Project On Portfolio Management

OBJECTIVES OF STUDY:
1. 2. 3. To study and understand the portfolio management concepts. To study and understand the security analysis concepts. To measure the risk and return of portfolio of companies
SCOPE OF THE STUDY:

This scope of study is limited to 6 firms /companies of selected industries. Pharmaceutical, Information Technologies, Automobile, & 12 companies / banks from Banking Industry. This study is analysis of previous twelve months (May-2012 to Jun-2012) data relating to prices of shares in Bombay Stock Exchange only.
RESEARCH METHODOLOGY:
A system of collecting data for research projects is known as research methodology. The data may be collected for either theoretical or practical research. Research methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. In it we study the various steps that are generally adopted by a researcher in studying his research problem along with the logic behind them.
RESEARCH DESIGN:
Task of defining the research problem is the preparation of the research project, popularly known as the research design. Decisions regarding what, where, when, how much, by what means concern ing an inquiry or a research study constitute a research design. A research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. It is a framework or blueprint for conducting the marketing research project.
DATA COLLECTION:
Generally the available primary data is used wherever is not available within the time permitted and so secondary data has been generated from secondary sources collected.
PRIMARY DATA:
It includes the data collected from the personal interaction with authorized manner of karvy.
SECONDARY DATA:
The secondary method includes the lectures delivered by the superintend of respective dept. The Boucher and materials provided by karvy stock broking ltd & also collected from www.moneycontrol.com & dallal street magazine.
LIMITATIONS OF STUDY:
This study is limited to some selected industries (Pharmaceutical, Banking, Information technologies &Automobile). This study is for the period May 2012 June 2012. Dividend is not considered in the calculation of Return. Price change is only taken into consideration. Situations in stock market are always subject to change. Time constraint
PORTFOLIO MANAGEMENT:
Portfolio is the collection of financial or real assets such as equity shares, debentures, bonds, treasury bills and property etc. portfolio is a combination of assets or it consists of collection of securities. These holdings are the result of individual preferences, decisions of the holders regarding risk, return and a host of other considerations. An investor considering investment in securities is faced with the problem of choosing from among a large number of securities. His choice depends upon the risk return characteristics of individual securities. He would attempt to choose the most desirable securities and like to allocate his funds over his group of securities. Again he is faced with the problem of deciding which securities to hold and how much to invest in each. The investor faces an infinite number of possible portfolio or group of securities. The risk and return characteristics of portfolios differ from those of individual securities combining to form a portfolio. The investor tries to choose the optimal portfolio taking into consideration the risk-return characteristics of all possible portfolios. As the economic and financial environment keeps the changing the risk return characteristics of individual securities as well as portfolio also change. An investor invests his funds in a portfolio expecting to get a good return with less risk to bear. Portfolio management concerns the construction & maintenance of a collection of investment.
FEATURES OF PORTFOLIO MANAGEMENT:

1) Safety of the investment: The first important objective investment safety or minimization of risks is of the important objective of portfolio management. There are many types of risks, which are associated with investment in equity shocks, including super Stock. There is no such thing called Zero-risk investment. Moreover relatively low - risk investment gives corresponding lower returns. 2) Stable current returns:
Once investment safety is guaranteed, the portfolio should yield a steady current income. The current returns should at least match the opportunity cost of the funds of the investor. What we are referring to here is current income by of interest or dividends, not capital gains. 3) Appreciation in the value of capital: A good portfolio should appreciate in value in order to protect the investor from erosion in purchasing power due to inflation. In other words, a balance portfolio must consist if certain investment, which tends to appreciate in real value after adjusting for inflation. 4) Marketability: A good portfolio consists of investment, which can be marketed without difficulty. If there are too many unlisted or inactive share in your portfolio, you will face problems in enchasing them, and switching from one investment to another. It is desirable to invest in companies listed on major stock exchanges, which are actively traded. 5) Liquidity: The portfolio should ensure that there are enough funds available at the short notice to take of the investor's liquidity requirements. 6) Tax Planning: Since taxation is an important variable in total planning, a good portfolio should let its owner enjoy favorable tax shelter.
PORTFOLIO MANAGEMENT PROCESS:

1. 2. 3. 4. 5. 6. 7. Specification of investment Objectives and Constraints Choice of Asset mix Formulation of Portfolio Strategy Selection of Securities: Portfolio Execution Portfolio Revision Performance Evaluation
SEBI GUIDELINES TO THE PORTFOLIO MANAGERS:

On 7th January 1993 securities exchange board of India issued regulations to the portfolio managers for the regulation of portfolio management services by merchant bankers. They are as follows: Portfolio management services shall be in the nature of investment or consultancy management for an agreed fee at client's risk The portfolio manager shall not guarantee return directly or indirectly the fee should not be depended upon or it should not be return sharing basis. Various terms of agreements, fees, disclosures of risk and repayment should be mentioned. Client's funds should be kept separately in client wise account, which should be subject to audit. Manager should report clients at intervals not exceeding 6 months .
Portfolio manager should maintain high standard of integrity and not desire any benefit directly or indirectly form client's funds. The client shall be entitled to inspect the documents. Portfolio manager should maintain high standard of integrity and not desire any benefit directly or indirectly form client's funds. The client shall be entitled to inspect the documents. Portfolio manager shall not invest funds belonging to clients in badla financing, bills discounting and lending operations. Client money can be invested in money and capital market instruments. Settlement on termination of contract as agreed in the contract. Client's funds should be kept in a separate bank account opened in scheduled commercial bank. Purchase or Sale of securities shall be made at prevailing market price. Portfolio managers with his client are fiduciary in nature. He shall act both as an agent and trustee for the funds received.

Project On Portfolio Management

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OBJECTIVES OF STUDY:

SCOPE OF THE STUDY:

FEATURES OF PORTFOLIO MANAGEMENT:

PORTFOLIO MANAGEMENT PROCESS:

SEBI GUIDELINES TO THE PORTFOLIO MANAGERS:

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