors should
buy when prices are low and sell when prices rise to levels higher than their normal
fluctuations.Projectsformba.blogspot.com
36. 36. Projectsformba.blogspot.com The investor should decide how often the portfolio
should be revised. If revision occurs to often, transaction and analysis costs may be
high. If revision is attempted too infrequently the benefits of timing may be foregone.
The important factor to take into consideration is, thus, timing for revision of portfolio.
6) PORTFOLIO PERFORMANCE EVALUATION: Portfolio management involves
maintaining a proper combination of securities, which comprise the investors portfolio in
a manner that they give maximum return with minimum risk. The investor should have
continues review and scrutiny of his investment portfolio. These rates of return should
be based on the market value of the assets of the fund. Complete evaluation of the
portfolio performance must include examining a measure of the degree of risk taken by
the fund. A portfolio manager, by evaluating his own performance can identify sources
of strength or weakness. It can be viewed as a feedback and control mechanism that
can make the investment management process more
effective.Projectsformba.blogspot.com
37. 37. Projectsformba.blogspot.com Good performance in the past might have resulted
from good luck, in which case such performance may not be expected to continue in the
future. On the other hand, poor performance in the past might have been result of bad
luck. Therefore, the first task in performance evaluation is to determine whether past
performance was good or poor. Then the second task is to determine whether such
performance was due to skill or luck. Good performance in the past may have resulted
from the actions of a highly skilled portfolio manager. The performance of portfolio
should be measured periodically, preferably once in a month or a quarter. The
performance of an individual stock should be compared with the overall performance of
the market.Projectsformba.blogspot.com
38. 38. Projectsformba.blogspot.com TYPES OF PORTFOLIO MANAGEMENT:The two
types of portfolio management services are available o theinvestors: Discretionary
portfolio Non-discretionary Management portfolio Management 1. The Discretionary
portfolio management services (DPMS): In this type of services, the client parts with
his money in favor of manager, who in return, handles all the paper work, makes all the
decisions and gives a good return on the investment and for this he charges a certain fees.
In this discretionary PMS, to maximize the yield, almost all portfolio managers parks
the funds in the money market securities such as overnight market, 182 days treasury
bills and 90 days commercial bills. Normally, return on such investment varies from 14
 to 18 per cent, depending on the call money rates prevailing at the time of
investment.Projectsformba.blogspot.com
39. 39. Projectsformba.blogspot.com 2. The Non-discretionary portfolio management
services: The manager function as a counselor, but the investor is free to accept or
reject the managers advice; the manager for a services charge also undertakes the paper
work. The manager concentrates on stock market instruments with a portfolio tailor
made to the risk taking ability of the investor.Projectsformba.blogspot.com
40. 40. Projectsformba.blogspot.com EQUITY PORTFOLIO MANAGEMENT It is
logical that the expected return of a portfolio should depend on the expected return of the
security contained in it. There are two approaches to the selection of equity portfolio.
One is technical analysis and the other is fundamental analysis. Technical analysis
assumes that the price of a stock depends on supply and demand in the stock market.
All financial and market information of given security is already reflected in the market
price. Charts are drawn to identify price movements of a given security over a period
of time. These charts enable the investors to predict the future movement of the price
of security. Equity portfolio is a risky portfolio, but at the same time the return is also
higher. Equity portfolio provides highest returns. An efficient portfolio manager can
obviously give more weight age to fundamental analysis than the technical
analysis.Projectsformba.blogspot.com
41. 41. Projectsformba.blogspot.com The fundamental analysis includes the study of ratio
analysis, past and present track record of the company, quality of management,
government policies etc. There may be several combinations of investment portfolio.
Allocation of funds for equity portfolio is a question of top most importance to any
portfolio manager. Among all risky investments, selection of the best possible
combination and allocation of funds among these selected investment groups are of great
importance.Projectsformba.blogspot.com
42. 42. Projectsformba.blogspot.com BONDS PORTFOLIO MANAGEMENT The
individual investors can invest in bond portfolio. The portfolio can be spared over
variety of securities. Investment in bond is less risky and safe as compared to equity
investment. However, the return on bond is very low. There are no much
fluctuations in bond prices. Therefore, there is no capital appreciation in this case.
