As Partial Fulfillment of PGDM Program, Iind Year: A Project Report On
As Partial Fulfillment of PGDM Program, Iind Year: A Project Report On
On
Submitted by:
NEHA SINGH
ROLL NO:-DM11FM48
SPECIALIZATION: FIN
PUNE
2011-2013
1
ACKNOWLEDGEMENT
I take immense pleasure in completing this project and submitting the final project report. A successful project can
never be prepared by the singular effort of the person to whom project is assigned but, it also demand the help and
guardianship of some conversant person who undersigned actively or passively in the completion of a successful
project.
I would like to express my sincere thanks to my Director, Prof. bhat for giving me the opportunity to be a part of an
esteemed institution and without whose support this project would not have been possible.The last two months with
N G RATHI SECURITIES PVT LTD has been full of learning and sense of contribution toward the organization. I
would like to thank N G RATHI SECURITIES PVT LTD .giving me this opportunity for learning and
contributing. I take this opportunity to thank all those people who made this experience a memorable one.
In this context, as a student of MAHATMA PHULE INSTITUTE OF MANAGEMENT, PUNE would first of all like
to express my thank fullness to Mr.---------, for assigning me such a worthwhile title (“PORTFOLIO
MANAGEMENT”)During the actual project work, Mr. ----------(PROJECT GUIDE) has been a source of
inspiration through his constant guidance, personal interest, encouragement and help. I convey my sincere thanks to
him. In spite of his busy schedule he always found time to guide me through the project.
INDEX
2
Sr. No. Topic Page No.
3
1) Executive Summary 4
2) Company Profile 7
3) Purpose of Project 20
4) Research Methodology 22
5) Introduction to Investments 26
6) Portfolio Management 34
Introduction 35
Scope 37
Objectives 38
Types of Portfolio 39
7) Investment Avenues 47
- Physical Assets 48
- Financial Assets 50
8) Virtual Portfolio 53
9) Findings 56
10) Suggestions 59
11) Limitations 61
12) Conclusion 63
13) Bibliography 66
14) Annexure 68
4
5
CHAPTER 1
6
EXECUTIVE SUMMARY
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.
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.
diversify risk, the various investment avenues and product offered in PMS along
with its objective and advantages. The report emphasizes on portfolio management
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 “N G
7
CHAPTER 2
COMPANY PROFILE
Company Profile
N.G.Rathi is one kind of mediator between clients that are investors and Exchange
board. Without mediator nobody can directly purchased shares from the exchange.
Sharekhan is one of the leading stock broking companies in India. Sharekhan is the
retail broking arm of Rathi group, an organization with more than 14 years of trust
and credibility in the stock market. But before 7 years the business was changed
Sharekhan was officially launched in February 2000 as a brand rathi group. With
branches and outlets across the country, their ground network is one of the biggest in
India!
History of N.G.Rathi
A member of the Bombay Stock Exchange for the last 3 generations and serving
investors since 1922, Rathi is a member of the National Stock Exchange, the Inter-
connected stock exchange and a depository participant registered with both NSDL &
CDSL. SSKI made its foray into institutional broking and corporate finance 19 years
ago. Mr. Nitin & Grish, chairman of the rathi group turned into a professional outfit
and established the group as the pioneer of the investment research in the Indian
market.
8
N.g.rathi as been voted as Top Domestic Brokerage House in the research category
broking experience. Sharekhan is known for its research and it big share of its profit
on research.
Role of N.G.Rathi
of India Ltd. (NSE), Bombay Stock Exchange Ltd. (BSE), National Commodity and
Ltd. (MCX).
platform, Telephone and Retail Outlets and is present in 225 cities through a
network of 615 locations. The company was awarded the 2005 Most Preferred Stock
N.G.Rathi covers the entire spectrum of financial services such as Stock broking,
9
A N.G.Rathi outlet offers the following services:
Online BSE and NSE executions (through BOLT & NEAT terminals).
Daily research reports and market review (High Noon & Eagle Eye).
Personalized Advice.
Commodities Trading.
