PROJECT REPORT

ON

A STUDY ON PORTFOLIO
CONSTRUCTION/MANAGEMENT
SUBMITTED BY

ASHICK CHERIYA VEETTIL KOROTH

ROLL NO. 14133

MBA-FINANCE

A REPORT SUBMITTED IN PARTIAL FULFILLMENT OF THE

REQUIREMENT FOR THE AWARD OF MASTER OF BUSINESS

ADMINISTRATION (MBA)

FROM
SURESH GYAN VIHAR UNIVERSITY DISTANCE
LEARNING EDUCATION
 CERTIFICATE BY THE GUIDE

This is to certify that this project entitled “A STUDY ON PORTFOLIO

CONSTRUCTION/MANAGEMENT” submitted in partial fulfilment of the degree of
MASTER IN BUSINESS ADMINISTRATION (MBA) to Suresh Gyan Vihar University, Jaipur,
done by Mr. ASHICK CHERIYA VEETTIL KOROTH, Roll No. 14133 is an authentic work
carried out by him/her under my guidance. The matter embodied in this project work has not been
submitted earlier for award of any degree or diploma to the best of my knowledge and belief.

Signature of the student Signature of the Guide

Date : 06/04/2023
 ACKNOWLEDGEMENT

I would like to take the opportunity to thank and express my deep sense of gratitude to my
corporate mentor “Mr. xxxxx”. I am greatly indebted to him for providing their valuable guidance
at all stages of the study, their advice, constructive suggestions, positive and supportive attitude
and continuous encouragement, without which it would have not been possible to complete the
project.

I hope that I can build upon the experience and knowledge that I have gained and make a valuable
contribution towards this industry in coming future.
 ABSTRACT
Investing in equities requires time, knowledge and constant monitoring of the market. For those
who need an expert to help to manage their investments, portfolio management service (PMS)
comes as an answer. The business of portfolio management has never been an easy one. Juggling
the limited choices at hand with the twin requirements of adequate safety and sizeable returns is a
task fraught with complexities. Given the unpredictable nature of the market it requires solid
experience and strong research to make the right decision. In the end it boils down to make the
right move in the right direction at the right time. That’s where the expert comes in.

The term portfolio management in common practice refers to selection of securities and their
continuous shifting in a way that the holder gets maximum returns at minimum possible risk.
Portfolio management services are merchant banking activities recognized by SEBI and these
activities can be rendered by SEBI authorized portfolio managers or discretionary portfolio
managers. A portfolio manager by the virtue of his knowledge, background and experience helps
his clients to make investment in profitable avenues. A portfolio manager has to comply with the
provisions of the SEBI (portfolio managers) rules and regulations, 1993. This project also includes
the different services rendered by the portfolio manager. It includes the functions to be performed
by the portfolio manager. What is the difference between the value of time and money? In other
words, learn to separate time from money.

When it comes to the importance of time, how many of us believe that time is money. We all know
that the work done by us is calculated by units of time. Have you ever considered the difference
between an employee who is working on an hourly rate and the other who is working on salary
basis? The only difference between them is of the unit of time. No matter whether you get your
pay by the hour, bi-weekly, or annually; one thing common in all is that the amount is paid to you
according to amount of time you spent on working. In other words, time is precious and holds
much more importance than money. That is the reason the time is considered as an important factor
in wealth creation. The project also shows the factors that one considers for making an investment
decision and briefs about the information related to asset allocation.
 TABLE OF CONTENT

Sr. No. CHAPTERS PARTICULARS

1 CHAPTER 1 Introduction

2 CHAPTER 2 Objective of the Study

3 CHAPTER 3 Literature Review

4 CHAPTER 4 Research Methodology

5 CHAPTER 5 Data Analysis & Interpretation

6 CHAPTER 6 Finding, Suggestion and Conclusion

Bibliography
7 Annexure
 CHAPTER 1

INTRODUCTION
Investing in securities such as shares, debenture and bonds is profitable as well as exciting.
Investing in financial securities is now considered to be one of the best avenues for investing one’s
savings while it is acknowledged to be one of the riskiest avenues of investment.

