GEOGIT BNP PARIBAS PVT LTD

Submitted in the partial Fulfillment of the Requirement

Of

T.Y. B.B.A. (sem-VI)

Submitted By
BELDAR PRADIP ADHAR
PRN No: - 334333150013
E-mail : pradipbeldar34@gmail.com
Mo No: 7350893293

www.mjcollege.kces.in

K.C.E Society’s
Moolji Jaitha College (100001), Jalgaon.
NAAC Re0Accredited “A” Grade (with CGPA 3.63)
UGC honoured “College with Potential for Excellence”
ISO 9001:2008 Certified

Academic Year - 2015-16

Guided By:
Prof. Pradip Joshi Sir

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 K.C.E. Society’s
MOOLJI JAITHA COLLEGE, JALGAON
NAAC Re0Accredited “A” Grade (with CGPA 3.63)
UGC honoured “College with Potential for Excellence”
ISO 9001:2008 Certified
Faculty of Commerce and Management
Professional Management
~~~Certificate~~~
This is to Certify that Beldar Pradip Adhar’s a
bonafide student of M.J.College, Jalgaon and he/she has
completed the project, titled Port Folio Mananagement
under my guidance in partial fulfillment of the
requirement for the Degree of “Bachelor of Business
Administration” for the year 2015-2016 of North
Maharashtra University, Jalgaon.

Project Guide Co-Ordinator

External Examiner External Examiner

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 ACKNOWLEDGEMENT

I have great pleasure in submitting this project on Port folio

management to North Maharashtra University Jalgaon.

It is humble brief that any project work cannot be carried out with success
by a single person. Many other personalities helped met accomplished this
project and it is my duty to express my gratitude to them.

I would also like to thank my advisor Prof. Pradip Joshi Sir, for her
guidance, help, efforts & suggestion. Really I am thankful to her. Without her
direct guidance this report could not be possible

I wish to thank the teaching staff, my friends and persons who help me
directly or indirectly for completion of project.

Beldar Pradip Adhar

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 INDEX

SR. NO. TOPICS PAGE NO.

1. Acknowledge ment 3

2. Executive Summary 5

3. Company Profile 7

4. Objectives 12

5. Research Methodology 14

6. Introduction to Investments 17

7. Portfolio Manage ment 22

8. Investment Avenues 32

9. Virtual Portfolio 36

10. Findings 39

11. Suggestions 42

12. Limitations 44

13. Conclusions 46

14. Bibliography 48

15 Annexure 50

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EXECUTIVE SUMMARY

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 EXECUTIVE SUMMARY

The project at GEOGIT BNP PARIBAS. i.e. “Portfolio Management Services” helps the

individual investors in constructing a portfolio from the funds they want to put in the various

securities or financial instruments that are available in the market.

This project is divided into three phases

1) The first part emphasizes on the entire methodology of my study the parameters kept in

the mind while designing of the report, various sources of data collection. Also

company’s detail, objective of project etc in detail is done.

2) Then second part emphasizes on an introduction to investments need for financial

planning what is a “Portfolio Management Service”. The objective of portfolio is to

diversify risk, the various investment avenues and product offered in PMS along with its

objective and advantages. The report emphasizes on portfolio management & the types of

portfolio and various activities of portfolio management.

3) Then in the third part there is an example of virtual designed portfolio. It also consists

of my learning’s from the project and few suggestions for the organization which I feel

will be useful for them in improving their services even further. This phase of the project

talks about the final CRUX of the report under the name of conclusion, it talks all about

the findings and my beautiful experience with “GEOGIT BNP PARIBAS LIMITED”.

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COMPANY PROFILE:

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 COMPANY PROFILE

Geojit BNP Paribas Financial Services was founded as a partnership firm by C J George
and Ranajit Kanjilal in 1987. Later in 1993 Ranajit Kanjilal retired from the firm. In 1995 Kerala
State Industrial Development Corporation acquired 24% stake in the company.

Geojit is a charter member of the Financial Planning Standards Board of India and is one of the
largest DP brokers in the country.

It has entered into a joint venture to form Barjeel Geojit Securities LLC, Dubai in order to cater
financial services in gulf countries.

With a presence in almost all the major states of India, the network of over 540 offices across
300 cities and towns presently covers Andhra Pradesh, Bihar, Chattisgarh, Goa, Gujarat,
Haryana, Jammu & Kashmir, Karnataka, Kerala, Madhya Pradesh, Maharashtra, New Delhi,
Orissa, Punjab, Rajasthan,Tamil Nadu & Pondicherry, Uttar Pradesh, Uttaranchal and West
Bengal.

Geojit provides quality services in equity trading through its network of over 450 branches in.

It has various subsidiary namely Geojit Commodities engaged in commodity trading, Geojit
Credits is a Non Banking Financial Company, Geojit Technologies is into software development
and services and Geojit Financial Distribution is engaged in insurance referrals and Geojit
Financial Management.

Products and services

The company offers wide range of investments options in equity, futures and options, IPOs and
mutual funds. The company offers clients daily SMS alerts, market pointers, periodical research
reports, stock recommendations and customer meets organized frequently.

It also has online services named Classroom for new investors providing basic information about
all investment avenues.

History of Geogit BNP Paribas

 1986 – C. J. George became member of Cochin Stock Exchange

 1987 M/s C. J. George and Co. was set up at Ravipuram, Cochin
 1988 Company was renamed at M/s Geojit & Co.
 1994 Becomes a Public Limited Company named Geojit Securities Ltd.
 1995 Kerala State Industrial Development Corporation Ltd. (KSIDC) acquires 24 percent
equity stake.Membership in National Stock Exchange (NSE). Public Issue.
