PORTFOLIO MANAGEMENT

PRESENTED BY:-

. including choosing and monitoring appropriate investments and allocating funds accordingly.DEFINITION The process of managing the assets of a mutual fund.

matching investments to objectives. weaknesses. • Portfolio management is all about strengths. equity. domestic vs. and balancing risk against performance. asset allocation for individuals and institutions. opportunities and threats in the choice of debt vs.MEANING • The art and science of making decisions about investment mix and policy. international .

Later various personalities developed this portfolio management. • • • .History of Portfolio Management • McFarlan is the first person who planned the approach of the portfolio management in the investment concerns. They are also called as the productive team of the company. Portfolio Management is the responsibility of the senior member of the team in the organization.

. which can be marketed without difficulty. The current returns should at least match the opportunity cost of the funds of the investor. If there are too many unlisted or inactive shares in your portfolio.Objectives of Portfolio Management 1. and switching from one investment to another. 2. Marketability:A good portfolio consists of investment. the portfolio should yield a steady current income. you will face problems in encasing them. Stable Current Return:Once investment safety is guaranteed.

which tend to appreciate in real value after adjusting for inflation. and gift tax. Appreciation in the value of capital:A good portfolio should appreciate in value in order to protect the investor from any erosion in purchasing power due to inflation. but capital gains tax. a balanced portfolio must consist of certain investments. . 4. as well. Tax Planning:Since taxation is an important variable in total planning.CONTD… 3. The portfolio should be developed considering not only income tax. In other words. a good portfolio should enable its owner to enjoy a favorable tax shelter.

. including super stocks. Safety of the investment:Investment safety or minimization of risks is one of the important objectives. A good portfolio of growth stocks satisfies the entire objectives outline above. 6. or for any other personal needs. It is desirable to keep a line of credit from a bank for use in case it becomes necessary to participate in right issues. Liquidity:The portfolio should ensure that there are enough funds available at short notice to take care of the investor’s liquidity requirements. You can try and minimize the overall risk or bring it to an acceptable level by developing a balanced and efficient portfolio. There are many types of risks. which are associated with investment in equity stocks.CONTD… 5.

TYPES OF PORTFOLIO MANAGEMENT TYPES OF PORTFOLIO MANAGEMENT Discretionary Non Discretionary Advisory .

However the execution of trade is done by the portfolio manager. the choice as well as the timings of the investment decisions rest solely with the Portfolio Manager. 1} Discretionary: Under these services. The choice as well as the timings of the investment decisions rest solely with the Investor. 2} Non Discretionary: Under these services.CONTD…. the portfolio manager only suggests the investment ideas. .

The choice as well as the execution of the investment decisions rest solely with the Investor. . Note: In India majority of PMS providers offer Discretionary Services.CONTD… 3}Advisory: Under these services. the portfolio manager only suggests the investment ideas.

Effective investment planning for the investment in securities by considering the following factors:a. Prospect in terms of prospective technological changes. competition in the market. Fiscal. b. Industrial and economic environment and its impact on industry. of India and the Reserve Bank of India. .BASIC PRINCIPLES OF PORTFOLIO MANAGEMENT • There are two basic principles for effective portfolio management which are given below:1. capacity utilization with industry and demand prospects etc. c. financial and monetary policies of the Govt.

c. b. . 2) Constant review of investment:Its require to review the investment in securities and to continue the selling and purchasing of investment in more profitable manner. For this purpose they have to carry the following analysis: a. To assess the financial and trend analysis of companies balance sheet and profit loss Accounts to identify the optimum capital structure and better performance for the purpose of withholding the investment from poor companies. To assess the quality of the management of the companies in which investment has been made or proposed to be made.CONTD…. If so the timing for investment or dis-investment is also revealed. To analysis the security market and its trend in continuous basis to arrive at a conclusion as to whether the securities already in possession should be disinvested and new securities be purchased.

fixed income. managed by a professional money manager that can potentially be tailored to meet specific investment objectives. Currently in India PMS is offered primarily by asset management companies (AMCs) and brokerage houses. debt. cash. What is Portfolio Management Services (PMS)? Portfolio Management Services (PMS) is an investment portfolio in stocks. . structured products and other individual securities.  Who can offer PMS? PMS can be offered only by entities having specific SEBI registration for rendering portfolio management services.

Shareholders own shares of the fund and cannot influence buy and sell decisions or control their exposure to incurring tax Liabilities.PMS and Mutual Funds: The Differences Features PMS Mutual Fund Management Provide ongoing. Ownership . Provide access to professional money management services. Portfolio can be tailored to address each investor's specific needs. Customization Portfolio structured to meet the fund's stated investment Objectives. personalized access to professional money management services. Investors directly own the individual securities in their portfolio. allowing for tax management flexibility.

Significantly higher minimum investments than mutual funds. Generally.Liquidity Although managers may hold cash. they are not required to hold cash to meet redemptions. Generally more flexible than mutual funds. Flexibility Comparatively less flexible. Mutual funds generally hold some cash to meet Redemptions. 5 Crore + for Fixed Income Options. Minimums Provide ongoing. personalized access to professional money management services. The Portfolio Manager may move to 100% cash if required . 1 Crore + for Equity Options Rs. . minimum ranges from: Rs.

measure our success through the success of our clients. capital appreciation. • • . time span and fiscal implications and then suggest an appropriate scheme. 3300 Crores. At the very base of a financially sound portfolio lies the identification of one's investment objective. They help you identify your investment objectives and also outline important requirements like liquidity. with Assets under Management of over Rs.CASE STUDY About Kotak Securities Portfolio Management:• Kotak Securities is one of India’s oldest portfolio management companies with over a decade of experience. current income. we will tailor your stock market portfolio to your specific investment need. At Kotak. • • It is also one of the largest. Whatever be your requirement.

The personalised services also translates into zero paper work and all your financial statements will be e-mailed.CONTD…. Your portfolio of investments in stock market is tailored after a thorough research backed by the expertise from the Kotak Securities Research team. monitored and optimised at all times. A dedicated website and a customer services desk allows you to keep a tab on your portfolio’s performance. . An experienced team of portfolio managers ensure your portfolio is tracked. • How do you benefit from our Portfolio Management Service? An Investment Relationship Manager will ensure that you receive all the services related to your investment needs.

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