It is rare to find investors investing their entire funds or savings in a single security. Instead, they
tend to invest in a group of securities. Such a group of securities is called a portfolio. Creation of
a portfolio helps to reduce risk without sacrificing returns. Portfolio Management deals with the
analysis of individual securities as well as with the theory and practice of optimally combining
securities into portfolios. An investor who understands the fundamental principles and analytical
aspects of portfolio management has a better chance of success.

An investor means people who invest their savings. Investment is an activity, which is
different from savings. Savings are generated when a person abstains from present consumption
for a future use. Savings kept as cash are burden and do not earn anything. Hence the saver has to
find a temporary repository for his saving until they are required for the future. This results in
investment. Today, investment has become a household word and is very popular with people from
all walks of like. It is because of increase in working population, higher family incomes and
consequent savings, availability of large and attractive investment alternatives, increase in
investment related publicity and so on.

Due to the extreme volatility of today’s capital market conditions the investors are facing
much complexity in making decisions regarding their investment. They are interested to achieve
their investment goals without losing their money. Since the return and risk are the major factors
influencing the decisions of the investors, they are seeking an effective trade-off between them.
The art of investment focuses on an optimal compromise between return and risk.

The study gives a better understanding of security analysis and portfolio construction and
evaluation. The study also helps to become familiar with various tools, methods and techniques
which are used to reach at effective decisions in the capital market.

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WHAT IS PORTFOLIO MANAGEMENT

An investor considering funding in securities is faced with the trouble of selecting from amongst
a huge variety of securities. His preference is predicated upon the risk-go back characteristics of
character securities. He would possibly attempt to pick the maximum perfect securities and like to
allocate his finances over this enterprise of securities. Again he's confronted with the hassle of
identifying which securities to be held and what kind of to put money into each. The investor faces
an endless type of feasible portfolios or organisation of securities.

As the economic and economic surroundings keeps converting, the danger-go back tendencies of
person securities as well as portfolios moreover exchange. This requires periodic compare and
revision of investment portfolios of buyers.

An investor invests his budget in a portfolio watching for to get an excellent return consistent with
the chance that he has to undergo. The go back observed out from the portfolio needs to be
measured and the overall performance of the portfolio should be evaluated.

Portfolio Management accommodates all of the strategies in the arrival and safety of a funding
portfolio. It deals in particular with protection evaluation, portfolio evaluation, portfolio desire,
portfolio revision, and portfolio evaluation. Portfolio Management is a complex method which
attempts to make funding activity greater profitable and much less volatile.

A man or woman making an investment expects to get some go back from the funding inside the
destiny. But, due to the fact the future is unsure, so is the future predicted return. It is that this
uncertainty associated with the returns from an investment that reduces threat into an investment.

The general variability in returns of a protection represents the overall chance of that protection.
Systematic and Unsystematic Risk are the 2 additives of overall chance. Thus,

Total Risk = Systematic Risk + Unsystematic Risk

The effect of financial, political and social adjustments at the overall performance of organizations
and thereby on their inventory expenses because of such tool large elements is referred to as
systematic risk. Systematic Risk is similarly subdivided into interest fee danger, market risk, and
purchasing energy chance.

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When variability of returns takes place because of agency issuing elements such as raw cloth
shortage, labour strike, manage inefficiency, it's far referred to as Unsystematic Risk.

The systematic danger of a protection is measured with the aid of a statistical diploma called Beta.
The input information required for the calculation of beta are the historical statistics of returns of
the character protection in addition to the returns of a represented stock market index.