 1996 Launch of Portfolio Management Services with SEBI registration.
 1997 Depository Participant (DP) under National Securities Depository Limited
 1999 Membership in Bombay Stock Exchange (BSE).

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  2000 BSE Listing.1st broking firm in India to offer online trading facility.
Commences Derivative Trading with NSE.
 Integrates the 1st Bank Payment Gateway in the country for Internet Trading.
 2001 Becomes India's first DP to launch depository transactions through Internet.
Establishes Joint Venture in the UAE to serve NRI customers.
 2002 1st in India to launch an integrated internet trading system for Cash & Derivatives
segments.
 2003 Geojit Commodities Limited, wholly owned subsidiary, launched Online Futures
Trading in agri–commodities, precious metals and in energy futures on multiple
commodity exchanges.National launch of online futures trading in Rubber, Pepper, Gold,
Wheat and Rice.Company renamed as Geojit Financial Services Ltd.
 2004 National launch of online futures trading in Cardamom.
 2005 NSE Listing. Geojit Credits, a subsidiary, registers with RBI as a Non Ba nking
Financial Company (NBFC).National launch of online futures trading in Coffee.
 2006 Charter member of the Financial Planning Standards Board of India.
 2007 BNP Paribas takes a stake in the company’s equity, making it the single largest
shareholder.
Establishes Joint Venture in Saudi Arabia to serve the Saudi national and the NRI.
 2008 BNP Paribas Securities India (P) Ltd. – a Joint Venture with BNP Paribas S.A. for
Institutional Brokerage.
1st brokerage to offer full Direct Market Access execution in India for institutional
clients.
 2009 Launch of Property Services division.
Launch of online trading in Currency Derivatives.
Consequent to BNP Paribas becoming the largest stakeho lder in Geojit BNP Paribas,
company is renamed as Geojit BNP Paribas Financial Services Ltd.
 2010 Launch of FLIP(Financial Investment Platform), a new advanced online investment
platform.Launch of state of the art Mobile Trading platform to empower clients to trade
from anywhere, even while on the move through the innovative application FLIP– ME.
Barjeel Geojit Securities, its joint venture with the Al Saud group is headquartered in
Dubai, in the United Arab Emirates, and owns branches in Abu Dhabi, etc.

Role of GEOGIT BNP PARIBAS

 Interface between the stock exchange and the investor.

 Assistance to investors in precise allocation of funds.
 Building awareness amongst general public about stock market

Geogit BNP Paribas Limited is a retail financial services provider with a focus on Equities,
Derivatives and Commodities, Brokerage execution on the National Stock Exchange of India
Ltd. (NSE), Bombay Stock Exchange Ltd. (BSE), National Commodity and Derivatives
Exchange India (NCDEX) and Multi-Commodity Exchange of India Ltd. (MCX).

Geogit BNP Paribas provides trade execution services through multiple channels - an Internet
platform, Telephone and Retail Outlets and is present in 300 cities through a network of 450
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locations. Geogit BNP Paribas covers the entire spectrum of financial services such as Stock
broking, Depository Participants, Distribution of financial products like Mutual Funds, Bonds,
Fixed Deposit, Merchant Banking and Corporate Finance, Insurance Broking, Commodities
Broking, Personal Finance Advisory Services, Placement of Equity, IPO’s, among others

A GEOGIT BNP PARIBAS outlet offers the following services:

 Online BSE and NSE executions (through BOLT & NEAT terminals).
 Free access to investment advice from Geogit BNP Paribas Research team.
 Geogit BNP Paribas Value Line (a monthly publication with reviews of
recommendations, stocks to watch out for etc).
 Daily research reports and market review (High Noon & Eagle Eye).
 Pre-market Report (Morning Cuppa).
 Daily trading calls based on Technical Analysis.
 Cool trading products (Daring Derivatives and Market Strategy).
 Personalized Advice.
 Live Market Information.
 Depository Services: Demat & Remat Transactions.
 Derivatives Trading (Futures and Options).
 Commodities Trading.
 IPO’s & Mutual Funds Distribution.
 Internet-based Online Trading: Speed Trade.

MEMBERSHIP:

 Cash Market : NSE, BSE

 Derivatives : NSE, BSE
 Commodities : NCDEX, MCX,NSE

PRODUCTS & SERVICES

 Trading (Equity/Derivative/Commodity)
 IPOs
 Depository Services
 Arbitrage
 Margin Financing

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 Mutual Funds
 Online Trading

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OBJECTIVES OF THE STUDY:

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OBJECTIVE OF PROJECT

The main objective of this project is to know the Awareness of Financial Instrument
among investors and also to know the investing pattern of people in different Financial Project.
The project with Geogit BNP Paribas has been full of learning and sense of contribution
towards the organization.

My project on “Portfolio Management Services” is meant to study the nature of

different investment instruments available in the market and then finally suggest the same to the
clients in the form of a structured product. I do this by suggesting the investor as to go for which
all investments that can fetch out real good returns to them in future, as per their risk appetite
regarding the investments and their needs. I suggest them the investments that they can opt for
and the one’s which can bring a huge value addition to their portfolio.

According to the study of the markets, it is being observed that there are lots of financial
instruments are available in the markets and some of them are really doing well. In near future a
proper financial planning is required to invest money in all type of financial product because
there is good potential in market to invest.
In this project the great emphasis is given to the investor’s mind in respect to investment
where he can maximize his wealth. The needs and wants of the client are taken into
consideration.
More emphasis has been given for the study of the project because it is the only field
where all type of Age group, Income class and different level of people are represented and
accordingly their approach towards the market.

