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Submitted in partial fulfillment of requirement of Bachelor of

Commerce (Hons.)


BATCH 2017-2020

Submitted to: Submitted by:

Name of guide: Shweta Khandelwal Name of student: Kanishka Ahuja
Designation Enrollment no.35414188817


A lot of effort has gone into this training report. My thanks are due to many people with
whom I have been closely associated.

I would like all those who have contributed in completing this project. First of all, I

would like to send my sincere thanks to SHWETA KHANDELWAL for his helpful hand

in the completion of my project.


Description Page No.

Contents with page no.
List of tables
List of figures
List of symbols, Abbreviations or Nomenclature (optional)
Executive Summary
Certificate of completion
Introduction to topic
Literature review
Company Profile
Research Methodology
Analysis & Interpretation
Findings & Inferences
Recommendations and Conclusion
LIST OF TABLES Table title Page No.
1 Industry overall growth
2 Company Details
3 Research Report

Investment may be defined as an activity that commits funds in any financial form in the
present with an expectation of receiving additional return in the future. The expectations
bring with it a probability that the quantum of return may vary from a minimum to a
maximum. This possibility of variation in the actual return is known as investment risk.
Thus every investment involves a return and risk.
Investment is an activity that is undertaken by those who have savings. Savings can be
defined as the excess of income over expenditure. An investor earns/expects to earn
additional monetary value from the mode of investment that could be in the form of
financial assets.
 The three important characteristics of any financial asset are: Return-the potential
return possible from an asset.

 Risk-the variability in returns of the asset form the chances of its value going

 Liquidity-the ease with which an asset can be converted into cash.

Investors tend to look at these three characteristics while deciding on their individual
preference pattern of investments. Each financial asset will have a certain level of each of
these characteristics.
Investment avenues
There are a large number of investment avenues for savers in India. Some of them are
marketable and liquid, while others are non-marketable. Some of them are highly risky
while some others are almost risk less.
Investment avenues can be broadly categorized under the following head.

1. Corporate securities

2. Equity shares.

3. Preference shares.

4. Debentures/Bonds.

5. Derivatives.
6. Others.

Corporate Securities
Joint stock companies in the private sector issue corporate securities. These include
equity shares, preference shares, and debentures. Equity shares have variable dividend
and hence belong to the high risk-high return category; preference shares and debentures
have fixed returns with lower risk. The classification of corporate securities that can be
chosen as investment avenues can be depicted as shown below:

Equity Preference Bonds Warrants Derivatives

Shares shares


A portfolio is a collection of assets. The assets may be physical or financial like Shares, Bonds,
Debentures, Preference Shares, etc. The individual investor or a fund manager would not like to
put all his money in the shares of one company that would amount to great risk. He would
therefore, follow the age old maxim that one should not put all the eggs into one basket. By
doing so, he can achieve objective 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 management is a decision – support system that is designed with a view to meet
the multi-faced needs of investors.
 According to Securities and Exchange Board of India Portfolio Manager is defined as:
“portfolio means the total holdings of securities belonging to any person”.
 PORTFOLIO MANAGER means any person who pursuant to a contract or arrangement
with a client, advises or directs or undertakes on behalf of the client (whether as a
discretionary portfolio manager or otherwise) the management or administration of a
portfolio of securities or the funds of the client.
 DISCRETIONARY PORTFOLIO MANAGER means a portfolio manager who
exercises or may, under a contract relating to portfolio management exercises any degree
of discretion as to the investments or management of the portfolio of securities or the
funds of the client.

 To frame the investment strategy and select an investment mix to achieve the desired
investment objectives
 To provide a balanced portfolio which not only can hedge against the inflation but can
also optimize returns with the associated degree of risk
 To make timely buying and selling of securities
 To maximize the after-tax return by investing in various tax saving investment
In the small firm, the portfolio manager performs the job of security analyst.
In the case of medium and large sized organizations, job function of portfolio manager and
security analyst are separate.

(E.g. Security (E.g. buying and
Analysis) Selling of securities)



Individuals will benefit immensely by taking portfolio management services for the following
 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 the stock market.
 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. Even
among these, only some have the growth prospects which are conducive for investment.
It is impossible for any individual wishing to invest and sit down and analyze all these
intricacies of the market unless he does nothing else.
 Even if an investor is able to understand the intricacies of the market and separate chaff
from the grain the trading practices in India are so complicated that it is really a difficult
task for an investor to trade in all the major exchanges of India, look after his deliveries
and payments. This is further complicated by the volatile nature of our markets which
demands constant reshuffling of portfolios.



In this type of service, the client parts with his money in favour of the manager, who in return,
handles all the paper work, makes all the decisions and gives a good return on the investment and
charges fees. In the Discretionary Portfolio Management Service, to maximize the yield, almost
all portfolio managers park the funds in the money market securities such as overnight market,
18 days treasury bills and 90 days commercial bills. Normally, the return of such investment
varies from 14 to 18 percent, depending on the call money rates prevailing at the time of


The manager functions as a counselor, but the investor is free to accept or reject the manager‘s
advice; the paper work is also undertaken by manager for a service charge. The manager
concentrates on stock market instruments with a portfolio tailor-made to the risk taking ability of
the investor.

 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.
 Growth in the number and size of investible funds – a large part of household savings is
being directed towards financial assets.
 Increased market volatility – risk and return parameters of financial assets are
continuously changing because of frequent changes in government‘s industrial and fiscal
policies, economic uncertainty and instability.
 Greater use of computers for processing mass of data.
 Professionalization of the field and increasing use of analytical methods (e.g. quantitative
techniques) in the investment decision – making
 Larger direct and indirect costs of errors or shortfalls in meeting portfolio objectives –
increased competition and greater scrutiny by investors.


 Specification and qualification of investor objectives, constraints, and preferences in the

form of an investment policy statement.
 Determination and qualification of capital market expectations for the economy, market
sectors, industries and individual securities.
 Allocation of assets and determination of appropriate portfolio strategies for each asset
class and selection of individual securities.
 Performance measurement and evaluation to ensure attainment of investor objectives.
 Monitoring portfolio factors and responding to changes in investor objectives, constrains
and / or capital market expectations.
 Rebalancing the portfolio when necessary by repeating the asset allocation, portfolio
strategy and security selection.

 In portfolio management emphasis is put on identifying the collective importance of all

investors’ holdings. The emphasis shifts from individual assets selection to a more
balanced emphasis on diversification and risk-return interrelationships of individual
assets within the portfolio. Individual securities are important only to the extent they
affect the aggregate portfolio. In short, all decisions should focus on the impact which the
decision will have on the aggregate portfolio of all the assets held.

 Portfolio strategy should be moulded to the unique needs and characteristics of the
portfolio‘s owner.
 Diversification across securities will reduce a portfolio‘s risk. If the risk and return are
lower than the desired level, leverages (borrowing) can be used to achieve the desired

 Larger portfolio returns come only with larger portfolio risk. The most important decision
to make is the amount of risk which is acceptable.

 The risk associated with a security type depends on when the investment will be
liquidated. Risk is reduced by selecting securities with a payoff close to when the
portfolio is to be liquidated.

 Competition for abnormal returns is extensive, so one has to be careful in evaluating the
risk and return from securities. Imbalances do not last long and one has to act fast to
profit from exceptional opportunities.

1. SOUND GENERAL KNOWLEDGE: Portfolio management is an exciting and challenging

job. He has to work in an extremely uncertain and confliction 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 intrinsic value of the
security. An analysis of the security‘s values, company, etc. is s continuous job of the portfolio
manager. A good analyst makes a good financial consultant. The analyst can know the strengths,
weaknesses, opportunities of the economy, industry and the company.

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
context, the 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 the
different types of securities, clients, market trends, etc., makes a perfect professional manager.


Portfolio decisions for an individual investor are influenced by a wide variety of factors.
Individuals differ greatly in their circumstances and therefore, a financial programme well suited
to one individual may be inappropriate for another. Ideally, an individual‘s portfolio should be
tailor-made to fit one‘s individual needs.
Investor‘s Characteristics:

An analysis of an individual‘s investment situation requires a study of personal characteristics

such as age, health conditions, personal habits, family responsibilities, business or professional
situation, and tax status, all of which affect the investor‘s willingness to assume risk.

Stage in the Life Cycle:

One of the most important factors affecting the individual‘s investment objective is his stage in
the life cycle. A young person may put greater emphasis on growth and lesser emphasis on
liquidity. He can afford to wait for realization of capital gains as his time horizon is large.
Family responsibilities:

The investor‘s marital status and his responsibilities towards other members of the family can
have a large impact on his investment needs and goals.

Investor‘s experience:

The success of portfolio depends upon the investor‘s knowledge and experience in financial
matters. If an investor has an aptitude for financial affairs, he may wish to be more aggressive in
his investments.

Attitude towards Risk:

A person‘s psychological make-up and financial position dictate his ability to assume the risk.
Different kinds of securities have different kinds of risks. The higher the risk, the greater the
opportunity for higher gain or loss.

Liquidity Needs:

Liquidity needs vary considerably among individual investors. Investors with regular income
from other sources may not worry much about instantaneous liquidity, but individuals who
depend heavily upon investment for meeting their general or specific needs, must plan portfolio
to match their liquidity needs. Liquidity can be obtained in two ways:
1. by allocating an appropriate percentage of the portfolio to bank deposits, and
2. by requiring that bonds and equities purchased be highly marketable.

Tax considerations:

Since different individuals, depending upon their incomes, are subjected to different marginal
rates of taxes, tax considerations become most important factor in individual‘s portfolio strategy.
There are differing tax treatments for investment in various kinds of assets.