Investment
Avenues

Equity Fixed Income

Shares securities

Mutual Fund Deposits

Schemes

Tax Sheltered Life Insurance

Schemes

Real Estate Precious

Objects

Financial Derivatives

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PORTFOLIO CONSTRUCTION

The Portfolio Construction of Rational investors wish to maximize the returns on their funds for a
given level of risk. All investments possess varying degrees of risk. Returns come in the form of
income, such as interest or dividends, or through growth in capital values (i.e. capital gains).

The portfolio construction process can be broadly characterized as comprising the following steps:

1. Setting objectives:

The first step in constructing a portfolio is to decide the number one goals of the fund given the
restrictions (i.e. Tax and liquidity necessities) that could practice. Each investor has unique
objectives, time horizons and mindset towards threat. Pension budget have prolonged-time period
responsibilities and, as a quit result, make investments for the long time. Their objective can be to
maximize preferred returns in more of the inflation fee. A charity may desire to generate the very
exceptional degree of income whilst maintaining the fee of its capital obtained from bequests. A
man or woman might also have certain liabilities and need to in shape them at a future date.
Assessing a purchaser’s threat tolerance can be tough. The concepts of inexperienced portfolios
and diversification must additionally be considered while putting in the funding goals.

2. Defining Policy:

Once the targets have been set, an appropriate investment coverage ought to be set up. The standard
approach is for the money supervisor to ask customers to pick out their favored combo of assets,
as an example equities and bonds, to provide an idea of the ordinary blend desired. Clients are then
asked to specify limits or maximum and minimal amounts they may permit to be invested inside
the extremely good assets to be had. The primary asset training are coins, equities, gilts/bonds and
different debt gadgets, derivatives, belongings and remote places assets. Alternative investments,
along with personal equity, also are developing in popularity, and may be referred to in a later
financial disaster. Attaining the gold popular asset mixture through the years is one of the key
elements of a success making a funding.

3. Applying portfolio strategy:

At each quit of the portfolio manipulate spectrum of techniques are active and passive techniques.
A lively approach includes predicting trends and converting expectancies about the probable

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destiny universal overall performance of the numerous asset training and actively dealing interior
and out of investments to are in search of for a higher normal overall performance. For instance,
if the supervisor expects interest prices to rise, bond expenses are in all likelihood to fall and so
bonds should be offered, till this expectation is already factored into bond costs. At this level, the
lively fund supervisor need to additionally determine the style of the portfolio. For instance, will
the fund invest specifically in groups with massive marketplace capitalizations, in stocks of
companies predicted to generate high growth quotes, or in businesses whose valuations are low?
A passive approach usually entails shopping for securities to inform a preselected marketplace
index. Alternatively, a portfolio can be installation to inform the investor’s choice of tailored index.
Passive techniques depend on diversification to lessen risk. Outperformance as opposed to the
selected index is not predicted. This strategy calls for minimal input from the portfolio supervisor.

4. Asset selections:

Once the method is decided, the fund supervisor have to choose character assets in which to invest.
Usually a scientific method known as a funding technique is mounted, which sets tips or standards
for asset preference. Active strategies require that the fund managers observe analytical abilities
and judgment for asset choice with a view to choose out undervalued belongings and to try to
generate superior performance.

5. Performance assessments:

In order to evaluate the success of the fund manager, the general performance of the fund is
periodically measured towards a pre-agreed benchmark – possibly a suitable inventory change
index or in competition to a set of similar portfolios (peer group evaluation). The portfolio
manufacturing gadget is continuously iterative, reflecting changes internally and externally. For
example, predicted movements in trade charges can also make foreign places investment greater
attractive, leading to modifications in asset allocation. Or, if many big-scale investors
simultaneously determine to alternate from passive to greater lively techniques, strain might be
positioned on the fund managers to offer greater energetic budget. Poor performance of a fund can
also result in changes in character asset holdings or, as an severe measure; the supervisor of the
fund can be modified altogether.