They try to give new facilities thorough their researches to their clients like,
“Share mobile” where clients can buy or sell shares through their mobile phone. It
provides facility to their clients to buy or sell of shares through them. It provides
research calls to their clients so that clients can easily think of investment. Mainly
there are five departments in the company, one is DP department, we can say it
10
heart of the company because it is also “Finance Department”, all the clerical work
are done there. Second one is Off-line traders’ room, where the transaction has
been executed via phone calls or directly through clients. Then there is On-line
Then there is one department of Mutual Fund where they take care of Mutual
nearby Branch Office. The Branch Manager of the company is Mr.nitin & grish
rathi, he is taken care all the activities done within the company. Total there is 30 to
11
VARIOUS ACTIVITIES UNDERTAKEN BY N.G.Rathi STOCK
BROKING LTD
DEMAT SERVICE
Dematerialization and trading in the demat mode is the safer and faster alternative
from delays, thefts, forgeries, settlement risks and paper work. This system works
through depository participants (DPs) who offer demat services and the securities
are held in the electronic form for the investor directly by the Depository.
corporate investors. They have a team of professionals and the latest technological
Here mainly two types of services provided by the company to the customer for
Demat A/C that is (1) Online A/C and (2) Offline A/C.
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1. Online Account: Nowadays online A/C is more popular than offline A/C. In
online A/C what company will do, they simply provide terminal to the
customer and customer can do trading himself/herself when he/she wants. The
online A/C will charge 750/- Rs. (*It varies from company to company). In
these there 3 types of facility company will provide to the customer as per the
company’s requirement.
customer has to do is that first he has to open an Demat A/C with the
N.G.Rathi, after the A/C has been opened the customer will get login ID
and Password and with the help of these he can login to the
to type that company’s name or code and he will get all the necessary
information regarding the company and he can buy or sell that company’s
stock.
b) Fast Trade Account: In this the whole terminal will provided to the
customer and the customer can buy or sell the shares by himself by
watching the live position of the company in the terminal. The initial
customer has to login into Fast trade and he will get the whole terminal
from where he can buy or sell the shares of the company by himself only.
In this the customer can see 25 scripts at a time and place the order from
generated.
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c) Speed Trade Account: This is also same as Fast trade but the only
difference is that in Fast trade the customer will get only 25 scripts at a
time whereas in Speed Trade the customer will get full screen view and
more than 25 scripts at a time. This A/C also provides charts and graphs so
that one can easily understand about the stocks. This is provided mostly to
those persons who are dealer kind of customer or the big clients. Here the
2. Offline Account: This is the traditional way of buying or selling shares. In this,
customer can place the order via telephone or directly by sitting in the
company. The customers who are busy in their jobs or businesses, they can
place the order via telephone and the customers who are not that much of busy,
they can come to the office (N.G.Rathi) and by sitting there whole day they can
Free with N.G.Rathi Classic Account, the Dial-n-Trade service enables customer
FEATURES:
Simple and Secure Interactive Voice Response based system for authentication. No
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STOCK BROKING
Stock Exchange and Hyderabad Stock Exchange. More importantly, they make safe
to the maximum possible extent, by accounting for several risk factors and planning
accordingly. They assisted in this task by their in-depth research, constant feedback
and sound advisory facilities. Their highly skilled research team, comprising of
information on market trends, market analysis and market predictions. This crucial
information is given as a constant feed back to the customers, through daily reports
delivered along with their updated portfolio. Besides this they are also offered
special portfolio analysis packages that provide daily technical advice on scrip’s for
customer make the right financial moves that are specifically suited to their
portfolio.
Factors such as their success in the electronics custody business has helped
build on our trading of trust even more. Consequentially their retail client base
expanded very fast. To empower the investor further they have made serious efforts
to ensure that their research calls are disseminated systematically to all their stock
broking clients through various delivery channels like e-mail, chat, SMS, phone
calls etc.
ADVISORY SERVICES
Under their real brand N.G.Rathi LIMITED’ they deliver advisory services to a
portfolios.
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They are continually engaged in designing the right investment portfolio for
providing valuable inputs, monitoring and managing the potfolio through varied
technological intiatives. Those is made possible by the expertise they have gained in
COMMODITIES
option. Company enables trade in all goods and products of agriculture and mineral
origin that include lucrative commodities like gold and silver and popular items like
technological and infrastructural strengths and especially the street smart skills make
them an ideal broker. Their service matrix is holistic with a gamut of advantages, the
first and foremost being their legacy of human resources, technology and
Their wide national network, spanning the length and breadth of India, further
supports these advantages. Regular trading workshops and seminars are conducted
to hone trading strategies to perfection. Every move made is a calculated one, based
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MUTUAL FUNDS
N.G.Rathi have announced that customers will now be able to invest in Mutual
Funds through N.G.Rathi. They have started this service for a few mutual funds, and
in the near future will be expanding their scope to include a whole lot more.
