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Project on Portfolio Management
AIM OF THE PROJECT:
To construct a portfolio of capital Rs 1000000, keeping in mind the current Indian and global market scenario so as to maximize the returns within time horizon of 5 years.
Submitted to: Prof S S Nayak
Submitted by: Anurag Goel 09BS0000807
Anurag Goel -09BS000807 Portfolio Project
real estate). Purpose: The goal of portfolio management is to bring together various securities and other assets into portfolio that address investor needs. Portfolio management primarily involves reducing risk rather than increasing return. there are no limits to the heights of productivity that India can scale but creating a relatively decent standard of life for this overwhelming number of people. thereby creating one of the largest sub-continental economies in the developing world. Facts: India is the 14th largest economy in the world with a current GDP of USD 1.) or private investors.) and assets (e. squeezed into just 2. also taxes the public and governmental systems in ways that few countries can claim experience to. By 2015. corporations etc. is a classic example of the double-edged sword. bonds etc. and then to manage those portfolios in order to achieve investment objectives.1 trillion and is rapidly expanding.17 billion people.g. to the tune of USD 276 billion and will only increase them in the next two decades. 10. With a 625+ million strong working population. India has large forex reserves. it is expected that India’s GDP will hit the USD 2 trillion mark.2 |Page India Facts and Overview India. Investors may be institutions (insurance companies.000 so as to provide returns of 100% in next 5 years Anurag Goel -09BS000807 Portfolio Project .4% of the world’s land area..00. Aim: To construct a portfolio of capital Rs. Portfolio: It is the professional management of various securities (shares. pension funds. to meet specified investment goals for the benefit of the investors. home to 1.
Sethi Ayush Sethi Age 32 31 4 Annual Income Rs. Anurag Goel -09BS000807 Portfolio Project .3 |Page PROFILE Name Mr. 800000 Nil Risk bearing capacity: Objective: • • • • Long term investments Children plan Pensions Equity exposure Moderate Investment: Rs 1000000 P. 1200000 Rs. Sethi Mrs.a.
4 |Page ALLOCATION After considering the risk taking capacity of the investor.5 Anurag Goel -09BS000807 Portfolio Project .D Mutual funds Pension fund & Child plans Liquid funds Amount(Rs) 370000 225000 200000 60000 145000 Percentage(%) 37 22. the fund will be allocated to various assets classes in the following manner: Asset / Instrument Equity Bonds/F.5 20 6 14.
Growth drivers include a thrust on platform BPO. Software and services exports (including BPO) are expected to account for over 99 per cent of total exports.8 million employees. employment generation and value creation.5 |Page Equity Allocation Equity Stocks Infosys Axis Bank Hindalco Ind Ltd ACC Ltd.T Banking Steel Cement CMP(Rs) 3148 1324. Finance & Accounting. ADM. in addition to becoming the global brand ambassador for India. the Indian IT-BPO sector has become the country’s premier growth engine. and Cloud Services.79% 20 62960 29.64% 75 99308 49. The report estimates export revenues to gross US$ 50. Total equity Sector I. Over the past decade.7 billion of revenues.) Qty Amount(Rs) 28. Remote Infrastructure Management.2 per cent in 2011 as companies coming out of recession harness the need for information technology to create competitive advantage. and contributing 69 per cent of the total IT-BPO revenues.1 220 1077 Return (1 Yr.96% 50 53850 370118 IT SECTOR The Indian information technology (IT) industry has played a key role in putting India on the global map. crossing significant milestones in terms of revenue growth. Analytics. ‘IT-BPO Sector in India: Strategic Review 2010. Anurag Goel -09BS000807 Portfolio Project . with the IT software and services industry accounting for US$ 63. growing by 5.1 billion in FY2010. led by growth in the core markets and supplemented by significant contributions from emerging markets.26% 700 154000 23.4 per cent over FY2009.4 per cent in 2010. the industry will witness a healthy growth in 2010. NASSCOM said that the domestic IT-BPO is expected to grow by 15-17 per cent during FY11. and 4.1 billion in FY2010. IT services is expected to grow by 2. employing around 1. According to NASSCOM. increased IT spending by government and adoption of IT by SMBs.’ the IT-BPO industry is estimated to aggregate revenues of US$ 73. The annual survey on the outlook for FY10-11 said that the growth in the domestic IT-BPO spend is driven by a robust economy. According to a research report published by National Association of Software and Service Companies (NASSCOM).