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 Steps to Stock Selection Process

Types of assets

The form of a portfolio will depend ultimately at the investor’s objectives and on the asset desire
preference reached. The portfolio form takes beneath consideration a selection of factors, which
include the investor’s time horizon, mind-set to risk, liquidity requirements, tax characteristic and
availability of investments. The primary asset instructions are cash, bonds and one-of-a-kind fixed
profits securities, equities, derivatives, property and remote places property.

Cash and cash instruments

Cash may be invested over any preferred length, to generate interest profits, in a number of
incredibly liquid or without troubles redeemable devices, from clean bank deposits, negotiable
certificate of deposits, business paper (short time period corporation debt) and Treasury bills (brief
time period authority’s debt) to coins’ marketplace charge range, which actively manage cash
sources across numerous domestic and foreign places markets. Cash is normally held over the
quick time period pending use someplace else (possibly for paying claims thru a non-lifestyles
coverage organization or for paying pensions), but can be held over the long time as nicely. Returns
on coins are pushed with the resource of the general call for price range in a financial tool, hobby

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costs, and the anticipated price of inflation. A portfolio will typically preserve as a minimum a
small percent of its price range in coins so that you can take gain of purchasing possibilities.

Bonds

Bonds are debt units on which the enterprise (the borrower) is of the identical opinion to make
hobby bills at periodic intervals over the life of the bond – this could be for two to thirty years or,
on occasion, in perpetuity. Interest bills may be constant or variable, the latter being related to
winning stages of hobby prices. Bond markets are international and function grown hastily over
current years. The bond markets are enormously liquid, with many issuers of similar recognition,
such as governments (sovereigns) and country-assured agencies. Corporate bonds are bonds that
are issued by using manner of groups. To assist traders and to assist in the inexperienced pricing
of bond issues, many bond problems are given rankings via expert corporations collectively with
Standard & Poor’s and Moody’s. The maximum funding grade is AAA, going all of the way proper
all of the manner right down to D, that is graded as in default. Depending on expected actions in
destiny hobby fees, the capital values of bonds range each day, imparting traders with the
functionality for capital gains or losses.

Future hobby expenses are driven with the aid of the in all likelihood name for/ deliver of cash in
a financial device, destiny inflation rates, political sports activities and hobby costs some other
area in international markets. Investors with quick-term horizons and liquidity necessities can also
moreover pick to put money into bonds because of their substantially higher go back than coins
and their opportunities for feasible capital appreciation. Long Term buyers, along with pension
price variety, may accumulate bonds for the higher income and might keep them until redemption
– for possibly seven or fifteen years. Because of the more danger, prolonged bonds (over ten years
to maturity) have a tendency to be extra unstable in rate than medium- and quick-time period
bonds, and characteristic a higher yield.

Equities

Equity includes stocks in an enterprise representing the capital to begin with provided through
shareholders. An ordinary shareholder owns a proportional percent of the corporation and an
everyday percent consists of the residual threat and rewards however the entirety liabilities and
fees had been paid.

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Ordinary stocks deliver the proper to get hold of earnings inside the shape of dividends (as soon
as declared out of distributable profits) and any residual declare on the business agency’s property
as quick as its liabilities had been paid in whole. Preference stocks are every other form of
percentage capital. They fluctuate from ordinary stocks in that the dividend on a preference
percentage is generally fixed at some quantity and does now not trade. Also, choice shares typically
do not deliver voting rights and, within the event of organisation failure, preference shareholders
are paid earlier than normal shareholders. Returns from making an investment in equities are
generated inside the form of dividend profits and capital advantage springing up from the closing
sale of the stocks. The diploma of dividends can also variety from 12 months to one year, reflecting
the changing profitability of a business enterprise. Similarly, the marketplace fee of a percent will
alternate from each day to mirror all relevant available facts. Although not guaranteed, equity
prices normally rise through the years, reflecting popular monetary boom, and had been positioned
over the long term to generate developing degrees of earnings in more of the charge of inflation.
Granted, there may be durations of time, even years, at the identical time as fairness fees style
downwards – normally inside the direction of recessionary times. The normal prolonged-time
period prospect, however, for capital appreciation makes equities an appealing investment
proposition for main institutional shoppers.