For investing in mutual funds through N.G.Rathi you have to just download the
Competetors of N.G.Rathi
Indiabulls
Karvy consultant
ICICI Direct
India Infoline
Relience money
IL&FS Investsmart.
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CHAPTER 3
OBJECTIVE OF
PROJECT
OBJECTIVE OF PROJECT
Instrument among investors and also to know the investing pattern of people in
different Financial Project. The project with N.G.RATHI SECURITIES LTD has
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.
18
I suggest them the investments that they can opt for and the one’s which can
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
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
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
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CHAPTER 4
RESEARCH
METHODOLOGY
METHODOLOGY OF STUDY
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
20
RESEARCH METHODOLOGY
Research has its special significance in solving various operational and planning
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
respondents.
ASSUMPTIONS:
1. It has been assumed that sample of hundred represents the whole population.
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
First of all are they aware of tax and investment planning or not and then analyzing
21
Sources of Data:
PRIMARY DATA
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
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
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
CHAPTER 5
INTRODUCTION TO INVESTMENTS
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INTRODUCTION
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 where: 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.
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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
Remember: 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
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.
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.
To Invest early,
To Invest regularly,
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This can be explained by very simple example. Assume a person is 40 years old and will
require 70% of his current annual income for each of the 15 years expect to live after his
In this case he will have to plan his finance and hence the terms portfolio and
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
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
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 bank 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 ones risk-return profile.
25
Investment Guidelines
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 banks competing
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
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A simple example for this –
Let’s assume X invests Rs.100 in a Bank 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 bank 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
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
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).
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 year, you would get a 5 percent return on both your
27
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.
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
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
Selling investments in a panic when the market is down or rush to buy "hot" investments
Trading too much is not advisable. If your portfolio has high turnover you could face
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.
Ignoring return calculations. Always calculate the post-tax effective yield for each
investment made.
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Invest, monitor and review customers portfolio from time to time. Be disciplined and
CHAPTER 6
PORTFOLIO MANAGEMENT
which are aligned with the organizing element of the Portfolio, and, which contribute to the
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,
budgeting, banking and taxes. The portfolio management process involves formulating,
29
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
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,
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
(1) Individually managed accounts: Provides a flexible format for optimizing returns through
(3) Individually managed accounts: Provides a flexible format for optimizing returns through
better information support/client servicing regular investments disclosures make the investor
(4) Supportive tax structure: Tax changes support rise in equity, there is a cut in capital gains
(5) SEBI regulated: A regulated industry makes the investor feel comfortable with the
30
SCOPE OF PORTFOLIO MANAGMENT
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:
Provide the client an appropriate asset allocation mix based on certain factors like
Attain the investment objective by strengthening the client’s portfolio in the best
possible way
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OBJECTIVES OF PORTFOLIO MANAGMENT
1 .Safety Of Fund: The investment should be preserved, not be lost and remain in the
2. Liquidity: Portfolio must consists of such securities which could be en cashed without any
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
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
that means , the securities must be listed and traded in stock exchange so as to avoid risk and
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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
33
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
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
35
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
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.
36
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
(3) Usage of derivatives as a tool: One must have a selective use of derivatives in various
(4) Flexible cash allocation strategy: We have an efficient allocation among assets with
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
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
37
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
The portfolio manager periodically reviews the performance of, and conformance to
The portfolio manager ensures that data is collected and analyzed about each of the
The portfolio manager enables periodic decision making about the future direction of
individual initiatives.
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
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
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.
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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
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.
FORMUATION OF PORTFOLIO
STRATEGY
SELECTION OF SECURITES
PORTFOLIO EXECUTION
PORTFOLIO REVISION
PORTFOLIO EVALUATION
39
CHAPTER 7
INVESTMENTS AVENUES
INVESTMENT AVENUES
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.