Some bonds are tax saving which help the investor to reduce his tax liability. There is
no much liquidity in bonds, investment in bond portfolio is less risky and safe but, return
is reasonable, low liquidity and tax saving are some of the more important features of
bond portfolio investment. However, it is suitable for normal investors for getting
average return over their investment. Bond portfolio includes different types of bond,
tax free bonds and taxable bonds.Projectsformba.blogspot.com
43. 43. Projectsformba.blogspot.com Tax free bonds are issued by public sector
undertaking or Government on which interest s compounded half yearly and payable
accordingly. They have a maturity of 7 to 10 years with the facility for buyback. The
tax free bonds means the interest income on these bonds is not taxable. Therefore, the
interest rates on these bonds are very low. However, taxable bonds yield higher interest
compounded half yearly and also payable half yearly. They also have buy back
facilities similar to taxable bonds.Projectsformba.blogspot.com
44. 44. Projectsformba.blogspot.com ADVANTAGES OF PORTFOLIO MANAGEMENT
Individuals will benefits immensely by taking portfolio management services for the
following reason: - a) Whatever may be the status of the capital market; over the long
period capital markets have given an excellent return when compared to other forms of
investment. The return from bank deposits, units etc., is much less than from stock
market. b) The Indian stock markets are very complicated. Though there are thousands of
companies that are listed only a few hundred, which have the necessary liquidity. It is
impossible for any individual whishing to invest and sit down and analyses all these
intricacies of the market unless he does nothing else. c) Even if an investor is able to
visualize the market, it is difficult to investor to trade in all the major exchanges of India,
look after his deliveries and payments. This is further complicated by
theProjectsformba.blogspot.com
45. 45. Projectsformba.blogspot.com volatile nature of our markets, which demands constant
reshuffling of portProjectsformba.blogspot.com
46. 46. Projectsformba.blogspot.com IMPORTANCE OF PORTFOLIO MANAGEMENT
In the past one-decade, significant changes have taken place in the investment climate in
India. Portfolio management is becoming a rapidly growing area serving a broad array
of investors- both individual and institutional-with investment portfolios ranging in asset
size from thousands to cores of rupees. It is becoming important because of: i.
Emergence of institutional investing on behalf of individuals. A number of financial
institutions, mutual funds, and other agencies are undertaking the task of investing money
of small investors, on their behalf. ii. Growth in the number and the size of invisible
fundsa large part of household savings is being directed towards financial assets. iii.
Increased market volatility- risk and return parameters of financial assets are
continuously changing because of frequent changes in governments industrial and fiscal
policies, economic uncertainty and instability. iv. Greater use of computers for processing
mass of data.Projectsformba.blogspot.com
47. 47. Projectsformba.blogspot.com v. Professionalization of the field and increase use of
analytical methods (e.g. quantitative techniques) in the investment decision-making, and
vi. Larger direct and indirect costs of errors or shortfalls in meeting portfolio objectives-
increased competition and greater scrutiny by investors.Projectsformba.blogspot.com
48. 48. Projectsformba.blogspot.com QUALITIES OF PORTFOLIO MANAGER 1. Sound
general knowledge: Portfolio management is an existing and challenging job. He has
to work in an extremely uncertain and conflicting environment. In the stock market
every new piece of information affects the value of the securities of different industries in
a different way. He must be able to judge and predict the effects of the information he
gets. He must have sharp memory, alertness, fast intuition and self-confidence to arrive
at quick decisions. 2. Analytical Ability: He must have his own theory to arrive at the
value of the security. An analysis of the securitys values, company, etc. is continues
job of the portfolio manager. A good analyst makes a good financial consultant. The
analyst can know the strengths, weakness, opportunities of the economy, industry and the
company.Projectsformba.blogspot.com
49. 49. Projectsformba.blogspot.com 3. Marketing skills: He must be good salesman. He
has to convince the clients about the particular security. He has to compete with the
Stock brokers in the stock market. In this Marketing skills help him a lot. 4.