Derivatives

Derivative gadgets are monetary assets that are derived from cutting-edge primary property instead
of being issued with the resource of the usage of a company or government entity.

The maximum famous derivatives are futures and alternatives. The extent to which a fund may
additionally moreover incorporate derivatives products inside the fund might be special inside the
fund regulations and, relying on the shape of fund set up for the client and relying on the consumer,
might not be allowable at all.

A futures settlement is a settlement in the form of a standardized agreement between counterparties

to exchange an asset at a set charge and date in the destiny. The underlying asset of the futures
settlement can be a commodity or an economic safety. Each settlement specifies the type and
amount of the asset to be exchanged, and wherein it is to be introduced (typically one in each of
some accredited locations for that specific asset). Futures contracts may be installation for the
transport of cocoa, steel, oil or coffee. Likewise, monetary futures contracts can specify the

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shipping of overseas cash or quite a number of authorities bonds. The client of a futures agreement
takes a ‘lengthy function’, and will make an income if the charge of the agreement rises after the
purchase. The issuer of the futures settlement takes a ‘short position’ and will, in turn, make an
income if the rate of the futures settlement falls. When the futures agreement expires, the seller of
the settlement is needed to supply the underlying asset to the client of the agreement. Regarding
monetary futures contracts, but, inside the full-size majority of instances no physical delivery of
the underlying asset takes place as many contracts are cash settled or closed out with the offsetting
role earlier than the expiry date.

A preference settlement is an agreement that offers the proprietor the right, however not
responsibility, to shop for or sell (relying on the form of opportunity) an advantageous asset for an
in depth time body. A call choice gives the holder the right to shop for the asset. A positioned
preference gives the holder the right to sell the asset. European options may be exercised best on
the options’ expiry date. US alternatives may be exercised at any time before the agreement’s
maturity date. Option contracts on stocks or stock indices are especially well-known. Buying a
possibility consists of paying a top class; selling an opportunity consists of receiving the top
beauty. Options have the capability for big earnings or losses, and are taken into consideration to
be excessive-chance gadgets. Sometimes, however, preference contracts are used to lessen threat.
For example, fund managers can use a name preference to lessen risk once they very own an asset.
Only very specific budget is allowed to maintain alternatives.

Property

Property funding can be made each right away via looking for homes, or now not without delay
with the useful resource of shopping for shares in indexed assets agencies. Only primary
institutional consumers with lengthy-term time horizons and no liquidity pressures normally tend
to make direct belongings investments. These establishments buy freehold and leasehold homes
as part of a property portfolio held for the long time, perhaps twenty or more years. Property sectors
of interest would possibly embody high, pleasant, properly-positioned commercial agency place
of work and keep houses, contemporary commercial warehouses and estates, resorts, farmland and
forest. Returns are generated from annual rents and any capital profits on interest. These
investments are often substantially illiquid.

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PHASES OF PORTFOLIO MANAGEMENT

Portfolio Management is a process encompassing many activities aimed at optimizing the

investment of one’s funds. Five phases can be identified in this process:

1. Security Analysis
2. Portfolio Analysis
3. Portfolio Selection
4. Portfolio Revision
5. Portfolio Evaluation

EQUITY SHARES: -
Types of Equity Instruments:

➢ Ordinary Shares

Ordinary shareholders are the owners of a company, and each share entitles the holder to
ownership privileges such as dividends declared by the company and voting rights at meetings.
Losses as well as profits are shared by the equity shareholders. Without any guaranteed income or
security, equity shares are a risk investment, bringing with them the potential for capital appreciation
in return for the additional risk that the investor undertakes in comparison to debt instruments with
guaranteed income.