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RESEARCH METHODOLOGY:

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 METHODOLOGY OF STUDY

Research can be defined as a systemized effort to gain new knowledge. A research is

carried out by different methodologies which have their own pros and cons. Research
methodology is a way to solve research in study and solving research problems along with logic
behind them are defined through research methodology. Thus while talking about research
methodologies we are not only talking of research methods but also consider the logic behind the
methods. We are in context of our research studies and explain why it is being used a particular
method or technique and why the others are not used. So that research result is capable of being
evaluated either by researcher himself or by others.

RESEARCH METHODOLOGY

Research has its special significance in solving various operational and planning
problems of business and industry. Research methodology is a way to systematically analyze the
research problem.

I have executed the project after prior discussion with our guide and structured in the following
steps:

a. Preparation of a questionnaire
b. The focal point of the designing the questionnaire was to comprehend the current
investment scenario with respect to tax planning part.
c. This questionnaire was primarily aimed to respondents who belong to the service and
business class people
The questionnaires were discussed through personal interface with the respondents.

ASSUMPTIONS:

1. It has been assumed that sample of hundred represents the whole population.
2. The information given by the customer is unbiased.

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Development of Working Hypothesis

The hypothesis could be developed by discussing with the consulting department heads and
guides about this exploratory research and reach to the conclusion that the data is to be collected
by personal interaction with the clients, asking them about their investment planning and their
need for financial advisory service from Geogit BNP Paribas

First of all are they aware of tax and investment planning or not and then analyzing the
findings to reach to the objectives of research.

Sources of Data:

PRIMARY DATA

This research is solely based on primary research done by means of questionnaires

targeted to respondents who primarily belong to the business and service sector.

It is very essential in the research process to know the accuracy of the finding’s which depends
on how systematically the study has been carried out so that it can make sense.

The data required for the project was about the customers and therefore this data was a
confidential for the company.

SECONDARY DATA

Secondary data is a data that has been collected earlier for some purpose other than the purpose
of the present study. I have collected data by referring book and websites for carrying out my
project from .

Also, secondary data can be a useful benchmark against which the findings of the study
can be tested. This study is highly dependent on the secondary data for various facts and figures.

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INTRODUCTION TO INVESTMENTS

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 INTRODUCTION TO INVESTMENTS
INVESTMENTS

WHY invest: We work hard so that we can live life to its fullest. Most of us spend more
than half of our lives working and saving because money is essential. In fact, to most of us it is
the driving force of our life. The reasons why we invest are primarily for tax-saving purposes.
Although, this may not be incorrect, it is true that one needs to analyze various factors before
putting the hard-earned money into any type of investment. A proper planning is crucial to make
your how to invest money work effectively at later stages of your life.

Identify your goals: Our goals in life may be plenty (owing a house, providing the best
education to children, supporting family with the best amenities, holidaying, etc). And of course,
last but not the least is to save how to invest for those retirement days. Prioritize your goals.
Make a note of when you would like to achieve them. We learn about a few smart ideas on how
to increase your net worth and not affect your needs too.

How to invest and whe re: The right time to learn how to invest is when you have
identified at what stage in life you would require how much funds. It is human tendency to be
affected by greed and fear. Greed makes us invest without thinking twice. One may land being a
loser when the desire to get more for less creeps in. When fear strikes, one dreads to even take
normal investment risks. Due to this, one may lose on opportunities while investing in the
market.

Handling risk: Know what is your risk appetite. All investments carry some risk. Risk
and return are two sides of the same coin. Investments with the potential for the biggest returns
are associated with the highest risk (of losing money).

Remembe r: your age, family situation, income and goals can all influence the amount of
risk you wish to take. In general, the younger you are you have more time to recover from any
loses if at all. The older you are or the closer to needing the money, the more conservative you
may become and be reluctant to take risks. Once you know your goals and your comfort with
risk, you can decide what type of portfolio is right for you. (A portfolio is simply a collection of
different kind of investments).

For example, if you are young, aggressive and have plenty of time before you plan to use money
from your investments, you might allocate 70 to 100 percent of your portfolio to stocks and stock
mutual funds. If you're more conservative, you might allocate 50 percent to stock mutual funds,
40 percent to bond funds and the rest to cash equivalents.

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 When to start Investing: The sooner one starts investing the better. By investing early investor
allow his investments more time to grow, whereby the concept of compounding increases income, by
accumulating the principal and the interest or dividend earned on it, year after year.

The three golden rules for all investors are:

 To Invest early,
 To Invest regularly,
 To Invest for long term and not short term.

Why Financial Planning is neede d?

This can be explained by very simple example. Assume a person is 40 years old and
will require 70% of his current annua l income for each of the 15 years expect to live after
his retirement. He wants to retain his purchasing ability after certain age.

In this case he will have to plan his finance and hence the terms portfolio and portfolio
manage ment come in picture

Investors should periodically review their asset allocation across different assets as the portfolio
can get skewed over a period of time. This can be largely due to appreciation/depreciation in the
value of the investments.

For example : an investor who had invested Rs. 70 into equities and balance in income funds in
June 2004. During last one year, the BSE Sensex has moved up by 41% while the income funds
have grown by 1%. As of end May 05, the equity asset allocation would be 67% into equities and
rest into debt - equity exposure would have gone up by 7% (due to appreciation in stock indices).
An investor who wants to keep the allocation at 60% should reduce the exposure in equities and
shift to debt.

As the financial goals are diverse, the investment choices also need to be different to
meet those needs. No single investment is likely to meet all the needs, so one should keep some
money in Geogit BNP Paribas deposits and / liquid funds to meet any urgent need for cash and
keep the balance in other investment products/ schemes that would maximize the return and
minimize the risk. Investment allocation can also change depending on one’s risk-return profile.