Experience: In the cyclical behavior of the stock market history is often repeated,
 therefore the experience of the different phases helps to make rational decisions. The
experience of different types of securities, clients, markets trends etc. makes a perfect
professional manager.Projectsformba.blogspot.com
50. 50. Projectsformba.blogspot.com CODE OF CONDUCT- PORTFOLIO MANAGERS:
1. A portfolio manager shall, in the conduct of his business, observe high standards of
integrity and fairness in all his dealings with his clients and other portfolio managers. 2.
The money received by a portfolio manager from a client for an investment purpose
should be deployed by the portfolio manager as soon as possible for that purpose and
money due and payable to a client should be paid forthwith. 3. A portfolio manager shall
render at all time high standards of services exercise due diligence, ensure proper care
and exercise independent professional judgment. The portfolio manager shall either avoid
any conflict of interest in his investment or disinvestments decision, or where any conflict
of interest arises; ensure fair treatment to all his customers. He shall disclose to the
clients, possible sources of conflict of duties and interest, while providing unbiased
services. A portfolio manager shall not place his interest above those of his clients. 4. A
portfolio manager shall not make any statement or become privy to any act, practice or
unfair competition, which is likely to be harmful to the interests of other portfolio
managers or it likely to place such other portfolio managers in a
disadvantageousProjectsformba.blogspot.com
51. 51. Projectsformba.blogspot.com position in relation to the portfolio manager himself,
while competing for or executing any assignment. 5. A portfolio manager shall not make
any exaggerated statement, whether oral or written, to the client either about the
qualification or the capability to render certain services or his achievements in regard to
services rendered to other clients. 6. At the time of entering into a contract, the portfolio
manager shall obtain in writing from the client, his interest in various corporate bodies,
which enables him to obtain unpublished price-sensitive information of the body
corporate. 7. A portfolio manager shall not disclose to any clients or press any
confidential information about his clients, which has come to his knowledge. 8. The
portfolio manager shall where necessary and in the interest of the client take adequate
steps for registration of the transfer of the clients securities and for claiming and
receiving dividend, interest payment and other rights accruing to the client. He shall also
take necessary action for conversion of securities and subscription of/or rights in
accordance with the clients instruction. 9. Portfolio manager shall ensure that the
investors are provided with true and adequate information without making
anyProjectsformba.blogspot.com
52. 52. Projectsformba.blogspot.com misguiding or exaggerated claims and are made aware
of attendant risks before they take any investment decision. 10.He should render the best
possible advice to the client having regard to the clients needs and the environment, and
his own professional skills. 11.Ensure that all professional dealings are affected in a
prompt, efficient and cost effective manner.Projectsformba.blogspot.com
53. 53. Projectsformba.blogspot.com FACTORS AFFECTING THE INVESTORThere may
be many reasons why the portfolio of an investor mayhave to be changed. The portfolio
manager always remains alert andsensitive to the changes in the requirements of the
investor. Thefollowing are the some factors affecting the investor, which make
itnecessary to change the portfolio composition. 1. Change in Wealth According to the
utility theory, the risk taking ability of the investor increases with increase in wealth. It
 says that people can afford to take more risk as they grow rich and benefit from its
reward. But, in practice, while they can afford, they may not be willing. As people
get rich, they become more concerned about losing the newly got riches than getting
richer. So they may become conservative and vary risk- averse. The fund manager
should observe the changes in the attitude of the investor towards risk and try to
understand them in proper perspective. If the investor turns to be conservative after
making huge gains, the portfolio manager should modify the portfolio
accordingly.Projectsformba.blogspot.com
54. 54. Projectsformba.blogspot.com 2. Change in the Time Horizon As time passes, some
events take place that may have an impact on the time horizon of the investor. Births,
deaths, marriages, and divorces all have their own impact on the investment horizon.