Time Horizon:

In investment planning, time horizon becomes an important consideration. It is highly variable

from individual to individual. Individuals in their young age have long time horizon for planning,
they can smooth out and absorb the ups and downs of risky combination. Individuals who are old
have smaller time horizon, they generally tend to avoid volatile portfolios.

Individual‘s Financial Objectives:

In the initial stages, the primary objective of an individual could be to accumulate wealth via
regular monthly savings and have an investment programme to achieve long term capital gains.

Safety of Principal:

The protection of the rupee value of the investment is of prime importance to most investors.
The original investment can be recovered only if the security can be readily sold in the market
without much loss of value.

Assurance of Income:

`Different investors have different current income needs. If an individual is dependent of its
investment income for current consumption then income received now in the form of dividend
and interest payments become primary objective.
Investment Risk:

All investment decisions revolve around the trade-off between risk and return. All rational
investors want a substantial return from their investment. An ability to understand, measure and
properly manage investment risk is fundamental to any intelligent investor or a speculator.
Frequently, the risk associated with security investment is ignored and only the rewards are
emphasized. An investor who does not fully appreciate the risks in security investments will find
it difficult to obtain continuing positive results.


There is a positive relationship between the amount of risk and the amount of expected return
i.e., the greater the risk, the larger the expected return and larger the chances of substantial loss.
One of the most difficult problems for an investor is to estimate the highest level of risk he is
able to assume.




 Risk is measured along the horizontal ICICI and increases from the left to right.
 Expected rate of return is measured on the vertical ICICI and rises from bottom to top.
 The line from 0 to R (f) is called the rate of return or risk less investments commonly
associated with the yield on government securities.
 The diagonal line form R (f) to E(r) illustrates the concept of expected rate of return
increasing as level of risk increases.


Risk consists of two components. They are

1. Systematic Risk
2. Un-systematic Risk

1. Systematic Risk:

Systematic risk is caused by factors external to the particular company and uncontrollable by the
company. The systematic risk affects the market as a whole. Factors affect the systematic risk are
 economic conditions
 political conditions
 sociological changes
The systematic risk is unavoidable. Systematic risk is further sub-divided into three types. They
a) Market Risk
b) Interest Rate Risk
c) Purchasing Power Risk

a). Market Risk:

One would notice that when the stock market surges up, most stocks post higher price. On the
other hand, when the market falls sharply, most common stocks will drop. It is not uncommon to
find stock prices falling from time to time while a company‘s earnings are rising and vice-versa.
The price of stock may fluctuate widely within a short time even though earnings remain
unchanged or relatively stable.

b). Interest Rate Risk:

Interest rate risk is the risk of loss of principal brought about the changes in the interest rate paid
on new securities currently being issued.
c). Purchasing Power Risk:

The typical investor seeks an investment which will give him current income and / or capital
appreciation in addition to his original investment.
2. Un-systematic Risk:

Un-systematic risk is unique and peculiar to a firm or an industry. The nature and mode of
raising finance and paying back the loans, involve the risk element. Financial leverage of the
companies that is debt-equity portion of the companies differs from each other. All these factors
Factors affect the un-systematic risk and contribute a portion in the total variability of the return.
 Managerial inefficiently
 Technological change in the production process
 Availability of raw materials
 Changes in the consumer preference
 Labour problems

The nature and magnitude of the above mentioned factors differ from industry to industry and
company to company. They have to be analyzed separately for each industry and firm. Un-
systematic risk can be broadly classified into:
a) Business Risk
b) Financial Risk

a. Business Risk:

Business risk is that portion of the unsystematic risk caused by the operating environment of the
business. Business risk arises from the inability of a firm to maintain its competitive edge and
growth or stability of the earnings. The volatibility in stock prices due to factors intrinsic to the
company itself is known as Business risk. Business risk is concerned with the difference between
revenue and earnings before interest and tax. Business risk can be divided into.
i). Internal Business Risk
Internal business risk is associated with the operational efficiency of the firm. The operational
efficiency differs from company to company. The efficiency of operation is reflected on the
company‘s achievement of its pre-set goals and the fulfillment of the promises to its investors.
ii).External Business Risk
External business risk is the result of operating conditions imposed on the firm by circumstances
beyond its control. The external environments in which it operates exert some pressure on the
firm. The external factors are social and regulatory factors, monetary and fiscal policies of the
government, business cycle and the general economic environment within which a firm or an
industry operates.

b. Financial Risk:

It refers to the variability of the income to the equity capital due to the debt capital. Financial
risk in a company is associated with the capital structure of the company. Capital structure of the
company consists of equity funds and borrowed funds.
PROFESSIONAL FUND MANAGERS ARE often judged by their ex post excess returns
relative to a prescribed benchmark, which is usually a broadly diversified index of
securities. Most money managers adopt an optimal strategy that maximizes an expected
excess return adjusted by the tracking error relative to the benchmark; see Roll (1992).
This is a sensible investment approach because fund sponsors wisely expect their
investment portfolios to maintain a performance level that is close to a desired
ICICI Bank is India's second-largest bank with total assets of about Rs.1,67,659 crore at
March 31, 2005 and profit after tax of Rs. 2,005 crore for the year ended March 31, 2005
(Rs. 1,637 crore in fiscal 2004). ICICI Bank has a network of about 560 branches and
extension counters and over 1,900 ATMs. ICICI Bank offers a wide range of banking
products and financial services to corporate and retail customers through a variety of
delivery channels and through its specialized subsidiaries and affiliates in the areas of
investment banking, life and non-life insurance, venture capital and asset management.
ICICI Bank set up its international banking group in fiscal 2002 to cater to the cross
border needs of clients and leverage on its domestic banking strengths to offer products
internationally. ICICI Bank currently has subsidiaries in the United Kingdom and
Canada, branches in Singapore and Bahrain and representative offices in the United
States, China, United Arab Emirates, Bangladesh and South Africa. ICICI Bank's equity
shares are listed in India on the Stock Exchange, Mumbai and the National Stock
Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on
the New York Stock Exchange (NYSE).
As required by the stock exchanges, ICICI Bank has formulated a Code of Business
Conduct and Ethics for its directors and employees. At April 4, 2005, ICICI Bank, with
free float market capitalization of about Rs. 308.00 billion (US$ 7.00 billion) ranked third
amongst all the companies listed on the Indian stock exchanges.

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial
institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was
reduced to 46% through a public offering of shares in India in fiscal 1998, an equity
offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition
of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary
market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was
formed in 1955 at the initiative of the World Bank, the Government of India and
representatives of Indian industry. The principal objective was to create a development
financial institution for providing medium-term and long-term project financing to Indian
businesses. In the 1990s, ICICI transformed its business from a development financial
institution offering only project finance to a diversified financial services group offering a
wide variety of products and services, both directly and through a number of subsidiaries
and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the
first bank or financial institution from non-Japan Asia to be listed on the NYSE.

After consideration of various corporate structuring alternatives in the context of the

emerging competitive scenario in the Indian banking industry, and the move towards
universal banking, the managements of ICICI and ICICI Bank formed the view that the
merger of ICICI with ICICI Bank would be the optimal strategic alternative for both
entities, and would create the optimal legal structure for the ICICI group's universal
banking strategy. The merger would enhance value for ICICI shareholders through the
merged entity's access to low-cost deposits, greater opportunities for earning fee-based
income and the ability to participate in the payments system and provide transaction-
banking services. The merger would enhance value for ICICI Bank shareholders through
a large capital base and scale of operations, seamless access to ICICI's strong corporate
relationships built up over five decades, entry into new business segments, higher market
share in various business segments, particularly fee-based services, and access to the vast
talent pool of ICICI and its subsidiaries. In October 2001, the Boards of Directors of
ICICI and ICICI Bank approved the merger of ICICI and two of its wholly-owned retail
finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital
Services Limited, with ICICI Bank. The merger was approved by shareholders of ICICI
and ICICI Bank in January 2002, by the High Court of Gujarat at Ahmedabad in March
2002, and by the High Court of Judicature at Mumbai and the Reserve Bank of India in
April 2002. Consequent to the merger, the ICICI group's financing and banking
operations, both wholesale and retail, have been integrated in a single entity.

Above all, the major function of ICICI is to provide wealth management services to its
cutomers. ICICI provides Wealth Management Services to its customers in the form of
Personal Financial Services, whereby the bank assists Individuals who may not have the
expertise or the time to plan their finances optimally. The process involves understanding
the needs of the customer and his financial goals. This is made possible with the help of a
Personal Financial Review process which is unique to ICICI and is done for all Premier
Customers. After this, the customer is suggested an investment plan and prescribed
various investment options and products suited to him with the expert assistance of a
Relationship Manager. Thereafter, the customer’s consent is taken and the investments
are executed accordingly. The Wealth Management Service imparted is a continuous
process, and every customer is encouraged to review his Financials at regular intervals in
order to advise him changes in his investment portfolio if required.
Personal Financial Review

Customer Infrmation Analysis Financial Planning Risk Profiling

Establishment of Investment Plan

R e c o m m e n d a ti o n o f P r o d u c t s

E x e c u ti o n o f I n v e s t m e n t s

Periodic Review and Diagnosis



Personal Financial Review: At ICICI, Wealth Management starts with the Personal
Financial Review of the customer, which is a process unique to the bank. It involves a
standardized method which has to be followed by the Relationship officers. The initial
process involves the Personal Financial Review of the customer (PFR). It is the first step
in the process of Wealth Management. This procedure helps the advisor to gain an in
depth and thorough knowledge of the present financial condition of the customers as well
as his future financial goals each having their own time and sequence of occurring.
Personal financial review of an investor’s wealth is very important as his financial
situation keep on changing and there has to be a strategic approach adopted, so as to give
the best possible results or expected results. Personal financial review contains various
set of questions which are required by the advisor to know about the investors. It has a
holistic approach and covers three areas of information about the customer which
includes the basic information, financial planning and risk profiling. The details of the
Personal Financial Review are as follows.