40
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
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
banks 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
commodity at a future date. It is similar to the Index futures and Stock Futures but the
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.
41
Major Commodity Exchanges
exchanges in the year 2002 and accordingly three exchanges come in picture. They are:
However there are regional commodities exchanges functioning all over the country.
Sharekhan Commodities Broking Pvt. Ltd has got membership of both the premier commodity
Financial assets such as Fixed Deposits with Banks, Small Saving Instruments with Post
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
Whatever combinations your portfolio may comprise of, but do get yourself and your family
insured.
42
Savings Scheme and Public Provident Fund schemes promoted by Banks. 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
Bank deposits. Banks 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 banks
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
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
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.
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CHAPTER 8
VIRTUAL PORTFOLIO
VIRTUAL PORTFOLIO
(OF Rs 10 LACS)
NO. OF TARGET
SCRIPT SHARES PRICE T.AMT PRICE RETURNS
44
INVEST
M.F NAV MENT RETURNS
45
CHAPTER 9
FINDINGS
FINDINGS
POINTS STRATEGY
15 – 70 CAPITAL CONSERVATIVE
PRESERVATION OF
CAPITAL AND A
MODERATE LEVEL
OF INCOME.
71 – 125 INCOME INVESTOR WITH A
LOW TOLERENCE
A GREATER LEVEL
OF INCOME WITH
STABILITY OF
46
PRINCIPAL
INCOME CONSERVATIVE
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 EXPERIENCED
TO ASSUME A
GREAT LEVEL OF
RISK FOR A
POTENTIALLY
GREATER.
47
As per my findings a strong portfolio should go through:
48
CHAPTER 10
SUGGESTIONS
SUGGESTIONS
To Clients
Selling investments in a panic when the market is down or rush to buy "hot" investments
Greed makes invest without thinking twice. One may land being a loser when the desire
When fear strikes, one dreads to even take normal investment risks. Due to this, one may
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
49
CHAPTER 11
LIMITATIONS
LIMITATIONS
Every work has its own limitations. Limitations are extent to which the process should not
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.
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
Getting appointments with people was difficult as most of the people were busy and it
People provide false data as they were scared about providing actual data such as net
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CHAPTER 12
CONCLUSION
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.
Their 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
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 bank 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
51
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
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, Sharekhan LTD. 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
52
CHAPTER 13
BIBLIOGRAPHY
Bibliography
Web sites
www.moneycontrol.com
http://www.moneycontrol.com/mutualfundindia/
http://www.moneycontrol.com/stocks/cptmarket/compsearchnew.php?
fname=price&companyname=portfolio%20Management
http://www.moneycontrol.com/stocks/cptmarket/compsearchnew.php?
fname=price&companyname=comany%20analysis
www.learntoinvest.com
Management.htm
www.valueresearchonline.com
http://investsmartindia.com/ilfswebapp/Search.do?reqCode=searchAc
on&schName=mutual%20Fund&selectOption=Test&page=1
Books
53
CHAPTER 14
ANNEXURE
ANNEXURE
Questionnaire
Name :
Address :
City :
Pin :
Contact address :
Telephone :
Date of birth:
Sex :
Marital Status :
Educational Qualifications :
o 18 – 29 40
o 30- 44 30
o 45- 54 20
o 55 – 64 10
o ABOVE 65 0
54
o NONE 15
o 1 10
o 2–3 5
o MORE THAN 3 0
55
Q4) DESCRIBE YOUR FUTURE EARNING POTENTIAL?
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
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Q7) IF YOU INVEST NOW, WHAT % OF YOUR TOTAL INVESTABLE ASSETS
o 25 % OR LESS 20
o 50 % OR LESS 10
o 75 % OR LESS 5
o 100 % 0
o MINIMUM LOSS 0
o 5 – 10 % 10
o 10 – 20 % 15
o 20 % OR MORE 30
o STRONGLY AGREE 0
o DISAGREE 5
o AGREE 10
o STRONGLY DISAGREE 20
57
Q11) HOW CRITICAL IT IS THAT YOU HAVE ACCESS TO YOUR INVESTMENT
o EXTREMELY IMPORTANT 0
o IMPORTANT 10
o SLIGHTLY IMPORTANT 15
o NOT IMPORTANT AT ALL 30
58