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Investment Guidelines
Investment in general is defined as use of money with an intention of making more
money or profit. The use of money could be in many ways like purchase of property, purchase of
vehicles, investing in financial assets like mutual funds, government securities and so on. The
ultimate aim of all investments would be to earn a sum as profit which is called as the return on
investment

The idea of investing in various options is a result of demand, where in one person would
be in need for money and the other person who has sufficient money is interested in making
some profits out of the same. It is interesting to know that how these two people with a matching
demand and supply meet. And the process is being made easier now a days with various
investing in India consultants booming down very lane and all major Geogit BNP Paribas
competing with one another to give investment advice to their customers

Going further into the investing in India options available the points that any individual
would be looking at the return on investment, the time period involved and the authenticity of the
return. By rate of return we would mean the percentage of profit that we would be getting on the
amount invested.

A simple example for this –

Let’s assume X invests Rs.100 in a Geogit BNP Paribas Deposit for 365 days and at the end of
365 days he gets back Rs.108. in this case the rate of return would be 8% per annum, the time
period involved in this investment in 365 days and the authenticity of the return would be the
certificate given by the Geogit BNP Paribas for the investment that you make. Best advice
would be that before we go in make some investments the points to ponder would be your risk-
appetite and investment objective. Risk would be high on market and economy related
investments where as on the contrary there would be completely NIL risk in government
securities. The return would be nominal in Government securities and high in market related
investments.

Drilling down on the topic of investing in India options in India the areas that are most
opted for sorted on the level importance would be real estate for long term investments and
mutual fund investments, stock market investments, Fixed return Government securities for short
term investments.

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Benefits of investing at an early age

It’s known that inflation eats into savings. Investing early in life can help you:

Beat inflation- Inflation is the tendency of prices to rise over time giving your money
less buying power each year. Therefore if you invest your money wisely, you might earn returns
that match or beat the rate of inflation. You shall reap the benefits during your retirement years
(the time period when one does not wish to compromise too much on the standard of living).

Benefit from compounding- Compounding is when an investment gives you returns on

the money you originally invested as well as on the returns you have gained so far from that
investment. For example, imagine you invest $1,000 into an investment that gives you a 5
percent rate of return each year. Year on yea r, you would get a 5 percent return on both your
original $1,000 and on the other returns you've earned so far. Elaborating on this, lets review the
following-

In one year, you would have $1,050 ($1,000 plus 5 percent, or $50).

In two years, you would have $1,102.50 ($1,050 plus 5 percent, or $52.50).

And in 25 years and you would have $3,481.29 (without investing a penny after the original
$1,000).This is the magic of compounding wherein you triple your money in 25 years.

Mistakes investors should never make while investing

 Thinking that customer should have loads of money to invest. It is in fact the other way
round. One can start investing with a just small amount and the earlier you start, the more
time your money has to compound and grow.
 Investing for shorter duration because customer do not want your money to be lying
somewhere else. Remember, investing for the long term (five years or longer) can not only
help you how to invest meet a range of different goals, it gives your portfolio time to
recover from any losses in the market.
 Selling investments in a panic when the market is down or rush to buy "hot" investments
unless they truly suit your long-term goals.
 Trading too much is not advisable. If your portfolio has high turnover you could face high
trading costs and capital gains taxes.
 Investing money to avoid taxes. One should be aware of the tax implications of their
actions, but the first objective should always be to make a fundamentally sound investment
decision.

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Ignoring return calculations. Always calculate the post-tax effective yield for each investment
made.

INTRODUCTION TO PORTFOLIO
MANAGEMENT

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 INTRODUCTION TO PORTFOLIO MANAGEMENT
First, a definition of portfolio in the IBM view, a portfolio is:

... One of a number of mechanisms, constructed to actualize significant elements in the

Enterprise Business Strategy.

It contains a selected, approved, and continuously evolving, collection of Initiatives

which are aligned with the organizing element of the Portfo lio, and, which contribute to the
achievement of goals or goal components identified in the Enterprise Business Strategy.

The basis for constructing a portfolio should reflect the enterprise’s particular needs. For
example, you might choose to build a portfolio around initiatives for a specific product, business
segment, or separate business unit within a multinational organization.

Portfolio management is the process of managing money, including investments,

budgeting, Geogit BNP Paribas Securities Sing and taxes. The portfolio management process
involves formulating, modifying and implementing a real estate investment strategy in light of an
investor's broader overall investment objectives. It also can be defined as the management of
several properties owned by a single entity.

It is the art and science of making decisions about investment mix and policy, matching
investments to objectives, asset allocation for individuals and institutions, and balancing risk vs.
performance

The aim of Portfolio Management is to achieve the maximum return from portfolio,
which has been delegated to be managed by an individual manage r or financial institution.
The manager has to balance the parameters which define a Good investment i.e. security,
liquidity and return. The goal is to obtain the highest return.

The relationship between risk and return is one of the essential concepts to understand
when investing and it is unique for every investor, the personal risk tolerance could be influenced
by current world events, investments experiences even your inherited views on saving and
investing r the client of the managed portfolio.

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 ADVANTAGES OF PORTFOLIO MANGEMENT

(1) Individually managed accounts: Provides a flexible format for optimizing returns through
effective fund management.

(2) Customize d portfolios: Tailor- made investment strategies to suit individual requirements.

(3) Individually managed accounts: Provides a flexible format for optimizing returns through
better information support/client servicing regular investments disclosures make the investor feel
comfortable and in control of his money.

(4) Supportive tax structure: Tax changes support rise in equity, there is a cut in capital gains
tax on listed equities:

i. NIL for holdings greater than 12 months

ii. 10%(from 30%) for holdings less than 12 months

(5) SEBI regulated: A regulated industry makes the investor feel comfortable with the
investments techniques adapted to optimize returns.