Basic Information

Financial Risk
Planning Profiling

Personal Financial Review


A market trade is the one that is settled through participation of a Clearing Corporation.
Once the broker on the stock exchange executes the trade, the seller gives a delivery
instruction to his DP to transfer securities to his broker’s account.

The broker has to then complete the pay in before the dead line prescribed by the stock
exchange. The broker removes securities from his account to CC/CH of the stock
exchange concerned, before the deadline given by the stock exchange.

The CC/CH gives the pay-out and securities are transferred to the buying broker’s
account. The broker then gives delivery instructions to his DP to transfer securities to the
buyer’s account.




Broker Broker

Seller Seller Buyer Buyer

Premier department deals with the high net worth customers who have the requirements
of the dematerialization. All these requirements are looked after by the DEMAT
department. They cater to the following requirements of the Premier Customers-:

Demat Account Opening-: The demat department at ICICI helps the Premier customers
to open a DEMAT Account. They answer several questions of the customers and provide
proper guidance. They are given personal attention and help in completing the account
opening formalities without difficulty-:

 Explain the information to be given in the application form, as in the, standing

instructions, introduction, nomination, Pan No. etc.
 Assure the client about the time by which the account will be opened and the
account no. to be communicated to him
 Handing over the “Delivery Instructions Book” with the pre-printed serial no. of
the slips stamped with Client ID.
 Explain about various other forms used in the depository system.

DEMAT Process-: DEMAT Department helps the Premier customer in ensuring if the
securities are available for the dematerialization. It helps the customers in filling the DRF
properly and sends the request to NSDL.

Trading and Settlement-: DEMAT department takes care while accepting and
processing requests for the transfer of the securities of the Premier customer to another
account. They keep in mind many things while making the transfers
 Inform the clients about the pay-in deadlines of the stock exchange and the
Deadlines of the DP.
 Inform the clients about the future dated instruction facility and encourage them
to use this facility.

General Demat Services-:

 ICICI Demat ensures timely issue of the transactions.

 Undertakes client master details whenever required and intimates the clients
 Provide latest list of the companies available for demat.
 Provides multiple channels to help the clients obtain answers to their questions
related to the accounts or to give instructions.
 Gives clients regular feedback on the status of instructions, especially the failed


The POWERVANTAGE department deals with the customers who have an over all
quarterly balance of Rs.100000 as a combination of deposits and loans with a minimum
of Rs.50000 deposits. OR who have a taken a home loan from ICICI OR to those
customers who have done a minimum investment of 500000 purchased through ICICI.


 A PowerVantage Relationship Manager to assist in banking and financial planning


 Personal Financial Review to evaluate the finances, identify the current and future
financial needs and assist in drawing up a plan to meet them

 Unlimited free transactions (cash withdrawals and balance enquiries) at 15,000

ICICI and non - ICICI Visa ATMs in India using PowerVantage debit card

 Dedicated Service Desk and Teller Counters to assist with banking needs.

 Higher cash withdrawal limit of up to Rs. 50,000 and funds transfer up to Rs.
100,000 with PowerVantage debit card, across 15,000 ICICI and non-ICICI Visa
ATMs in India and close to 1 million ATMs overseas

 PowerVantage debit card for purchases of upto Rs. 50,000 per day at over 250,000
merchant establishments in India and over 13 million such establishments

 Free Cheques Payable at Par (CPP) facility in all cities where ICICI has branches,
helping to save on out-station clearing time and costs

 No-bounce Cheque Protection which means cheques presented through clearing

irrespective of funds available, are honoured (overdrawing of a maximum of Rs.

 Monthly Composite Statement giving a snapshot of all deposits and loans

 Joining fee waiver and 50% off on the annual fee for credit card .

ICICI PREMIER is linked to PowerVantage in a way that all the Powervantage

customers can upgrade their accounts into Premier after filling up the PREMIER
upgrade form and filling up other forms required by the PREMIER department.
Moreover the PowerVantage Accounts are reviwed and those who fulfill the criteria
are approached to become the Premier customers.



The Audit Department is responsible for evaluating the effectiveness of the bank's risk
management, control, and governance activities, and for promoting their continuous


The Audit Department is committed to providing the bank with leading-edge,

professional internal audit services. The Department is organized into multi-disciplinary
teams that provide a full range of integrated internal audit services (e.g., financial,
operational, information technology). These internal audit services are performed across
all of the major functional elements of the bank.
What is the function of the Audit Department?

1) Monitor the integrity of the departments financial reporting processes and systems of
internal controls regarding internal financial reporting.

2) Review the department compliance with legal and regulatory requirements that may
have a material impact on the Bank’s financial set up.

3) To make sure that the Wealth Management procedure is correctly and fairly followed.
The investments made by the Relationship Managers on behalf of the customers are
strictly in accordance with the Risk Profile of the customers and The Personal Financial
Review. It also keeps a check, if any of the Relationship Managers are indulging in mis-
selling of financial products to the customers

How does it deal with Premier Department?

Each Premier employee has to adhere to certain guidelines/norms as stipulated by the
Audit Department. That is to check whether the set procedures have been followed. The
audit department does a random check on any of the Personal Financial Review from the
Relationship Managers database. The auditor checks on various parameters like if the RM
is working according to the risk appetite of the customer. He has to further check on the
money laundering factor. ICICI has categorized various countries where the financial risk
is high. There are A category listed and B category listed countries. Audit does not allow
those who are in the A category countries to become Premier Customers and those who
are in B category countries, their PFR’S have to be reviewed timely and carefully. The
auditor after going through the PFR’s sends discrepant if any, to the RM’s if he feels he is
not working according to the risk appetite of the customer or according to the norms of
the bank. Therefore all RM’s are accountable for the proper functioning of the Premier


ICICI launched Global Premier on 4th May, 2007. This was one of the Major events of the
year 2007 for ICICI Premier. Now ICICI Premier offers a truly global personal banking
service for its growing number of affluent customers all over the world. The new ICICI
Premier indigo branding represents a fresh approach to premium banking, attuned to the
changes in the needs and modern taste of the bank’s most valued customers. The ICICI
Premier logo has been redesigned to carry a contemporary look and feel. The main reason
for the change of ICICI Premier is that there are around 1.4 million affluent customers in
India according to the market estimates and another 22 million Non-Resident Indians.
Their numbers are growing and their needs are evolving .These customers are
increasingly internationally oriented, sophisticated and knowledgeable. ICICI Premier
has been designed to help them exploit opportunities locally and overseas to grow wealth.
Moreover with this increasing number of the customer, Premier found it to be
inconsistent in delivery proposition, relationship management and service experience was
identified as requiring resolution. Therefore in 2006 the Senior Group Executive agreed
to Global Re-launch at Q2 07 by naming the project as Project GP.

The Current Customer Perceptions-

 All the banks are providing similar services in a very similar tone and manner.
- Personalized banking services with a Relationship Manager
- Membership to exclusive club
- Privileges to a luxurious lifestyle
 Contrary to the banks expectations, many of the customers were not aware and
lacked understanding of Premium Banking and thought it to be not for them.

The research revealed various facts which the bank had not pondered upon earlier.
The bank discovered that their customers perceive themselves as-
- Hardworking and ordinary everyday people. They do not consider themselves as
- They value family, good health, quality time, knowledge and experience.
- Being well travelled and worldly wise
- Success is about taking the responsibility for and good care of, the things they
value most-family, friends and health
- Achieving financial independence is their aspiration.

In the nut shell the customers desire to experience more of the world, travel new places,
experience new things, meet new people and fill their mind and soul with new cultural
experiences and most importantly access to more choices and opportunities to be more
financially secure and successful.

The inconsistencies combined with this customer research lead to the repositioning of the
Premier Brand. The target segment was redefined as the “cosmocrats” and emphasis was
laid on standardizing the customer experience across locations globally. The major
changes were-:
- Repositioning of the International Banking and the Wealth Management for
- New look and feel
- Differentiate and connect core proposition components.

The Pillars of Global Premier

Pillar 1-International Recognition and Local Support

Every Premier customer is recognized as Premier customer wherever they are in the
world. The staff, interacting with Premier customers offers the same high level of
service to non local Premier Customer as much as they provide to their local
customers. They should provide Global Service Standards which are as follows-:
- Warm welcome to the customer
- Emergency services provided as priority
- Connection to local Telephone Banking, Internet Banking and Local Relationship
- Local knowledge
- Language Capabilities
- Premier Centre Services and Facilities

Pillar 2- International Services

These services provide the customers in a new country all the possible facilities like
overseas customer account set up, Cross Border eligibility for the premier customers,
free international fund transfer, credit history, international needs review, personalized
on – board service, 24/7 telephone access, local country

All these services helps customers in relocating them, living in 2 countries or have
interests or family abroad. It is further working to develop fully online account
opening which customers can initiate and develop international landing pages to
cover all Premier Markets.

Pillar 3-Premeir Card, Loyalty Program and Credit Policy

The customers will now be getting a preferred credit card with widest international
acceptance and local support in case of an emergency. This card would now have an
increased pre approved credit card limit and prevent card blocking and also focusing
on the improved credit card /debit card emergency services support.

Pillar 4-Wealth Management

The Global Premier will now provide access to information about what’s happening
in the markets, financial plans and qualified individuals to assist the customer in
making informed choices and achieving the goals.
The launch of Global Premier has now given some General Standards which includes
- A comprehensive product range
- Introductory statement to all the customers
- Brochures and other documentation should provide key product features
- Specific procedures will be applied for sales to vulnerable customers
- Updating global and local market information for the customers.
- Specifically they will now be provided with a “Term of Business” letter, ensuring
that advise is for the customer’s best interest, adopting a need based sales
approach and according to the risk appetite of the customer.

