SECURITIY ANALYSIS AND PORTFOLIO MANAGEMENT

INVESTMENT PORTFOLIO ASSIGNMENT

Group Members:
Sanchit Kaushal (2K19/BMBA/14)
Namrit Mehta (2K19/BMBA/11)

Given Information:

 Name: Chetna
 Age: 45
 Gender: Female
 Marital status: Single parent
 No. of dependants: 1 parent and 1 kid
 Children: 1
 Income: 40LPA
 Investment Horizon: Medium term (5-6 Years)
 Likely savings: 30%

Amount investing = 30% of 40 lakhs = Rs 12,00,000 (12 lakhs)

STEP-1: Picking Asset class and estimated investment in each.

 Asset Class: A group of investments that generally behave in the same manner. They have similar
characteristics, similar regulations. There are many classes but let’s consider the main 2 here: -

a) Fixed Income
b) Equities

 Asset Allocation:

As you can see in the hypothetical example below which takes 100% equity allocation in one case and
100% fixed income allocation in other, that Equity investment are pretty dynamic and risky in nature but
gives nice returns. On the other hand, Fixed income is static and riskless in nature but the returns are very
low and when you count inflation, they are even less (in some cases negligible).
 Asset allocation for Chetna:

1.) Fixed Income: debt

40% allocation = Rs 4,80,000

2.) Equities/stocks: ownership/ shares of companies, etc.

60% allocation = Rs 7,20,000

Asset Allocation

Equities
40%
Fixed income
60%

Since Chetna roughly got 10 years before retirement and also got a kid and parent to take care
of, she should avoid too much of a risk-oriented portfolio. The ideal allocation for her should
be 40/60 allocation between Fixed income (low risk, low returns) and Equities (high risk, high
returns).
STEP-2: Securities under each asset class.

1. Equities/Stocks:

Blue chip stocks, Mid cap stocks, Small cap stocks

 20% allocation in emerging markets: Rs 1,44,000

 30% Foreign Developed Equity: Rs 2,16,000
 50% India Equity: Rs 3,60,000

Securities under Equity

20%
Emerging Markets
Foreign Developed Equity
India Equity
50%

30%
2. Fixed Income:

 Government bonds with 7 years maturity period (70%): Rs 3,36,000

 Fixed deposit (30%): Rs 1,44,000

Securities under Fixed income

30% Government Bonds

Fixed deposit

70%