SCOPE OF PORTFOLIO MANAGEMENT

The portfolio management is vast in nature. It is intended to provide a bird’s- eye

view of the client’s assets. The portfolio manager has to have bottomless knowledge of
markets, funds etc. Considering this fact, the scope of the portfolio is defined to satisfy
following objectives:

 Study and compare various investment and attributes

 Understand the necessity of portfolio management
 Study and apply the portfolio management process
 Understand client’s desires, investment potential and risk taking approach
 Identify various investment alternatives that can fit in client’s profile
 Provide the client an appropriate asset allocation mix based on certain factors
like time horizon, risk tolerance etc.
 Regularly monitor client’s portfolio and take corrective actions if essential

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 Attain the investment objective by strengthening the client’s portfolio in the
best possible way

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OBJECTIVES OF PORTFOLIO MANAGEMENT

1 .Safety Of Fund: The investment should be preserved, not be lost and remain in the returnable
position in cash or kind

2. Liquidity: Portfolio must consists of such securities which could be en cashed without any
difficulty or involvement of time to meet urgent need for funds.

3. Reasonable return: The investment should earn a reasonable return to up keep the declining
value of money and must be compatible with opportunity cost of money in terms of current
income in the form of interest or dividend.

4. Appreciation in Capital: The money invested in portfolio must grow and result into capital
gains.

5. Tax planning: Efficiently portfolio management is concerned with composite tax planning
covering income tax, capital gains tax , wealth tax, and gift tax.

6. Minimize risk: Risk avoidance and minimization are important are most important objectives
of portfolio management. Portfolio managers must ensure these objectives by effective
investment planning and periodical review of market, economy etc.

7. Marketability: The investment made in securities made in securities should be marketable

that means , the securities must be listed and traded in stock exchange so as to avoid risk and
difficult in their encashment . Marketability ensures liquidity to the portfolio.

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 Types of Portfolios
Aggressive Portfolio

Aggressive Portfolio consists almost entirely of equities. As such, with a very aggressive
portfolio, your main goal is aggressive capital growth over a long term horizon. Since these
portfolios carry a considerable amount of risk, the value of the portfolio will vary widely in the
short term. This strategy might be appropriate for investors who seek High growth and who can
tolerate wide fluctuations in market values, over the short term.

Growth Portfolio

Growth portfolios mainly consist of equities, so these portfolios’ value tends to fluctuate
widely. If you have an aggressive portfolio, your main goal is to obtain long term growth of the
capital. As such the strategy of an aggressive portfolio is often called a “capital growth”
strategy. To provide some diversifications, investors with aggressive portfolios usually add some
fixed- income securities. This strategy might be appropriate for investors who have a preference
for growth and who can withstand significant fluctuations in market value.

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Balanced Portfolio

Balanced portfolio are often referred as “Moderately Aggressive portfolios” since the asset
composition is divided almost equally between fixed- income securities and equities in order to
provide a balance of growth and income.

Since these moderately aggressive portfolios have a higher level of risk than those conservative
portfolios mentioned above, select this strategy only if you have a longer time horizon (generally
more than five years), and have a medium level of risk tolerance. This strategy might be
appropriate for investors who want the potential for capital appreciation and some growth, and
who can withstand moderate fluctuations in market values

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Conservative Portfolio

These types of portfolios generally allocate a large percent of the present portfolio to lower risk
securities such as fixed-income and money market securities. The main goal with a conservative
model portfolio is to protect the principal value of your portfolio. As such these models are often
referred to as “Capital Preservation portfolios”.

Even if they are very conservative and prefer to avoid the stock market entirely, some exposure
can help offset inflation. They could invest the equity portion in high quality blue chip
companies, or an index fund, since the goal is not to beta the market. This strategy may be
appropriate for investors who want to preserve their capital and minimize fluctuations in market
value.

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 INVESTMENT STRATEGY IN PMS

(1) Focus on select/clear stock opportunities: Investments in stocks where there is a clear
earnings visibility.

(2) Relatively concentrated portfolio: A portfolio composition of not more than 25-30 stocks
of what there are compelling opportunities.

(3) Usage of derivatives as a tool: One must have a selective use of derivatives in various
options to enhance returns/portfolio protection.

(4) Flexible cash allocation strategy: We have an efficient allocation among assets with
flexibility to sit on 100% cash.

The Portfolio Structure

A portfolio structure identifies and contains a number of portfolios. This structure, like
the portfolios within it, should align with significant planning and results boundaries, and with
business components. If customers have a product-oriented portfolio structure, for example, then
you would have a separate portfolio for each major product or product group. Each portfolio
would contain all the initiatives that help that particular product or product group contribute to
the success of the enterprise business strategy.

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The Portfolio Manager

This is a new role for organizations that embrace a portfolio management approach. A
portfolio manager is responsible for continuing oversight of the contents within a portfolio. If
you have several portfolios within your portfolio structure, then you will likely need a portfolio
manager for each one. The exact range of responsibilities (and authority) will vary from one
organization to another one, but the basics are as follows:

 One portfolio manager oversees one portfolio.

 The portfolio manager provides day-to-day oversight.
 The portfolio manager periodically reviews the performance of, and conformance to
expectations for, initiatives within the portfolio.
 The portfolio manager ensures that data is collected and analyzed about each of the
initiatives in the portfolio.

How the Portfolio Management Service works

Investors sit down with one of the advisers and discuss exactly what they are trying to
achieve; whether it is income, growth or a combination of the two, the level of risk with which
you feel comfortable and whether service is appropriate for them.

If investors decide to precede the portfolio will then be managed by specialist investment
team, headed by who look over the portfolios constantly, reacting instantly to changes and taking
investment decisions on your behalf.