Pillar 5- Relationship Management and People

The Premier Relationship manager will now be trained to a global consistent level
through a RM academy. There will be a regular performance tracking of the
Relationship Managers.

The Relationship Managers will have an Aspirational Role to build a relationship with
the customers based on the Mutual Respect and Professionalism


The Relationship Managers are now positioned as the navigators for the customer,
who are now considered as the pilots.

The mission is of the RM academy is to create a global community of the “best” and
deliver the “ICICI Premier Way” and to provide the best training practices for the
Relationship Manager’s and Support teams.

Before the launch of the Global Premier, a two stage training program was held at
HBSC so that all the changes incorporated in the Premier are understood fully to
adhere to the Basic Principles of the ICICI

Wealth Management Solutions and Investment Avenues

In delivering the Wealth Management Solutions, ICICI provides investment solutions to

the customers in the following different avenues –
1. Mutual Funds
2. Insurance (Unit Linked Insurance Plans)
 Life Insurance
 Home Insurance
 Medical Insurance
 Accidental Insurance
3. Regular Fixed Deposits
Current Trends in Wealth Management:
Wealth Management aims at providing the customer with appropriate investment plan
to invest in suitable investment products in order to meet his long and short term
financial goals.

Currently, Mutual Funds and Insurance are two most prevalent investment options for
the customers in the Wealth Management Business. The reason being, the benefits
attached to both the instruments and the availability of varied and highly
differentiated investment options in both Mutual Funds and ULIPs across a wide
range so as to suit investors of different risk profiles. A direct investment in equity
could also be considered as an investment for providing Wealth Management
solutions, but a direct investment is considered of very high risk, even for customers
with high risk appetite. This is why, ICICI and many almost all other banks do not
promote direct investment in equity for its Wealth Management customers.
 The objective of the project are:

 To know what is portfolio management and its important

 Understanding investors needs

 To analyze different investment options.

 How the investor can achieve maximum return from the portfolio?

We analyze an optimal dynamic portfolio and asset allocation policy for investors who
are concerned about the performances of their portfolios relative to that of a given
benchmark. Maximizing the expected utility of the excess return over a chosen
benchmark is sometimes referred to as active portfolio management, while passive
portfolio management just establishes a portfolio that possibly tracks the chosen
benchmark; see Roll (1992) and Sharpe et al. (1995) for an extensive discussion. There
are many professional and institutional investors who follow this benchmark oriented
procedure. For example, many equity mutual funds take the S&P 500 Index
as a benchmark and try to beat it. Some bond funds try to exceed the performance of
Lehman Brothers Bond Index. For an analysis of active portfolio management in a static
setting, see Grinold and Kahn (2000). In the standard utility maximization with Constant
Relative Risk Aversion (CRRA), the optimal policies are all constant proportion portfolio
allocation strategies. The portfolio is continuously rebalanced so as to always keep a
constant proportion of the total fund value in the various asset classes, regardless of the
level of the fund. These optimal portfolio strategies require selling an asset when its price
rises relative to the other asset prices, and conversely, buying the asset when its price
drops relative to the others.
Although such policies have a variety of optimality properties for the ordinary portfolio
problem and are used in asset allocation practice (see Perold and Sharpe 1988 and Black
and Perold 1992), some investors are reluctant to use constant proportion strategies in the
belief that their expectations suggest that varying weights would be more profitable.
Maximizing the probability that the investment fund achieves a certain performance goal
before falling below a predetermined shortfall relative to the benchmark, Browne (2000)
relates the optimal portfolio policy to a state variable, the ratio of the level of investment
portfolio to the benchmark portfolio, which leads to an analytical solution for a complete
market setting.
Managers of actively managed mutual funds are interested in shifting the investment
policy with changes of returns on both their investment portfolios and the benchmark
portfolio from time to time. Academic researchers define this market activity as market
timing; see Becker et al. (1999), Coggin et al. (1993), Ferson et al (1996), Ferson and
Warther (1996), and Treynor and Mazuy (1966). In this paper, we address this issue for a
general incomplete market in which the investor is allowed to invest in a large number of
stocks which may include all the individual components of equity indices. It is well
known that all efficient portfolios can be obtained from the market portfolio by using
leverage in a static setting, assuming normally distributed returns or quadratic utlities.
However, as we will show in this paper, this is generally not true in a dynamic setting
except for the very special case that the market portfolio is equivalent to a leveraged
growth optimum portfolio.

Consistent with the standard risk/return tradeoff, the objective of the optimization model
is to maximize the expected differential returns on the investment portfolio and the
benchmark adjusted by its quadratic variation over the investment horizon. This objective
is intuitive and easy to be understood; it has a simple model structure and has been used
widely in the practice of portfolio management. Based on this setting, we derive an
analytical solution assuming that the model parameters are time varying. The optimal
portfolio is a linear combination of the riskless asset, the growth optimal portfolio and the
benchmark portfolio.
As documented in Gruber (1996), there has been a tremendous and persistent growth in
the importance of the mutual fund industry over the past decades. The evaluation of
portfolio performance has stimulated a great deal of interest in academic research.
Although there are many evaluation techniques proposed from different perspective in
terms of equilibrium models, there is no consensus about the ability of professional
portfolio managers to earn abnormal returns. Most of previous approaches to portfolio
performance evaluation are based by and large on static regression analysis of one period
realized return. Under the assumption that portfolio weights are fixed for uninformed
managers, regression models are employed to find the abnormal returns against a well
diversified or mean variance efficient portfolios; see Brinson et al. (1986), Fama and
French (1992, 1993), Grinblatt and Titman (1989), and Jensen (1968). As Dybvig and
Ross (1985) pointed out, such regression models are not immune from a biased selection
of the benchmark for evaluation. Using a different benchmark might reverse the ranks of
two funds. A even worse situation is that a portfolio with a very strong performance
might be ranked a lot lower than a portfolio with very bad performance. Similarly, if the
market is incomplete, stochastic discount factor models, see Chen and Knez (1996),
Fergson et al (1999), are subject to the same problem because a stochastic discount factor
might be negative in some of the states.
Existing models have more or less ignored the activities in shifting the portfolio weights
during the investment horizon. Dynamic optimal portfolios require portfolio managers to
reformulate their portfolios upon receiving new information. Especially, for those mutual
funds whose performances are tied to a selected benchmark, updating of a portfolio over
time appears to be even more appropriate. A very common question often arises as how to
define managers’ portfolio strategies, without observing their risk sensitivity. Thus, our
first step is to infer the risk sensitivity of portfolio managers by utilizing the outcome of
the portfolio returns over time. Estimation of risk sensitivity is based on dynamic
matching. In other words, portfolios’ abnormal returns are measured as the difference
between the actual outcomes of the portfolio return and the implied return by the model.
The estimate of risk sensitivity is then defined as the minimizers of the total deviation of
portfolio returns from the implied returns by the model. Subsequently, the performance
measure is defined as the expected value of the discounted abnormal returns over the
investment horizon.
For empirical testing of the model, we study the performance of a sample of the Indian
mutual funds. We find that performance of individual mutual funds is negatively
correlated with the estimated risk sensitivity. All correlations for the three year data are
statistically significant at a 99% confidence level.
Portfolio management approach to managing your investments is as follows:

Improved Resource Allocation. Too often today, low value projects, or projects in trouble,
squeeze scarce resources and do not allow more valuable projects to be executed. One
critical step is for all departments to prioritize their own work. However, that is only part
of the process. True portfolio management on an organization-wide basis requires
prioritization of work across all of the departments. In addition to more effectively
allocating labor, non-labor resources can be managed in the portfolio as well.
The portfolio management services (PMS) schemes are generally pooled in nature today
due to the operational conveniences. The small ticket size like retail type are pooled and
given the benefit of large size with diversification and economical way of handling.
It facilitates buying and selling at ease in bulk providing the benefit on size, cost and
time. The brokerage incurred on such large pool will be on wholesale basis, and therefore
cheaper than retail brokerage. The purchases of shares are allotted pro-rata on the same
day to all the clients. This also ensures minimum documentation and facilitates easy
operations for the portfolio managers.

Sebi’s pooled client norm is a welcome move to modify and update the guidelines in line
with the objective to facilitate the investors with a more transparent understanding of
PMS fund management process. In as much as that, it is an investor-friendly step.
Increase in threshold level for networth to Rs 2 crore is also a first step towards raising
entry barriers to this product line, which, hopefully will ensure more professional
handling of the business. At the same time, these guidelines should also be looked into
from the operational side to ensure smooth business flow at a reduced cost to the

The major operational challenges now before the PMS fund managers will be to handle
small ticket size. In such cases, it may not be economical as it involves opening various
accounts starting from the bank account, custodian accounts to customised agreements on
an individual basis leading to execution of deals on an individual client basis with
innumerable contract notes and custodian follow-ups to allotment. Further the small
tickets may not be cost effective considering the brokerage as well as will do away with
the benefit of size. Overall, it will increase operational requirements and the advantage of
operating an economic large size will be lost with the increase in administrative costs.

The major challenge before the industry due to the new guidelines is to find new
technology driven solutions to reduce transaction cost under the new regime, comply
with the investor disclosure norms, and ensure better levels of customer care.
SEBI’s new norm banning the pooling of clients assets by portfolio managers under their
portfolio management services (PMS) has flustered most players who have cited increase
in costs as well as paperwork as key negatives to the move. While we agree with the cost
increase argument, the other argument is not tenable since any serious PMS manager
would have manpower and software capabilities to handle non-pool trades as well. We
believe Sebi’s new norm has many positives to it.