There are, of course, many other important events in the persons life that may force a
change in the investment horizon. The happening or the non-happening of the events
will naturally have its effect. For example, a person may have planned for an early
retirement, considering his delicate health. But, after turning 55 years of age, if his
health improves, he may not take retirement. 3. Change in Liquidity Needs Investors
very often ask the portfolio manager to keep enough scope in the portfolio to get some
cash as and they want. This forces portfolio manager to increase the weight of liquid
investments in the asset mix. Due to this, the amounts available for investment in the
fixed income or growth securities that actually help in achieving the goal of the investor
get reduced.Projectsformba.blogspot.com
55. 55. Projectsformba.blogspot.com That is, the money taken out today from the portfolio
means that the amount and the return that would have been earned on it are no longer
available for achievement of the investors goals. 4. Changes in Taxes It is said that
there are only two things certain in this world- death and taxes. The only uncertainties
regarding them relate to the date, time, place and mode. Portfolio manager have to
constantly look out for changes in the tax structure and make suitable changes in the
portfolio composition. The rate of tax under long- term capital gains is usually lower
than the rate applicable for income. If there is a change in the minimum holding period
for long-term capital gains, it may lead to revision. The specifics of the planning depend
on the nature of the investments. 5. Others There can be many of other reasons for
which clients may ask for a change in the asset mix in the portfolio. For example, there
may be change in the return available on the investments that have to be compulsorily
made with the government say, in the form of provident
fund.Projectsformba.blogspot.com
56. 56. Projectsformba.blogspot.com This may call for a change in the return required
from the other investments.Projectsformba.blogspot.com
57. 57. Projectsformba.blogspot.comPORTFOLIO MANAGEMENT SCHEMES (PMS)
PRESENT SCENARIO The regulatory environment has totally changed now and with
SEBI fixing strict norms for companies launching PMS, only the serious players are
going to enter his business. The PMS members today have full transparency: managers
are required to maintain individual accounts showing all dealings in a clients portfolio.
They must also advise him on all transactions. Secondly, all PMS Managers have to
send their clients at least a quarterly report giving the status of their portfolio and the
transactions that have taken place. The client-PMS manager contract is as per SEBI
 ground rules. It has several checks to protect investors interest like laying the custodial
responsibility on the manager and preventing any alterations in the scheme without the
clients consent. Finally, managers have to send half-yearly reports to SEBI on their
portfolio management activities. Experienced handling of cash and money power apart,
PMS also takes care of a number of the headaches endemic with investing in the markets.
The biggest one is custodial services.Projectsformba.blogspot.com
58. 58. Projectsformba.blogspot.com All PMS Managers act as custodians of shares and are
responsible for the load of paper work related to the share transfer, documentation work,
postal work and even ensuring that dividends are credited to clients account. SEBI
directives also put the onus on the PMS promoters to take follow-up action in case shares
are lost or damaged. Difficulties such as late transfer and postal theft are reduced in case
of brokers, because they not only have direct access to registrars but also have branch
offices to ensure quicker transfers. All these services come for a fee, of course. While
the actual PMS charges vary from a high of 7% of the amount invested to a low of around
3.5%, follow-up services charges extra. As in all schemes, there is a downside to putting
cash into portfolio management as well. The most important is the fact that despite all
the SEBI checks. PMS Managers are not allowed to assured any fixed returns. This
really discharges the managers for any responsibility if the scheme does badly. So
investors have to be very careful in choosing the promoters. Problem inherent in most
schemes on offer will be misused of investors funds to some
extent.Projectsformba.blogspot.com
59. 59. Projectsformba.blogspot.com Funds collected from investors will aid the brokers
concerned in their own games in the market.Projectsformba.blogspot.com
60. 60. Projectsformba.blogspot.com PROSPECTS OF POTFOLIO MANAGEMENT At
present, there are a very few agencies which render this type of services in an organized
and professional way. However, their share in the total volume is very small. There
is no constraint on the demand for this type of financial service as every entity would be
saving and investing and interested in optimizing the rate of return. The size of capital
market is increasing. There is an increase in the number of stock exchanges. New
instruments are being introduced in the capital market. The equity cult is spreading in
the interiors and rural areas. The percentage of investment of the household savings is
bound to go up. It is conservatively estimated that during the eighth plan resources to
the tune of over Rs.50000crore will be mobilized through the stock market. India
today has 20 million investors, as compared to 2 million in 1980.