Anurag Goel -09BS000807 Portfolio Project . It is projected that the sector has the potential to account for over 7. the banking sector index has grown at a compounded annual rate of over 51 per cent since the year 2001. setting up offices in foreign countries.06 million tonnes by 2011-12. as compared to a 27 per cent growth in the market index during the same period. Cement is a necessary constituent of infrastructure development and a key raw material for the construction industry. by themselves or through their subsidiaries. Further. STEEL SECTOR India is the 5th largest producer of steel in the world.6 |Page BANKING SECTOR The Banking sector in India has always been one of the most preferred avenues of employment. based on the status of MOUs signed by the private producers with the various State Governments. • The industry experts project the sector to grow by 9 to 10% for the current financial year provided India's GDP grows at 7%.5 million jobs. The total utilization of cement in a year is used as an indicator of economic growth. most of the leading Indian banks are going global. banks have diversified their activities and are getting into new products and services that include opportunities in credit cards. • India ranks second in cement production after China. Credit Suisse says that India’s steel sector will continue to grow by 16% annually until 2012 fuelled by demand for construction projects up to USD 1 trillion. consumer finance. In the current decade. pension fund regulation.7. wealth management. The Ministry of Steel has projected that the steel capacity is likely to be 124. life and general insurance. investment banking. Future Trends • The cement industry is expected to grow steadily in 2012-2013 and increase capacity by another 150 million tons in spite of the recession and decrease in demand from the housing sector. etc. this has emerged as a resurgent sector in the Indian economy. As per the McKinsey report ‘India Banking 2010’. CEMENT INDUSTRY The cement industry is one of the vital industries for economic development in a country. Also.7 per cent of GDP with over Rs. especially in the government’s infrastructure development plans in the context of the nation’s socioeconomic development. it is expected that India’s steel capacity would be nearly 293 million tonnes by 2020. and to provide over 1. custodian services. private equity. Today. stock broking services.500 billion in market cap. mutual funds.
by investing in LIC infrastructure bonds this financial year. Exit options: Buy back or through Demat account Open for Individual or HUF. Amount Invested: Rs 125000 Fixed Deposit The investor is advised fix deposit of Rs 100000 and maintain a balance of Rs 100000 in his bank account.000 Tax Exemption under Section 80CCF. Anurag Goel -09BS000807 Portfolio Project . this will help for unforeseen circumstances in the future and also help in getting a return of around 8.2.a. Allocation LIC Infrastructure Bonds If you are tax payer then you can save more tax by investing in LIC Infrastructure Bond.000/.5% p.This will be over the Rs. Term: The infrastructure bonds will have a maturity of 10 years and lock-in period of 5 years.20.D. Any individual or HUF can invest in LIC’s Infrastructure Bonds Between Rs.000/.1 lakh deduction allowed under Section 80C. LIC infrastructure bonds not only offers capital safety but also offers fixed returns through ECS.85%-7. you can ask issuer (LIC) to buy back bonds Or you can trade these bonds in stock Exchange.5000 – Rs. Additional Rs. After lock in period is over.20.95% after tax. tax benefit example: If you are in highest tax payers bracket of 30% can save an additional Rs 6.7 |Page Bond/F. LIC Infrastructure Bond at Glance: • • • • • • Term: 10 years Minimum lock in period: 5 years Loan on Bond: After 5 years Interest Rate: 7.000 and if you happen to fall in the lower tax bracket then you can still save Rs.