For PMS clients, it clearly means more transparency. They will be able to track and trace
trades and ensure there is no manipulation in their account. India’s capital market in the
past two decades has many instances of the flagrant violation of regulatory norms for
PMS by various market participants. The new norms are also welcome at a time when the
number of high networth individuals (HNIs) in India is sharply going up and the need for
PMS is on the rise. In a non-pool system, it would be very difficult for anybody to mask
proprietary trades as client trades or proprietary losses as client losses. Moreover, clients
with higher portfolio values could now expect to get some level of customisation rather
than get bunched up with the rest. Also, due to the recent stock market boom, a number of
small outfits have propped up providing PMS services, many of which followed lax
reporting practices.
The new non-pool system automatically raises reporting standards, again to prevent abuse
of the PMS product. The new SEBI norm, however, does throw up some tricky
operational issues like possibility of trades for the same scrip being done at different rates
for clients due to intraday fluctuation of market rates. Similarly in a non-pool system, it
is likely that trades for all clients may not get executed if the scrip hits circuit limit. In
such cases the rate of return on the portfolio will be different among clients leading to
We believe that SEBI’s new initiatives are in the right direction and would result in
healthy growth of PMS segment in the long-run. This includes equipment, software,
outsourced work, etc. Just because you outsource a project, for instance, and do not use
your own labor, does not mean it should not be a part of the portfolio. The same
prioritization process should take place with all of the resources proposed for the
portfolio. Improved Scrutiny of Work. Everyone has pet projects that they want to get
done. In some departments, managers make funding decisions for their own work and
they are not open to challenge and review. Portfolio management requires work to be
approved by all the key stakeholders. The proposed work is open to more scrutiny since
managers know that when work is approved in one area, it removes funding for potential
work in other areas. As stewards of the department's money, the Executive will now have
a responsibility to approve and execute the work that is absolutely the highest priority and
the highest value.

More Openness of the Authorization Process. Utilizing a portfolio management process

removes any clouds of secrecy on how work gets funded. The Business Planning Process
allows everyone to propose work and ensures that people know the process that was
followed to ultimately authorize work. Less Ambiguity in Work Authorization. The
portfolio management planning process provides criteria for evaluating work more
consistently. This makes it easier to compare work on an apples-to-apples basis and do a
better job in ensuring that the authorized work is valuable, aligned and balanced.
Improved Alignment of the Work. In addition to making sure that only high priority work
is approved, portfolio management also results in the work being aligned. All portfolio
management decisions are made within the overall context of the department's strategy
and goals. In the IT department, portfolio management provides a process for better
translating business strategy into technology decisions.
Improved Balance of Work. In financial portfolio management, you make sure that your
resources are balanced appropriately between various financial instruments such as
stocks, bonds, real estate, etc. Business portfolio management also looks to achieve a
proper balance of work. Example: When you first evaluate your portfolio of work, you
may find that your projects are focused too heavily on cost cutting, and not enough on
increasing revenue. You might also find that you cannot complete your strategic projects
because you are spending too many resources supporting your old legacy systems.
Portfolio management provides the perspective to categorize where you are spending
resources and gives you a way to adjust the balance within the portfolio as needed.

Changed Focus from Cost to Investment. You don't focus on the "cost" side of your
financial portfolio although, in fact, all of your assets were acquired at a cost. Example:
You may have purchased XYZ company stock for $10,000. However, when you discuss
your financial portfolio, you don't focus on the $10,000 you do not have anymore. You
invested the money and now have stock in return so you focus on the stock that you now
own. You might also talk about your investment of $10,000 to purchase the stock, but
your interest is in its current value and whether it has generated a positive or negative
benefit! Likewise, in your business portfolio, you are spending money to receive benefits
in return. Portfolio management focuses on the benefit value of the products and services
produced rather than just on their cost. This switch in focus is especially important in the
Information Technology (IT) area, where many executives still think of value in terms of
the accumulated cost of computers, monitors and printers. Using the portfolio
management model, you show the value of all expenditures in your portfolio. These
expenditures include not just the computing hardware and software, but also the value
associated with all project and support work. If the value is there relative to the cost, the
work should be authorized. If the value is not there relative to the cost, the work should
be eliminated, cut back or backlogged. However, the basic discussion should be focused
on value delivered – not just on the cost of the products and services. Increased
Collaboration. In many organizations, senior managers make business decisions while
only taking into account their own department. Example: The Marketing Division is
making the best decisions for Marketing, and the Finance Division is making the best
decisions for Finance. However, when all the plans are put together, they do not align into
an integrated whole, and, in fact, they are sometimes at odds.

You cannot perform portfolio management within a vacuum. If you practice portfolio
management at the top of your organization, all departments will need to collaborate on
an ongoing basis. If you are practicing portfolio management within a service department
like IT, portfolio management will force collaboration between and among IT and the
other client departments. Enhanced Communication. This is a similar benefit to increased
collaboration. In many organizations today, functional departments do not communicate
well with their peer departments or even within their own groups. Portfolio management
requires an ongoing dialog. If your portfolio is organization-wide, the heads of the
departments will need to communicate effectively.
This enhanced communication will also be required between the Executive and the
portfolio management team. In addition, there are many more opportunities to
communicate the value of the portfolio. Portfolio metrics should be captured and shared
with the rest of the departments. A portfolio management dashboard should be created
and shared. The business value of portfolio projects should also be measured and shared.
Increased Focus on When to Stop a Project. This is equivalent to selling a part of your
financial portfolio because the investment no longer meets your overall goals. It may no
longer be profitable, or you may need to change your portfolio mix for the purposes of
overall balance. In either case, you need to sell the investment. Likewise, when you are
managing a portfolio of work, you are also managing the underlying portfolio of assets
that the work represents. In the IT Division, for instance, the assets include business
application systems, software, hardware, telecommunications, etc. As you look at your
portfolio, you may recognize the need to "sell" assets. While the asset may not literally be
sold, you may decide to retire or eliminate the asset.

Example: A number of years ago you may have converted to new database software and
now you realize that only a couple of the old databases remain in use. It may make sense
to proactively migrate the remaining old databases to the new software. This simplifies
the technical environment and may also result in eliminating a software maintenance
contract. This is equivalent to selling an asset that is no longer useful within the portfolio.
Mutual fund houses bemoan that the response to their capital protection schemes has, at
best, been lukewarm. But portfolio management service (PMS) providers have a different
story to tell. They claim that their structured products — with objectives similar to those
of capital protection schemes — are selling like hot cakes, especially since the stock
market is precariously poised. Why this discrimination? The answer could lie in the
relatively more flexible investment models of PMS providers, which allow them to
reshuffle their allocations swiftly. This freedom could come in handy more so during bear
markets, when returns are hard to come by, feel markets watchers. The primary objective
of capital protection products or schemes is shielding the capital, at the same time
generating better returns as compared to fixed-income products. PMS providers follow
the more advanced models such as CPPI (constant proportion portfolio insurance) or DPI
(dynamic portfolio insurance), while regulations require mutual funds to follow the basic
‘static-hedge’ model. In the static hedge model, the fund manager allocates a pre-
determined percentage of the portfolio to debt instruments to the extent that their value is
equal to the investor’s capital. The rest of the portfolio is invested in the riskier equity
instruments for boosting returns.
Ironically for mutual funds, the percentage of portfolio allocation is as per
recommendations by ratings agencies, which determine them on various parameters,
market volatility being one such yardstick. So far, most capital protection schemes have
been asked to have at least 70-75% of their portfolio in debt and the rest in equity. The
CPPI model, which most PMS providers follow, is based on the static model, but allows
rebalancing of portfolios with higher percentage of equity allocation, as per pre-
determined metrics. Accordingly, PMS providers invest most of the money in shares and
move swiftly to debt instruments, when markets fall and the value of the portfolio falls
below a pre-determined level.
Similarly, they shift back to equities, when the sentiment improves. Here, most of the
products are structured in such a way that they can invest up to 100% investments in
equity or debt.
The current demand for such customised products by PMS providers can be attributed to
the uncertain outlook in domestic equities. “There is good demand for this product, which
is being sold as an asset allocation product, allowing investors to derisk their portfolio,”
said ICICI Asset Management’s PMS-head Sai Krishna Tampi. Mutual fund industry
officials feel the product can be a success only if funds are allowed to structure the
product flexibly, without compromising on the basic objective of the fund.
Investment management is the professional management of various securities (shares,
bonds etc.) and assets (e.g., real estate), to meet specified investment goals for the benefit
of the investors. Investors may be institutions (insurance companies, pension funds,
corporations etc.) or private investors (both directly via investment contracts and more
commonly via collective investment schemes e.g. mutual funds) . The term asset
management is often used to refer to the investment management of collective
investments, whilst the more generic fund management may refer to all forms of
institutional investment as well as investment management for private investors.
Investment managers who specialize in advisory or discretionary management on behalf
of (normally wealthy) private investors may often refer to their services as wealth
management or portfolio management often within the context of so-called "private
The provision of 'investment management services' includes elements of financial
analysis, asset selection, stock selection, plan implementation and ongoing monitoring of
investments. Investment management is a large and important global industry in its own
right responsible for caretaking of trillions of dollars, euro, pounds and yen. Coming
under the remit of financial services many of the world's largest companies are at least in
part investment managers and employ millions of staff and create billions in revenue.
Fund manager (or investment advisor in the U.S.) refers to both a firm that provides
investment management services and an individual(s) who directs 'fund management'
Various groups of securities when held together behave in a different manner and give
interest payments and dividends also, which are different to the analysis of individual
securities. A combination of securities held together will give a beneficial result if they
are grouped in a manner to secure higher return after taking into consideration the risk
There are two approaches in construction of the portfolio of securities. They are
 Traditional approach