➢ Preference Shares

Unlike equity shares, preference shares entitle the holder to dividends at fixed rates subject to
availability of profits after tax. If preference shares are cumulative, unpaid dividends for years of
inadequate profits are paid in subsequent years. Preference shares do not entitle the holder to
ownership privileges such as voting rights at meetings.

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 ➢ Equity Warrants

These are long term rights that offer holders the right to purchase equity shares in a company at a
fixed price (usually higher than the current market price) within a specified period. Warrants are in
the nature of options on stocks.

Classification in terms of Market Capitalisation

Market capitalisation is equivalent to the current value of a company i.e. current market price per
share times the number of outstanding shares. There are Large Capitalisation companies, Mid-Cap
companies and Small-Cap companies. Different schemes of a fund may define their fund objective
as a preference for Large or Mid or Small-Cap companies' shares. Large Cap shares are more liquid
and hence easily tradable. Mid or Small Cap shares may be thought of as having greater growth
potential. The stock markets generally have different indices available to track these different
classes of shares.

Classification in terms of Anticipated Earnings

In terms of the anticipated earnings of the companies, shares are generally classified on the basis
of their market price in relation to one of the following measures:

* Price/Earnings Ratio is the price of a share divided by the earnings per share, and indicates
what the investors are willing to pay for the company's earning potential. Young and/or fast
growing companies usually have high P/E ratios. Established companies in mature industries may
have lower P/E ratios. The P/E analysis is sometimes supplemented with ratios such as Market
Price to Book Value and Market Price to Cash Flow per share.

• Dividend Yield for a stock is the ratio of dividend paid per share to current market price. Low
P/E stocks usually have high dividend yields. In India, at least in the past, investors have indicated
a preference for the high dividend paying shares. What matters to fund managers is the potential
dividend yields based on earnings prospects?

Based on companies' anticipated earnings and in the light of the investment management
experience the world over, stocks are classified in the following groups:

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 • Cyclical Stocks are shares of companies whose earnings are correlated with the state of the
economy. Their earnings (and therefore, their share prices) tend to go up during upward
economic cycles and vice versa. Cement or Aluminum producers fall into this category,
just as an example. These companies may command relatively lower P/E ratios, and have
higher dividend pay-outs.

• Growth Stocks are shares of companies whose earnings are expected to increase at rates that exceed
normal market levels. They tend to reinvest earnings and usually have high P/E ratios and low dividend
yields. Software or information technology company shares are an example of this type.
Fund managers try to identify the sectors or companies that have a high growth potential.

• Value Stocks are shares of companies in mature industries and are expected to yield low
growth in earnings. These companies may, however, have assets whose values have not been
recognised by investors in general. Fund managers try to identify such currently under-valued
stocks that in their opinion can yield superior returns later. A cement company with a lot of real
estate and a company with good brand names are examples of potential value shares.

FIXED INCOME SECURITIES

Many instruments give regular income. Debt instruments may be secured by the assets of the
borrowers as generally in case of Corporate Debentures, or be unsecured as is the case with Indian
Financial Institution Bonds.

A debt security is issued by a borrower and is often known by the issuer category, thus giving us
Government Securities and Corporate Securities or FI bonds. Debt instruments are also distinguished
by their maturity profile. Thus, instruments issued with short-term maturities, typically under one
year, are classified as Money Market Securities. Instruments carrying longer than one-year
maturities are generally called Debt Securities.

Most debt securities are interest-bearing. However, there are securities that are discounted securities
or zero-coupon bonds that do not pay regular interest at intervals but are bought at a discount to
their face value. A large part of the interest-bearing securities is generally Fixed Income-paying, while
there are also securities that pay interest on a Floating Rate basis.
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A Review of the Indian Debt Market

The Wholesale Debt Market segment deals in fixed income securities and is fast gaining ground
in an environment that has largely focused on equities.