.Projectsformba.blogspot.com
61. 61. Projectsformba.blogspot.comSECURITIES AND EXCHANGE BOARD OF INDIA
RULES, 1993 REGARDING PORTFOLIO MANAGERS No person to act as
portfolio manager without certificate. No person shall carry on any activity as a
portfolio manager unless he holds a certificate granted by the Board under this regulation.
Provided that such person, who was engaged as portfolio manager prior to the coming
into force of the Act, may continue to carry on activity as portfolio manager, if he has
made an application for such registration, till the disposal of such application. Provided
further that nothing contained in this rule shall apply in case of merchant banker holding
a certificate granted by the board of India Regulations, 1992 as category I or category II
merchant banker, as the case may be. Provided also that a merchant banker acting as a
 portfolio manager under the second provision to this rule shall also be bound by the rules
and regulations applicable to a portfolio manager.Projectsformba.blogspot.com
62. 62. Projectsformba.blogspot.com Conditions for grant or renewal of certificate to
portfolio manager. The board may grant or renew certificate to portfolio manager
subject to the following conditions namely: a) The portfolio manager in case of any
change in its status and constitution, shall obtain prior permission of the board to carry on
its activities; b) He shall pay the amount of fees for registration or renewal, as the case
may be, in the manner provided in the regulations; c) He shall make adequate steps for
redressed of grievances of the clients within one month of the date of receipt of the
complaint and keep the board informed about the number, nature and other particulars of
the complaints received; d) He shall abide by the rules and regulations made under the
Act in respect of the activities carried on by the portfolio manager. Period of validity
of the certificate. The certificate of registration on its renewal, as the case may be, shall
be valid for a period of here years from the date of its issue to the portfolio
manager.Projectsformba.blogspot.com
63. 63. Projectsformba.blogspot.com SECURITIES AND EXCHANGE BOARD OF INDIA
REGULATIONS, 1993 Registration of Portfolio Managers: 1. Application for grant of
certificate An application by a portfolio manager for grant of a certificate shall be
made to the board on Form A. Notwithstanding anything contained in sub regulation
(1), any application made by a portfolio manager prior to coming into force of these
regulations containing such particulars or as near thereto as mentioned in form A shall be
treated as an application made in pursuance of sub-regulation and dealt with accordingly.
2. Application of confirm to the requirements Subject to the provisions of sub-
regulation (2) of regulation 3, any application, which is not complete in all respects and
does not confirm to the instructions specified in the form, shall be rejected: Provided
that, before rejecting any such application, the applicant shall be given an opportunity to
remove within theProjectsformba.blogspot.com
64. 64. Projectsformba.blogspot.com time specified such objections as may be indicated by
the board. 3. Furnishing of further information, clarification and personal representation.
The Board may require the applicant to furnish further information or clarification
regarding matters relevant to his activity of a portfolio manager for the purposes of
disposal of the application. The applicant or, its principal officer shall, if so required,
appear before the Board for personal representation. 4. Consideration of application.
The Board shall take into account for considering the grant of certificate, all matters
which are relevant to the activities relating to portfolio manager and in particular whether
the applicant complies with the following requirements namely: The applicant has the
necessary infrastructure like to adequate office space, equipments and manpower to
effectively discharge his activities; The applicant has his employment minimum of two
persons who have the experience to conduct the business of portfolio
manager;Projectsformba.blogspot.com
65. 65. Projectsformba.blogspot.com A person, directly or indirectly connected with the
applicant has not been granted registration by the Board in case of the applicant being a
body corporate; The applicant, fulfils the capital adequacy requirements specified in
regulation 7 The applicant, his partner, director or principal officer is not involved in
any litigation connected with the securities market and which has an adverse bearing on
 the business of the applicant; The applicant, his director, partner or principal officer
has not at any time been convinced for any offence involving moral turpitude or has been
found guilty of any economic offences; The applicant has the professional qualification
from an institution recognized by the government in finance, law, and accountancy or
business management.Projectsformba.blogspot.com
66. 66. Projectsformba.blogspot.com PRIMARY SURVEY Purpose of the study: To
ascertain investor awareness about services provided by portfolio management
institutions and the interest shown by investor to invest in portfolio management services.