 Modern approach

Traditional approach was based on the fact that risk could be measured on each
individual security through the process of finding out the standard deviation and that
security should be chosen where the deviation was the lowest. Traditional approach
believes that the market is inefficient and the fundamental analyst can take advantage of
the situation. Traditional approach is a comprehensive financial plan for the individual. It
takes into account the individual needs such as housing, life insurance and pension plans.
Traditional approach basically deals with two major decisions. They are

a) Determining the objectives of the portfolio

b) Selection of securities to be included in the portfolio

Modern approach theory was brought out by Markowitz and Sharpe. It is the combination
of securities to get the most efficient portfolio. Combination of securities can be made in
many ways. Markowitz developed the theory of diversification through scientific
reasoning and method. Modern portfolio theory believes in the maximization of return
through a combination of securities. The modern approach discusses the relationship
between different securities and then draws inter-relationships of risks between them.
Markowitz gives more attention to the process of selecting the portfolio. It does not deal
with the individual needs.
Markowitz model is a theoretical framework for analysis of risk and return and their
relationships. He used statistical analysis for the measurement of risk and mathematical
programming for selection of assets in a portfolio in an efficient manner. Markowitz
approach determines for the investor the efficient set of portfolio through three important
variables i.e.
 Return

 Standard deviation

 Co-efficient of correlation

Markowitz model is also called as a “Full Covariance Model“. Through this model the
investor can find out the efficient set of portfolio by finding out the trade off between risk
and return, between the limits of zero and infinity. According to this theory, the effects of
one security purchase over the effects of the other security purchase are taken into
consideration and then the results are evaluated. Most people agree that holding two
stocks is less risky than holding one stock. For example, holding stocks from textile,
banking and electronic companies is better than investing all the money on the textile
company‘s stock.

Markowitz had given up the single stock portfolio and introduced diversification. The
single stock portfolio would be preferable if the investor is perfectly certain that his
expectation of highest return would turn out to be real. In the world of uncertainty, most
of the risk adverse investors would like to join Markowitz rather than keeping a single
stock, because diversification reduces the risk.

 All investors would like to earn the maximum rate of return that they can achieve
from their investments.

 All investors have the same expected single period investment horizon.
 All investors before making any investments have a common goal. This is the
avoidance of risk because Investors are risk-averse.

 Investors base their investment decisions on the expected return and standard
deviation of returns from a possible investment.

 Perfect markets are assumed (e.g. no taxes and no transaction costs)

 The investor assumes that greater or larger the return that he achieves on his
investments, the higher the risk factor surrounds him. On the contrary when risks
are low the return can also be expected to be low.

 The investor can reduce his risk if he adds investments to his portfolio.

 An investor should be able to get higher return for each level of risk “by
determining the efficient set of securities“.

 An individual seller or buyer cannot affect the price of a stock. This assumption is
the basic assumption of the perfectly competitive market.

 Investors make their decisions only on the basis of the expected returns, standard
deviation and co variances of all pairs of securities.

 Investors are assumed to have homogenous expectations during the decision-

making period

 The investor can lend or borrow any amount of funds at the risk less rate of
interest. The risk less rate of interest is the rate of interest offered for the treasury
bills or Government securities.

 Investors are risk-averse, so when given a choice between two otherwise identical
portfolios, they will choose the one with the lower standard deviation.

 Individual assets are infinitely divisible, meaning that an investor can buy a
fraction of a share if he or she so desires.

 There is a risk free rate at which an investor may either lend (i.e. invest) money or
borrow money.
 There is no transaction cost i.e. no cost involved in buying and selling of stocks.

 There is no personal income tax. Hence, the investor is indifferent to the form of
return either capital gain or dividend.


It is believed that holding two securities is less risky than by having only one investment
in a person‘s portfolio. When two stocks are taken on a portfolio and if they have
negative correlation then risk can be completely reduced because the gain on one can
offset the loss on the other. This can be shown with the help of following example:


Covariance of the securities will help in finding out the inter-active risk. When the
covariance will be positive then the rates of return of securities move together either
upwards or downwards. Alternatively it can also be said that the inter-active risk is
positive. Secondly, covariance will be zero on two investments if the rates of return are
independent. Holding two securities may reduce the portfolio risk too. The portfolio risk
can be calculated with the help of the following formula:
Markowitz, William Sharpe, John Lintner and Jan Mossin provided the basic structure of
Capital Asset Pricing Model. It is a model of linear general equilibrium return. In the
CAPM theory, the required rate return of an asset is having a linear relationship with
asset‘s beta value i.e. undiversifiable or systematic risk (i.e. market related risk) because
non market risk can be eliminated by diversification and systematic risk measured by
beta. Therefore, the relationship between an assets return and its systematic risk can be
expressed by the CAPM, which is also called the Security Market Line.

Rp= Rf Xf+ Rm(1- Xf)

Rp = Portfolio return
Xf = The proportion of funds invested in risk free assets
1- Xf = The proportion of funds invested in risky assets
Rf = Risk free rate of return
Rm = Return on risky assets
Formula can be used to calculate the expected returns for different situations, like mixing
risk less assets with risky assets, investing only in the risky asset and mixing the
borrowing with risky assets.
According to CAPM, all investors hold only the market portfolio and risk less securities.
The market portfolio is a portfolio comprised of all stocks in the market. Each asset is
held in proportion to its market value to the total value of all risky assets. For example, if
Satyam Industry share represents 15% of all risky assets, then the market portfolio of the
individual investor contains 15% of Satyam Industry shares. At this stage, the investor
has the ability to borrow or lend any amount of money at the risk less rate of interest.

E.g.: assume that borrowing and lending rate to be 12.5% and the return from the risky
assets to be 20%. There is a trade off between the expected return and risk. If an investor
invests in risk free assets and risky assets, his risk may be less than what he invests in the
risky asset alone. But if he borrows to invest in risky assets, his risk would increase more
than he invests his own money in the risky assets. When he borrows to invest, we call it
financial leverage. If he invests 50% in risk free assets and 50% in risky assets, his
expected return of the portfolio would be

Rp= Rf Xf+ Rm(1- Xf)

= (12.5 x 0.5) + 20 (1-0.5)
= 6.25 + 10
= 16.25%

if there is a zero investment in risk free asset and 100% in risky asset, the return is
Rp= Rf Xf+ Rm(1- Xf)
= 0 + 20%
= 20%

if -0.5 in risk free asset and 1.5 in risky asset, the return is

Rp= Rf Xf+ Rm(1- Xf)

= (12.5 x -0.5) + 20 (1.5)
= -6.25+ 30
= 23.75%


Portfolio manager evaluates his portfolio performance and identifies the sources of
strengths and weakness. The evaluation of the portfolio provides a feed back about the
performance to evolve better management strategy. Even though evaluation of portfolio
performance is considered to be the last stage of investment process, it is a continuous
process. There are number of situations in which an evaluation becomes necessary and
i. Self Valuation: An individual may want to evaluate how well he has done. This is
a part of the process of refining his skills and improving his performance over a
period of time.

ii. Evaluation of Managers: A mutual fund or similar organization might want to

evaluate its managers. A mutual fund may have several managers each running a
separate fund or sub-fund. It is often necessary to compare the performance of
these managers.

iii. Evaluation of Mutual Funds: An investor may want to evaluate the various
mutual funds operating in the country to decide which, if any, of these should be
chosen for investment. A similar need arises in the case of individuals or
organizations who engage external agencies for portfolio advisory services.

iv. Evaluation of Groups: Academics or researchers may want to evaluate the

performance of a whole group of investors and compare it with another group of
investors who use different techniques or who have different skills or access to
different information.


 We can try to evaluate every transaction. Whenever a security is brought or sold,
we can attempt to assess whether the decision was correct and profitable.
 We can try to evaluate the performance of a specific security in the portfolio to
determine whether it has been worthwhile to include it in our portfolio.

 We can try to evaluate the performance of portfolio as a whole during the period
without examining the performance of individual securities within the portfolio.


Portfolio management has emerged as a separate academic discipline in India. Portfolio
theory that deals with the rational investment decision-making process has now become
an integral part of financial literature.
Investing in securities such as shares, debentures & bonds is profitable well as exciting.
It is indeed rewarding but involves a great deal of risk & need artistic skill. Investing in
financial securities is now considered to be one of the most risky avenues of investment.
It is rare to find investors investing their entire savings in a single security. Instead, they
tend to invest in a group of securities. Such group of securities is called as PORTFOLIO.
Creation of portfolio helps to reduce risk without sacrificing returns. Portfolio
management deals with the analysis of individual securities as well as with the theory &
practice of optimally combining securities into portfolios.
The modern theory is of the view that by diversification, risk can be reduced. The
investor can make diversification either by having a large number of shares of companies
in different regions, in different industries or those producing different types of product
lines. Modern theory believes in the perspective of combinations of securities under
constraints of risk and return.
The portfolio which is once selected has to be continuously reviewed over a period of
time and then revised depending on the objectives of the investor. The care taken in
construction of portfolio should be extended to the review and revision of the portfolio.
Fluctuations that occur in the equity prices cause substantial gain or loss to the investors.
The investor should have competence and skill in the revision of the portfolio. The
portfolio management process needs frequent changes in the composition of stocks and
bonds. In securities, the type of securities to be held should be revised according to the
portfolio policy.
An investor purchases stock according to his objectives and return risk framework. The
prices of stock that he purchases fluctuate, each stock having its own cycle of
fluctuations. These price fluctuations may be related to economic activity in a country or
due to other changed circumstances in the market. If an investor is able to forecast these
changes by developing a framework for the future through careful analysis of the
behavior and movement of stock prices is in a position to make higher profit than if he
was to simply buy securities and hold them through the process of diversification.
Mechanical methods are adopted to earn better profit through proper timing. The investor
uses formula plans to help him in making decisions for the future by exploiting the
fluctuations in prices.