These decisions are based on many years of experience, a deep understanding of the
market and the latest, most comprehensive investment research. As everyone know, better results
almost invariably derive from better information, more experience and greater understanding.

What impact could this have on investors portfolio?

Five years ago Mr. Ramikbhai, after careful consideration, invested in funds he considered
right for his portfolio. Since then, some funds have under-performed and he has held on to them,
hoping they will do better. However, many of these funds will not recover and, with hindsight,
they should have been replaced when they started under-performing.

It is a common story. Many investors are emotionally attached to their decisions (we hate to feel
we are wrong) and others are too busy to stay fully informed or react swiftly.Every time your
funds under-perform, you lose in two ways; through the money you lose and the money you
could have gained elsewhere. A professional manager is impartial and does little else but watch
and consider what is happening in the markets so as to make what he thinks are the right
decisions faster.

31
INTERRELATIONSHIP AMONG VARIOUS PHASES OF PORTFOLIO

SPECIFICATION OF INVESTMENT OBJECTIVES AND

CONSTRAINT

CHIOCE OF MIX ASSETS

FORMUATION OF PORTFOLIO
STRATEGY

SELECTION OF SECURITES

PORTFOLIO EXECUTION

PORTFOLIO REVISION

PORTFOLIO EVALUATION

32
INVESTMENT AVENUES

33
 INVESTMENT AVENUES

INVESTMENT
AVENUES

PHYSICAL FINANCIAL
ASSETS ASSETS

MUTUAL FUND
LIFE SAVINGS AND
REAL ESTATE COMMODITIES AND STOCK BONDS
INSURANCE PPF SCHEMES
MARKET

Various options available for investment are:

Physical assets like Real Estate, Commodities etc.

Real estate market is something that is always glowing like the New York City. The
reason being that this market has very rarely seen a downslide. Real estate market in a common
man terms would mean dealing in property which would include purchase and sale of land and
building. It could be both commercial space and residential property. Commercial space would
mean the property that is purchased or occupied for business purposes by small to large
corporate houses. One undeniable reason why Indian real estate market has been a boom is due
to the increasing number of Multi National Companies thronging the Indian Land. The want for
space is always increasing with government in India giving additional concessions and
recognition to Corporate engaged in building IT parks and commercial complex.

The best thing about real estate business is that every investor is bound to end up with a sure
margin of profit though the amount of profit may vary based on our bargaining skills and the
need of the buyer. People also engage in speculative business by purchasing barren lands in
under developed areas for a very minimal cost and wait for couple of years till all necessary
infrastructure is developed in that locality and then sell the land at a huge profit. On the other
side residential properties are also on the increase. One main reason behind this being that the
Housing Development Corporation of India is promoting big Residential Buildings and all

34
Geogit BNP Paribas offer credit to customers for purchase of property. This way majority of the
population will end up owing a property. And icing on the cake is that the value of the property
is always down to increase and would never decrease as such we would be assured about our
share of profit

COMMODITIES futures are contracts to buy specific quantity of a particular

commodity at a future date. It is similar to the Index futures and Stock Futures but the underlying
happens to be commodities instead of Stocks and Indices. Commodity exchanges are regulated
by Forward Market Commission (FMC); Forward market Commission works under the purview
of the ministry of food, Agriculture and Public Distribution. Commodity prices are generally less
volatile than the stocks and this has been statistically proven. Therefore it’s relatively safer to
trade in commodities. Also the regulatory authorities ensure through continuous vigil that the
commodity prices are market- driven and free from manipulations.

Major Commodity Exchanges

The Government of India permitted establishment of National- level Multi-Commodity
exchanges in the year 2002 and accordingly three exchanges come in picture. They are:

 Multi-Commodity Exchange in India Ltd, Mumbai (MCX).

 National Commodity and Derivative Exchange of India, Mumbai (NCDEX).
 National Multi Commodity Exchange, Ahmadabad (NMCE).

However there are regional commodities exchanges functioning all over the country. Geogit
BNP Paribas Commodities Broking Pvt. Ltd has got membership of both the premier
commodity exchanges i.e. MCX and NCDEX.

Financial assets such as Fixed Deposits with Geogit BNP Paribas, Small Saving Instruments
with Post Offices, Insurance/Provident/Pension Fund, Mutual Fund etc. or Securities market
related instruments like Shares, Bonds, and Debentures etc.

Life Insurance is a contract for payment of money to the person assured (or to the person
entitled) depending on the event insured against. Payment of amount (depending on the type of
policy) is made on the date of maturity or at specified periodic intervals or at death (if it occurs
earlier). These policies involve periodical payment of insurance premium by the assured to the
corporation who provides the insurance.

Whatever combinations your portfolio may comprise of, but do get yourself and your family
insured.

35
 Savings Sche me and Public Provident Fund schemes promoted by Geogit BNP
Paribas. Under these options the rate of return is fixed and varies from 8% to 10%. The return is
paid in the form of interest usually half yearly / quarterly. The time period for investment ranges
from 1 year to 10 years and even more if the individual desires so. Another safe mode of
investment would be Geogit BNP Paribas deposits. Geogit BNP Paribas accept deposits from
customers in different denominations and for varied time periods and offer a return ranging from
5% to 9%. The longer the duration of your investment the higher would be the rate of return no
the same. In the current market Geogit BNP Paribas compete with one another to attract
customers by offering higher rates of interest.