To know whether they are interested to hire such services in future and if not,
why?Projectsformba.blogspot.com
67. 67. Projectsformba.blogspot.com SPECIMEN QUESTIONNAIRESurvey on investors
views about Portfolio Management Name: Age: Occupation: Are you aware of services
offered by portfolio manager? Yes No If yes, what types of services you are aware of ?
Management of Mutual fund investment Management of Equities Management of Money
market investmentProjectsformba.blogspot.com
68. 68. Projectsformba.blogspot.com Advisory or consultancy services Others (If other
please specify) Would you want to hire a portfolio manager at present or in future? Yes
No If yes, for what type of services? Investments in Mutual Funds Investments in
Equities Investments in Money market Investments in other[s] (If other please specify)
Advisory or consultancy service If No, why?
__________________________________________________
__________________________________________________ What is the Percentage
of commission that you are ready to pay to portfolio manager for services provided by
him in ? Equities Money market investmentProjectsformba.blogspot.com
69. 69. Projectsformba.blogspot.com Mutual fund investment Advisory or consultancy
services Other investment (If other please specify) Do you think there will be growth in
portfolio management in future? If Yes why? If No, why? What type of services would
you want from portfolio manager in future?
__________________________________________________
__________________________________________________ Suggestions if any:
__________________________________________________
__________________________________________________
__________________________________________________
____________Projectsformba.blogspot.com
70. 70. Projectsformba.blogspot.com SignatureProjectsformba.blogspot.com
71. 71. Projectsformba.blogspot.com FINDINGSThis case study has been conducted on
various age groups ofindividual investors on portfolio management. These consist of
agegroup ranging from 18-30, 30-45, 45-60 and 60 & above. Followinginterpretation has
been made on the basis of the informationcollected from individual investors of various
age groups throughquestionnaire: Age group of 18-30 is more aware about services
offered by portfolio manager whereas age group of 60 & above is less aware of such
services. Management of mutual fund investment, management of equities,
management of money market investment, advisory and consultancy services are the
services provided by the portfolio management institution. Amongst these, advisory and
consultancy services are the services that the individual investors are more aware of.
Due to lack of experience and market knowledge, the age group of 45-60 is more
 interested to hire portfolio manager at present in order to manage their portfolio. The age
group ranging from 18-30 is more interested in making investment in equities whereas
group ranging from 60 & above are more interested in making investment in mutual fund.
On the otherProjectsformba.blogspot.com
72. 72. Projectsformba.blogspot.com hand, age group of 30-45 and 45-60 are least interested
in any of the services provided by portfolio management institution. Reasons specified
for the presence of disinterest in any of these services were that the investors are having
good hold on their investment. Also they possess good knowledge with regards to market
fluctuations, investment portfolios and other factors relating to portfolio management.
All the age groups of individual investors in portfolio management believe that there is a
better scope for portfolio management in future. Investors would prefer the introduction
of services like advisory and consultancy services, investment in mutual funds in the near
future.Projectsformba.blogspot.com
73. 73. Projectsformba.blogspot.com CONCLUSIONWith the help of given project I got an
in-depth knowledge about theworking of portfolio management. Also I got an insight as
too how toinvest in portfolio management, which scheme provide better returnas
compared to other and who are the portfolio management playersin the Indian market.It
can be concluded from the project that future of portfoliomanagement is bright provided
proper regulations prevail andinvestors needs are satisfied by providing variety of
schemes. Theinterest of investors is protected by SEBI. Portfolio management isgoverned
by SEBI Act.Due to the benefits available to the individuals such as reduction inrisk,
expert professional management, diversified portfolios, taxbenefits etc. young generation
(i.e. age group bet. 18-30) is willing toinvest in different investment avenues through
portfolio manager orthrough mutual funds which are again managed by
portfoliomanagers. On the other hand, age group of 60 & above are leastinterested in
making investment in different avenues through portfolioProjectsformba.blogspot.com
74. 74. Projectsformba.blogspot.commanagers. They believe in investing and managing their
portfolio ontheir own.However, it can be said that the future of portfolio management
isbright in years to come.Projectsformba.blogspot.com
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