The formula plans provide the basic rules and regulations for the purchase and sale of
securities. The amount to be spent on the different types of securities is fixed. The
amount may be fixed either in constant or variable ratio. This depends on the investor‘s
attitude towards risk and return. The commonly used formula plans are

i. Average Rupee Plan

ii. Constant Rupee Plan

iii. Constant Ratio Plan

iv. Variable Ratio Plan


 Basic rules and regulations for the purchase and sale of securities are provided.

 The rules and regulations are rigid and help to overcome human emotion.

 The investor can earn higher profits by adopting the plans.

 A course of action is formulated according to the investor‘s objectives.

 It controls the buying and selling of securities by the investor.

 It is useful for taking decisions on the timing of investments.

 The formula plan does not help the selection of the security. The selection of the
security has to be done either on the basis of the fundamental or technical

 It is strict and not flexible with the inherent problem of adjustment.

 The formula plans should be applied for long periods, otherwise the transaction
cost may be high.

 Even if the investor adopts the formula plan, he needs forecasting. Market
forecasting helps him to identify the best stocks.

Primary Research

Research will be done to get a detailed overview of the wealth management industry and

study the need for financial planner in the current scenario. Questionnaire will be

designed to study the investment psyche of a person, their practice on saving, different

investment options available and the need of financial planners to manage individual’s

wealth. This project will be mainly based on first hand observation in the market, the way

financial planning functions, scope of financial planning and the need of a certified

financial planner.

The respondents will also be asked regarding their objectives behind investments and

their practice on saving money for investment such as retirement, paying off their loans

liabilities. The questionnaire will also stress on the role of financial planning, future of

financial advisor, products offered by different financial planners and perception and

satisfaction level of customers who are currently availing these services.

Secondary Research

Various sources of information will also be collected for attaining clarity on the prospects

of wealth management industry and the various financial planners in the market. The

source will also include basic investment objectives and the various types of investment

avenues open to an individual .

However the following sources will be considered for information gathering :

 Companies website
 Articles and reports available on the web


Only Delhi & NCR region covered for this report because of not availability of time and

resource. Also for data collection and interpretation are not very correct because of the

people not sharing more internal information either on internet or ready to give
1. What is your objective behind investments?
(a) Safety of Capital (b) Retirement

(c)Beating inflation (d) Tax Minimization

(e) Liquidity (f) Growth of Capital-Returns

Objective of Investment
Safety of Capital 12
Beating inflation 9
Retirement 12
Tax Minimization 18
Growth of Capital-Returns 15
Liquidity 34
Objective of Investment

Safety of Capital; 12; 12.00%

Liquidity; 34; 34.00% Beating inflation; 9; 9.00%
Growth of Capital-Returns; 15; 15.00% Retirement; 12; 12.00%
Tax Minimization; 18; 18.00%

Objective of the Investment became primary and secondary of the person as per of the
data suggested that 15% of the people investment made with regards of the growth of
capital returns adding to this 34% of the people invest because they trying to make more
money in the current situation also in Indian scenario 18% of the people invest because of
utilizing the tax benefits.

2. What is your practice on saving money?

(a) I don’t believe in saving.

(b) I’d like to save, but my expense & financial commitments do not permit me.

(c) I try to save whenever & wherever possible.

(d) I always save some percentage of my take-home salary without exception.

(e) Others (please specify)__________________________________________

(a) I don't believe in saving. 32
(b) I'd like to save, but my expense & financial commitments do not permit me. 12
(c) I try to save whenever & wherever possible. 43
(d) I always save some percentage of my take-home salary without exception. 13
Practice of Saving Money

(d) I always save some percentage of my take-home salary without exception.; 13; 13.00%
(c) I try (b)
to save whenever
to save,&but
I don't believe
43; 43.00%
saving.; 32; 32.00%
I'd like my expense & financial do not permit me.; 12; 12.00%

Practice of saving money this question tells us about the how many people putting their
money and what way. Almost 43% of the people trying to save whenever and wherever
possible to invest, adding to this 32% of the people said I always save some amount of
money which is a people who is earning quite decent in these times.

3. How much thought have you given to saving for retirement?

(a) Very little (b) Some

(C) A lot (d) None

4. Do you plan your investments?

Saving for Retirement

Very little 44
A lot 12
Some 30
None 14
Saving for Retirement

None; 14; 14.00%

Very little; 44; 44.00%

Some; 30; 30.00%

A lot; 12; 12.00%

Most of the saving made by the Indian people on behalf of retirement this question gives
an insight where these people have what kind of investment plan on the retirement. 44%
of the people suggested that Indian people not very keen to putting there money in the
retirement plan as far as these concern 30% of the people suggested yes they have some
plan through which they secure there retirement.

4. Do you plan your investments?

(a) Yes

(b) NO,

Planning of Investment
Yes 78
No 22
Planning of Investment

No; 22; 22.00%

Yes; 78; 78.00%

Earning will not be the same though out of the life of any human being so planning of
investment is the one of critical area where people secure there future to investing money
in the present scenario out of the 100 people 78% of them have some or other way of
planned investment but still 22% does not have any plan for there future investment.

5. How do you take financial decisions?

(a) Independently (b) Advise from friends/relatives

(c) Broker (d) Advise from a Chartered Accountant

(e) Advise from a Bank (f) Financial Advisors

(g) Others (Please specify)

Financial Decision
Independently 30
Broker 11
Advise from a Bank 8
Advise from friends/relatives 18
Advise from a Chartered Accountant 11
Financial Advisors 22
Financial Decision

Independently; 30; 30.00%

Financial Advisors; 22; 22.00% Broker; 11; 11.00%
Advise from a Bank; 8; 8.00%
Advise from a Chartered Accountant; 11; 11.00%
Advise from friends/relatives; 18; 18.00%

Financial decision taken by an individual is the first step of the success of wealth
managers and wealth management group. As per our study suggested that 22% of
Individual are taking financial advisors help for the investment adding to this larger
chunk of the Indian people are investment money Independently without taking any body
advise. 11% of the people taking help from the CA for the investment decision.

6. Are you aware about the concept of wealth manager or financial Advisors?

(a) Yes (b) No

Yes 65
No 35

No; 35; 35.00%

Yes; 65; 65.00%

In Indian scenario people are still not aware what are the wealth mangers role and what
will do with Financial advisors, 65% of the people are said yes they knew the
differentiation between the Financial and wealth managers adding to this 35% of the
person said no they are not understand these differences.

7. Do you currently avail financial advisor services/private banking services?

(a) Yes

(b) No,

Avail Financial Advisors Service

Yes 60
No 40
Avail Financial Advisors Service

No; 40; 40.00%

Yes; 60; 60.00%

This question will tells us how many people out of 100 in Delhi & NCR region avail
financial advisors help to take there investment decision to be done. As per our data
analysis 60% of the people are taking Financial advisors help for taking the investment
decision while still large pool of the people i.e 40 are untouched about these things.

8. If yes, from whom?

(a) ICICI Bank (b) CITI Bank

(c) HDFC Bank (d) Allegro Capital Advisors,

(e) Bajaj Capital (f) HSBC Bank

(g) YES Bank (h) Religare

(i) Others (Please specify)________________________

Financial Advisor Company

ICICI Bank 12
City Bank 9
HDFC Bank 12
Allegro Capital 1
Bajaj Capital 10
HSBC Bank 4
Yes Bank 3
Religare 9
Financial Advisor Company

Religare; 9; 15.00%
ICICI Bank; 12; 20.00%
Yes Bank; 3; 5.00%
HSBC Bank; 4; 6.67%

City Bank; 9; 15.00%

Bajaj Capital; 10; 16.67% HDFC Bank; 12; 20.00%
Allegro Capital; 1; 1.67%

As per this data suggested that In Delhi & NCR HDFC and the ICICI bank has tough
competition to sustain there growth.
9. What are the products you are getting from your service provider ?

(a) Mutual Funds (b) Initial Public Offer (IPO)

(c) Secondary Market (d) Post Office Schemes/Debt

(e) Insurance (f) Real Estate/ Property

(g) Tax Planning (h) Loans

(i) Administrative Services (j) Gold

(k) Art/Paintings

(l) Others (Please specify)________________________

Financial Instrument
Mutual Funds 7
Secondary market 12
Post office 1
Insurance 11
Real Estate 9
Tax Planning 5
Loans 4
Administrative Services 1
Gold 7
Art or Painting

Financial Instrument

Gold; 7; 11.67%
Mutual Funds; 7; 11.67%
Administrative Services; 1; 1.67%
IPO; 3; 5.00%
Loans; 4; 6.67%
Tax Planning; 5; 8.33% Secondary market; 12; 20.00%

Post office; 1; 1.67%

Real Estate ; 9; 15.00% Insurance; 11; 18.33%

There are various financial instrument in the market which has been offered by the
organisation now a days but in Delhi & NCR area 20% of the people secondary market
assistance while 15% of the people taking help in terms of real estate of property
investment for them 18% of the people take Insurance form these organisation as well.