Mutual funds and stock markets are the other arena where people can make profit. But
one major drawback to this option is its association with market conditions and the economy of
the country. The basic concept behind mutual funds is that one institution collects funds from
likeminded people by issuing mutual fund units and invests the funds in various outlets. At the
end of the time period the institution distributes the profit earned among its members. The
difference between the amount invested and the amount returned would be the profit for an
investor. The risk involved in this case is that in case the institution faces loss, then the same also
has to be shared by the members which might result in getting a sum less than what we had
actually invested. Though the stock market and mutual funds investments are subject to market
risks, still many young people believe in investing in such options because the yield is high in
such investing in India and the turnaround time is also very less. But word of caution is that you
need to be a real watch dog about the market conditions and must have the mind set to accept
losses and gains in the same frame of mind.

Bonds Individuals have surplus funds in the form of savings which they want to invest.
Companies need funds to undertake good projects with high returns. Companies provide
individuals with instruments to invest their savings in.

One such instrument is corporate bonds. Similarly, governments also need funds for various
developmental projects. Further, the government also needs to raise money to finance the fiscal
deficit. They too tap the savings by issuing various kinds of bonds.

36
VIRTUAL PORTFOLIO

37
 VIRTUAL PORTFOLIO
(OF Rs 10 LACS)

TOTAL AMT INVESTED IN SHARES = 642855 (17.09%)

AMT INVESTED IN MUTUAL FUND = 210000 (29.06%)

INTRADAY = 100000

OTHERS = 47145

TOTAL 1000000 (23.08%)

NO. OF TARGET
SCRIPT SHARES PRICE T.AMT PRICE RETURNS

RIL 75 2554.8 191610 3127 22.39%

SBI 100 1573.25 157325 1752.66 11.40%

INFOSYS 50 1862.4 91230 2244.6 20.52%

ITC 60 213.6 12816 240.51 13.52%

L&T 30 2844.75 85343 3255.11 14.43%

RELIANCE INDUS. INFRA 63 1240 78120 1490.73 20.16%

GOLDSTONE INFRA 40 58.75 2350 70.06 19.25%

DR REDDYS 35 687.45 24061 787.19 15.01%

TOTAL 453 642855 17.09%

38
 EXPECTED RETURNS
DR RIL
REDDYS 16%
GOLTSTONE
11%
INFRA
14% SBI
8%

RELIANCE INFOSYS
INFRA 15%
15%
L&T ITC
11% 10%

INVEST

M.F NAV MENT RETURNS

DBS CHOLA MONTHLY INCOME PLAN 17.18 65000 27.60%

RELIANCE DIVERSIFIED POWER SECTOR GROWTH 63.04 95000 45.78%

FRANKLIN TEMPLTON ASSET MGMT GROWTH 30.18 50000 15.43%

TOTAL 210000 29.60%

Calculation of Target Price:

1. Target Price = New EPS * P.E Ratio

2. New EPS = Last year EPS * Growth
3. Growth = Net Worth Return * Retention Ratio

39
FINDINGS

40
 FINDINGS

On the basis of research done following are the findings

TOTAL PORTFOLIO CLIENT PROFILE

POINTS
STRATEGY

15 – 70 CAPITAL CONSERVATIVE INVERTOR

SEEKING PRESERVATION
PRESERVATION OF CAPITAL AND A
MODERATE LEVEL OF
INCOME.

71 – 125 INCOME INVESTOR WITH A LOW

TOLERENCE FOR RISK
SEEKING, A GREATER
LEVEL OF INCOME WITH
STABILITY OF PRINCIPAL

126 – 190 GROWTH AND LESS CONSERVATIVE

INCOME INVESTOR SEEKING
CURRENT INCOME PLUS
CAPITLA APPRECIATION.

191 – 250 GROWTH INVESTOR WITH SOME

TOLERENCE FOR RISK
SEEKING,CAPITAL
APPRECIATION AND
SECONDARILY INCOME

251 – 305 AGRESSIVE GROWTH EXPERIENCED INVESTOR

WILLING TO ASSUME A
GREAT LEVEL OF RISK
FOR A POTENTIALLY
GREATER.

41
As per my findings a strong portfolio should go through:

 Analyze result of survey

 Communicate results to analysts
 Accordingly research analysts give ideas
 Based on their research ideas managers create and manage portfolios

42
SUGGESTIONS

43
 SUGGESTIONS
To Clients

 Selling investments in a panic when the market is down or rush to buy "hot" investments
unless they truly suit your long-term goals.
 Invest and monitor portfolio from time to time.
 Greed makes invest without thinking twice. One may land being a loser when the desire
to get more for less creeps in.
 When fear strikes, one dreads to even take normal investment risks. Due to this, one may
lose on opportunities while investing in the market.

To Firm

 With the growing competition it needs to be more focused and give special services to
lead in market.
 Most of the client’s are connected through dial and trade service due to which there is no
direct connection i.e. seminars, get together etc should be organized.
 Feedback should be taken by every customer regularly.
 Organize and make accessible a database of customer information.

44
LIMITATION:

45
 LIMITATION OF STUDY:

Every work has its own limitations. Limitations are extent to which the process should not
exceed. The following limitations for the project are:

 Investor ignorance was faced during discussions with respondents as the topic is related
with their income part so respondents were a bit reluctant towards disclosing their true
feelings, so I have to first built up the trust & then talk about the investments.

 Time constraints have also become a major limitation as “Portfolio Management” is

such a vast subject which involves in-depth study analysis.

 Some clients are not aware of the market scenario and to make them understand from
basics was a problem. Also at times they panic to the market movements which was
difficult to tackle with.

 Getting appointments with people was difficult as most of the people were busy and it
was difficult to contact them again and again.

 People provide false data as they were scared about providing actual data such as net
income, premium paid etc.

46
CONCLUSION

47
 CONCLUSION

When we talk about “Portfolio Management Services” it all start from making a decision
about what to invest and where to invest. All the advisory is done once the financial advisor
analyses the actual need of the customers, and this all is done once we know what to offer and
when to offer.