96 as on Nov 30. Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Fund Size in Rs.Growth HDFC Monthly Income Plan-Growth Fidelity Tax Advantage fund . 2010 Fund Manager SIP STP SWP Expense ratio(%) Portfolio Turnover Ratio(%) Apoorva Shah .Div Total Amount(Rs) 76905 76905 48000 201810 Return 15. 1999 10 773. Open Ended Equity & Debt Growth May 27.8 |Page Mutual Fund Allocation Mutual funds DSP Blackrock Micro Cap Fund . Cr. 2.06% 12.08 250 Anurag Goel -09BS000807 Portfolio Project .50% 17.70% DSP Blackrock Micro Cap Fund – Growth Seeks to generate long term capital appreciation and current income from a portfolio constituted of equity and equity related securities as well as fixed income securities.
Shobhit Mehrotra .72 NA Fidelity Tax Advantage fund – Dividend The investment objective of the Scheme is to generate long-term capital growth from a diversified portfolio of predominantly equity and equity-related securities.00 25 Pension Funds & Child Plans Allocation Anurag Goel -09BS000807 Portfolio Project . 2010 Fund Manager SIP STP SWP Expense ratio(%) Portfolio Turnover Ratio(%) Sandeep Kothari . 2003 10 702. 1. Open Ended Equity Income/Dividend Feb 27.15 as on Nov 30. Cr. 2006 10 1294. Cr. Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Fund Size in Rs. Open Ended Debt Growth Dec 26. 2010 Fund Manager SIP STP SWP Expense ratio(%) Portfolio Turnover Ratio(%) Vinay Kulkarni. Type of Scheme Nature Option Inception Date Face Value (Rs/Unit) Fund Size in Rs.87 as on Oct 29. The Secondary objective of the scheme is to generate long term capital appreciation by investing a portion of the Scheme’s assets in equity and equity related instruments.9 |Page Hdfc monthly income plan – growth The primary objective of the Scheme is to generate regular returns through investment primarily in Debt and Money Market Instruments. 2.
Thus it would be a very beneficial investment based on liquidity and returns. In case of SBI Unit Plus II Pension Plans.CHILD FUTURE PLAN Introduction: This plan is specially designed to meet the increasing educational. Options: You may choose Sum Assured (S. 7 years after the expiry of policy term). Policy Term. Anurag Goel -09BS000807 Portfolio Project . A number of Survival benefits are payable on surviving by the life assured to the end of the specified durations.a. Investment in SBI Life Long Pension Plans helps you avail tax deduction of up to Rs. bond or money pension funds. Premiums may be paid either for 6 years or upto 5 years before the policy term. it is a very liquid security and has been appreciating over many years.).10 | P a g e SBI Retirement Plan (pension fund) Under SBI Horizon II Pension Plan. minimum guaranteed returns and tax-free withdrawals of up to 33 % from the Personal Pension Account. It provides the risk cover on the life of child not only during the policy term but also during the extended term (i. top up payments and customize the plan by addition of riders. The investment plans also vary according to the proportion of money invested in equity funds. Amount: Rs 27000 Liquid Fund Allocation GOLD: The amount to be invested in gold would be Rs 100000. marriage and other needs of growing children. quarterly or through Salary deductions over the term of policy.A. Mode of Premium payment and Premium Waiver Benefit. you get to choose between pure pension and pension cum life cover plans with flexibility to increase regular contributions. Maturity Age. Amount: Rs 33000 LIC.a. Payment of Premiums: You may pay the premiums regularly at yearly. with 4 % p. 1. your money is invested in equity. The amount to be kept on hand would be Rs 45000. half-yearly. 000 p. Gold prices increased approximately by 30% in the current year.e. 00. CASH: It is very important to maintain certain amount of cash in hand in order to cope up with unforeseen circumstances that can arise over a period of time.
Anurag Goel -09BS000807 Portfolio Project .92 *The return for Gold is estimated using a very conservative approach The return calculated for the period of 1 year is estimated to be 19. However the return is not guaranteed. Mutual Fund Gold* Total Return 136323 18163 29690 15000 199176 % Return 36. the return expected is 148%.83 8. Considering the CAGR for the period of 5years.71 15 19.92%. it is totally based on the market scenario over the time horizon.D.07 14.11 | P a g e Total Return Asset / Instrument Equity Bond/F.
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