10. Allocate points ranging from 0 to 4, you would give to the following parameters

according to the level of importance you will/have give/given while going for a

financial advisor, where 0 conveys indifference to the factor and 4 showcase absolute


Absolute Very Important Least Indifference

Parameters importance Important Important
(4) (3) (2) (1) (0)
Brand Name
Overall Services
Absolute Very Importan Indifferenc
importance Important t Least e
Brand Name 35 34 22 9
Charges 45 20 25 5 5
Flexibility 25 28 16 27 4
Services 36 27 31 5 1

Brand Name Charges Flexibility Overall Services

Absolute importance; 45

Absolute importance;
Absolute importance; 35 36
Very Important; 34
Important; 31
Important; 28
Important; 27 Least; 27
Absolute importance; 25 Important; 25
Important; 22
Very Important; 20
Important; 16

Least; 9

Important; 3 Least; 4Least; 5Least;

5 Indifference;
5 5 4
Absolute importance; 1Very Important; 2 Indifference; 1
Indifference; 0

I tried to make it comparative study about the investors perception about the investment
or taking and financial advisory services from the firm. Almost 85 people said Brand
name should be very important for them to make reliable and safe investment on charges
they are still bit conscious because Indian consumer is very price sensitive.
11. The charges taken by your wealth manager are
(a) Reasonable (b) Costly


Reasonable 56

Costly 44

Costly; 44; 44.00%

Reasonable ; 56; 56.00%

Indian consumer are very cost sensitive it is presume in many cases this is assumption
made by the every service and product provider in India. For the wealth management
charges we got almost mix response out of 100 people from Delhi & NCR 56% of them
are said it is reasonable and the 44% of them are they never taken because it is incurred
him/her higher cost.

12. Have you ever faced any negative experience with your wealth manager?
(a) Yes (b) No

Negative Experience
Yes 46
No 54
Negative Experience

Yes; 46; 46.00%

No; 54; 54.00%

After recession time the negative exp with the wealth management team and the financial
advisory team is shoot up in the Delhi & NCR area 46% of the people suggested that they
have had a negative experience with the company which they associated with various
measures. Although approximately 54% of the happiest customer we also find to
incorporate there views in our survey.

In India, there are a large number of savers, barring the population who are below the
poverty line. In a poor country like this, it is surprising that its saving rate is as high as
27% of GDP per annum and investment at 28% of GDP. But the return in the form of
output growth is 3!: low as 5 to 7% per annum. One may ask why is it that high levels of
investment could not generate, comparable rates of growth of output? The answer is poor
investment strategy, involving high capital output ratios, low productivity of capital and
high rates of obsolescence of capit1l. What is true of the nation at that Macro level is also
true at Micro level of individuals and institutions.

The use of capital in India is wasteful and inefficient, despite the fact that India is labor
rich and capital poor. Thus, the Portfolio Managers in India lack the expertise and
experience, which will enable them to have proper strategy for investment management.
Secondly, the average Indian Household saves around 60% in financial form and 40% in
physical form. Of those in financial form, nearly 42% is held in cash and bank deposits,
as per the latest RBI data and they have negative real returns or return less than the
inflation rates. Besides, a proportion of35% of financial savings is held in form of
Insurance, P.F., Pension Funds etc., while another l2% is in government instruments and
Certificates like Post Office Deposits, N.S. Certificates, Public Provident Funds, National
Saving Scheme etc. The real returns on Insurance, P.F., etc., are low and many times
lower than the average inflation rates. With the removal of many tax concessions for
investments in P.O. Savings instruments, Certificates, etc., they also become less
attractive to small and medium investors. The only investments, satisfying all their
objectives are capital market instruments. These objectives are income, capital
appreciation, safety, marketability, Liquidity and hedge against inflation, and investment
by average household in shares and debentures is only around 5% of the total financial
Objectives of Investors: The return on equity investments in the capital market
particularly if proper investment strategy is adopted would satisfy the above objectives
and the real returns would be higher than any other saving instruments. It is in this
context, the art and science of investment and of Portfolio
Management became the sine-qua-none of success.
All investments involve risk taking. However, some risk free investments are available
like bank deposits or P.O. Deposits whose returns are called risk free returns of about 5-
12%. So the returns on more risky investments are higher than that, having risk premium.
Risk is variability of return and uncertainty of payment of interest and repayment of
principal. Risk is measured by standard deviation of the returns over the mean for a given
period. Risk varies directly with return. The higher the risk taken, the higher is the return,
under normal market conditions. Wealth managers are beginning to investigate innovative
segmentation methods to manage the changing client profile. Over the next 20 years’
wealth managers will hone their segmentation methods. Wealth managers will develop
segmentation as a service efficiency initiative. Segmentation models will apply holistic
criteria to wealth management. The most important segments globally will be
entrepreneurs and SMES/ CEOs. Financial advisers will become an important separate
client segment for wealth managers The organization of direct client ownership will also
change Availability and flexibility will become vital components of the business model
Internal restructuring will aim to integrate client services. The rise of the mass affluent
represents an opportunity for wealth managers in the medium term Wealth managers will
capture the higher value mass affluent market by offering a scaled down wealth
management service. The mass affluent proposition will run along the lines of the current
wealth management service. Liability management is currently not part of the wealth
management agenda but has proven potential. Clients in developed markets are seeking
more holistic wealth management services Liability management is clearly a profitable
area with a proven existing client base. The incorporation of lending into wealth
management will shift the focus of the service. Specialist forms of lending will also
become common additions to the offerings of many wealth managers. Some will fail due
to a persistence of the “asset focused” service model and a lack of commitment. There are
significant benefits in the area of liability management for the wealthy, and that the
importance of liability management as part of wealth management will inevitably grow
over the next 20 years, until it becomes a key service area. Rising income and wealth
inequalities, if not matched by a corresponding rise of incomes across the nation, can lead
to social unrest. An area of great concern is the level of ostentatious expenditure on
weddings and other family events. Such vulgarity insults the poverty of the less
privileged, it is socially wasteful and it plants the seeds of resentment in the minds of the


 Allows wealth managers to monitor threats and opportunities posed by their main

 Helps plan products and services by giving key information on customer’s financial

services preferences.
 Looks at the onshore liquid wealth of mass affluent and high net worth individuals in

India and in India's largest and most affluent states.

 Offers access to key statistics providing a clear picture of the scale, composition and

direction of the developing landscape on a regional basis.

 Find out why India is an attractive market and its advantages over other emerging


1. Newspaper
a. Economic Times
b. Business Standard
c. Business Line

2. Magazine
Business World (Issue: 25th July, 2005)

3. Research Reports
a. Research report by UBS Warburg
b. Report by Pictet Fund
c. Report of The President’s Working Group on Financial Markets on LTCM
(April 1999)
d. Report of Pricewaterhouse Coopers on the regulation and distribution of
Portfolio management. (May 2003)
e. Fund Manager Performance Evaluation: Macro-factor model vs Option-
based model Applied to Market Neutral and Long/Short Index Strategies
by Leila ZAIRI & Nikoletta SIDERI.
f. A Primer on portfolio management by William Fung and David A. Hsieh
g. Fund Style Allocation – A Risk Adjusted Fund of Hedge Funds
Perspective by Patrik Adlersson and Patrik Blomdahl
h. DEMOCRATIZING THE mutual fund FUND: Considering the Advent of
Retail Hedge Funds by Donald E. Lacey, Jr.

4. Websites


Name : ______________________ Age : __________

Occupation: __________________ Sex : __________

Annual Income :_______________City: ____________

1. What is your objective behind investments?

(b) Safety of Capital (b) Retirement

(c)Beating inflation (d) Tax Minimization

(e) Liquidity (f) Growth of Capital-Returns

(g) Others (please specify)____________________

2. What is your practice on saving money?

(a) I don’t believe in saving.

(b) I’d like to save, but my expense & financial commitments do not permit me.

(c) I try to save whenever & wherever possible.

(d) I always save some percentage of my take-home salary without exception.

(e) Others (please specify)__________________________________________

3. How much thought have you given to saving for retirement?

(a) Very little (b) Some

(C) A lot (d) None

4. Do you plan your investments?

(a) Yes

(b) NO,

5. How do you take financial decisions?

(a) Independently (b) Advise from friends/relatives

(c) Broker (d) Advise from a Chartered Accountant

(e) Advise from a Bank (f) Financial Advisors

(g) Others (Please specify)_____________________________

6. Are you aware about the concept of wealth manager or financial Advisors?

(a) Yes (b) No

7. Do you currently avail financial advisor services/private banking services?

(a) Yes

(b) No,

8. If yes, from whom?

(a) ICICI Bank (b) CITI Bank

(c) HDFC Bank (d) Allegro Capital Advisors,

(e) Bajaj Capital (f) HSBC Bank

(g) YES Bank (h) Religare

(i) Others (Please specify)________________________

9. What are the products you are getting from your service provider ?

(a) Mutual Funds (b) Initial Public Offer (IPO)

(c) Secondary Market (d) Post Office Schemes/Debt

(e) Insurance (f) Real Estate/ Property

(g) Tax Planning (h) Loans

(i) Administrative Services (j) Gold

(k) Art/Paintings

(l) Others (Please specify)________________________

10. Allocate points ranging from 0 to 4, you would give to the following parameters

according to the level of importance you will/have give/given while going for a financial

advisor, where 0 conveys indifference to the factor and 4 showcase absolute importance.

Absolute Very Important Least Indifference

Parameters importance Important Important
(4) (3) (2) (1) (0)
Brand Name
Overall Services

11. The charges taken by your wealth manager are

(a) Reasonable (b) Costly

12. What is your total annual income before taxes?

a) Less than 10 lakh
b) 10 lakh to 25 lakh
c) Greater than 25 lakh

13.What percentage of your income do you generally save?

a) Less than 10%
b) 10% to 25%
c) Greater than 25%

14.What would you do if your portfolio GAINED 10% in few weeks?

a) Sell
b) Hold
c) Buy

15.In order to achieve your expected returns, you are willing to bear principal loss by?
a) 0%
b) 0% to 20%
c) More than 20%

16.What is your age?

a) 22 to 40 years
b) 41 to 45 Years
c) 46 to 54 Years
d) Greater than 54 Years