There is lot of scope of promoting PMS in Pune as in the present scenario the Investors
are not well versed with the various investment avenues present in the market. They always seek
for financial help for good “Capital Appreciations” as the annual packages offered to them are
quite high so they need to plan accordingly & that is the right time when we come into the
picture, with best of the PMS which we can offer.

There is great opportunity as there is a rise in number of people who want to invest
in share market but don’t have time and knowledge to do so, also these people want to take risk
.With booming market and falling interest rate of Geogit BNP Paribas deposits, people see
mutual funds as an attractive financial tool which provide a high return rate at lower risk as
compared to equity market. Young people these days are particularly more interested as these
people have large disposable incomes and risk taking capability too. Advertising can also play a
major part as it has been seen that people buy looking at the brand name.

While offering them the “Portfolio Management Services” we see that we offer
them the best after carrying out the total analysis on various schemes running in the market we
give them what satisfies their need the most efficiently.

According to the respondents the quality of the service is very important. So the
company should project itself as a brand in the market that gives end user the best quality of
service with handy operations. Also most of the respondents have their personal consultant or
company consultants, Geogit BNP Paribas . have to differentiate their services from other
consultant effectively by delivering value added services to its customers. Also organizations
have to concentrate on direct marketing activities. The consultancy should develop its long term
relationship with the customers. The consultancy must give much more emphasis on creation of
customer who make repurchase.

48
BIBLIOGRAPHY

49
 BIBLIOGRAPHY

Websites
 www.moneycontrol.com
 http://www.moneycontrol.com/mutualfundindia/
 http://www.moneycontrol.com/stocks/cptmarket/compsearchnew.php?fname=price&com
 www.learntoinvest.com
 www.valueresearchonline.com

Books
 INVESTMENT AND PORTFOLIO ANALYSIS-By: Prasana Chandra
 NCFM Basic Module

50
ANNEXURE

51
 ANNEXURE

QUESTIONNAIRE

Name :

Address :

City :

Pin :

Contact address :

Telephone :

Date of birth:

Sex :

Marital Status :

Educational Qualifications :

52
Q1) WHAT IS YOUR AGE?

o 18 – 29 40
o 30- 44 30
o 45- 54 20
o 55 – 64 10
o ABOVE 65 0

Q2) HOW MANY FINANCIAL DEPENDENTS DO YOU HAVE?

o NONE 15
o 1 10
o 2–3 5
o MORE THAN 3 0

Q3) WAHT IS YOUR EMPLOYMENT STATUS?

o FULL TIME EMPLOYED 20

o PART TIME EMPLOYED 10
o SELF EMPLOYED 15
o NOT EMPLOYED 0
o RETIRED 5

Q4) DESCRIBE YOUR FUTURE EARNING POTENTIAL?

o FAR OUTPACE INFLATION 40

o SOMEWHAT OUTPACE INFLATION 30
o KEEP PACE WITH INFLATION 20
o LESS THAN INFLATION 10
o RETIRED

Q5) DO YOU HAVE AN EMERGENCY FUND?

o NO 0
o < THAN 3 MONTH AFTER TAX INCOME 5
o < THAN 6 MONTHS AFTER TAX INCOME 10
o YES, ADEQUATE EMERGENCY FUND 20

Q6) IF YOU INVEST NOW, WHEN WILL YOU NEED THAT MONEY?

o 0 – 5 YEARS 5
o 6 – 10 YEARS 10
o 11 – 20 YEARS 15
o 21 YEARS ABOVE 20

53
Q7) IF YOU INVEST NOW, WHAT % OF YOUR TOTAL INVESTABLE ASSETS DOES THIS REPRESENT?

o 25 % OR LESS 20
o 50 % OR LESS 10
o 75 % OR LESS 5
o 100 % 0

Q8) WHEN I INVEST MONEY, MY PRIMARY GOAL IS TO:

o PRESERVE THE VALUE OF MY INVESTMENT 0

o EMPHASIZE CURRENT INCOME 10
o PRIMARILY GENERATE CURRENT INCOME
WITH SOME GROWTH 20
o PRIMARILY GENERATE CURRENT INCOME
WITH SOME INCOME 30
o HAVE SUBSTANTIAL LONG TERM GROWTH 40

Q9) THE APPROPRIATE LOSS IN ANY 1 YEAR PERIODS THAT I WOULD BE WILLING TO ACCEPT IS:

o MINIMUM LOSS 0
o 5 – 10 % 10
o 10 – 20 % 15
o 20 % OR MORE 30

Q10) IF MY INVESTMENT LOSES 10 % AFTER 1 MONTH, AND THAT IS CONSISTENT WITH THE
OVERALL MARKET, I WOULD SELL PORTION OF MY RISKIER ASSETS AND PUT THE MONEY INTO SAFER
ASSETS.

o STRONGLY AGREE 0
o DISAGREE 5
o AGREE 10
o STRONGLY DISAGREE 20

Q11) HOW CRITICAL IT IS THAT YOU HAVE ACCESS TO YOUR INVESTMENT CAPITAL IN CASE OF
EMERGENCY OR OTHER INVESTMENT OPPURTUNITIES

o EXTREMELY IMPORTANT 0
o IMPORTANT 10
o SLIGHTLY IMPORTANT 15
o NOT IMPORTANT AT ALL 30

Q12) IN WHICH ARE MOST OF YOUR CURRENT INVESTMENT FUND?

o BANK CDs OR SAVING ACCOUNTS 0
o BONDS 10
o MUTUAL FUNDS 20
o EQUITY 30
o OWN BUSINESS 3

54