The Wholesale Debt Market (WDM) segment of the Exchange commenced operations on June
30, 1994. This provided the first formal screen-based trading facility for the debt market in the
country.

This segment provides trading facilities for a variety of debt instruments including Government
Securities, Treasury Bills and Bonds issued by Public Sector Undertakings/ Corporates/ Banks like
Floating Rate Bonds, Zero Coupon Bonds, Commercial Papers, Certificate of Deposits, Corporate
Debentures, State Government loans, SLR and Non-SLR Bonds issued by Financial Institutions,
Units of Mutual Funds and Securitized debt by banks, financial institutions, corporate bodies,
trusts and others.

Large investors and a high average trade value characterize this segment. Till recently, the market
was purely an informal market with most of the trades directly negotiated and struck between
various participants. The commencement of this segment by NSE has brought about transparency
and efficiency to the debt market, along with effective monitoring and surveillance to the market.

Instruments in the Indian Debt Market

➢ Certificate of Deposit

Certificates of Deposit (CD) are issued by scheduled commercial banks excluding regional rural
banks. These are unsecured negotiable promissory notes. Bank CDs have a maturity period of 91
days to one year, while those issued by FIs have maturities between one and three years.

➢ Commercial Paper

Commercial paper (CP) is a short term, unsecured instrument issued by corporate bodies (public
& private) to meet short-term working capital requirements. Maturity varies between 3 months and 1
year. This instrument can be issued to individuals, banks, companies and other corporate bodies

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registered or incorporated in India. CPs can be issued to NRIs on non-reparable and non-
transferable basis.

➢ Corporate Debentures

The debentures are usually issued by manufacturing companies with physical assets, as secured
instruments, in the form of certificates They are assigned a credit rating by rating agencies. Trading in
debentures is generally based on the current yield and market values are based on yield-to-maturity. All
publicly issued debentures are listed on exchanges

➢ Floating Rate Bonds (FRB)

These are short to medium term interest bearing instruments issued by financial intermediaries
and corporates. The typical maturity of these bonds is 3 to 5 years. FRBs issued by financial
institutions are generally unsecured while those from private corporates are secured. The FRBs are
pegged to different reference rates such as T-bills or bank deposit rates. The FRBs issued by the
Government of India are in the form of Stock Certificates or issued by credit to SGL accounts
maintained by the RBI.

➢ Government Securities

These are medium to long term interest-bearing obligations issued through the RBI by the
Government of India and state governments. The RBI decides the cut-off coupon on the basis of bids
received during auctions. There are issues where the rate is pre-specified and the investor only bids
for the quantity. In most cases the coupon is paid semi-annually with bullet redemption features

➢ Treasury Bills

T-bills are short-term obligations issued through the RBI by the Government of India at a discount.
The RBI issues T-bills for different tenures: now 91 -days and 364-days. These treasury bills are issued
through an auction procedure. The yield is determined on the basis of bids tendered and accepted.

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➢ Bank/FI Bonds

Most of the institutional bonds are in the form of promissory notes transferable by endorsement and
delivery. These are negotiable certificates, issued by the Financial Institutions such as the IDBI/ICICI/
IFCI or by commercial banks. These instruments have been issued both as regular income bonds and
as discounted long-term instruments (deep discount bonds).

SECURITY ANALYSIS

Security analysis is the initial phase of the portfolio management process. This step consists of
examining the risk-return characteristics of individual securities. A basic strategy in securities
investment is to buy underpriced securities and sell overpriced securities.

There are two approaches to security analysis, namely fundamental analysis and technical
analysis.

Fundamental analysis is really a logical and systematic approach to estimating the future
dividends and share price. It is based on the basic premise that the share price is determined by a
number of fundamental factors relating to the economy, industry, and company.

Each share is assumed to have an economic worth based on its present and future earning capacity.
This is called its intrinsic value or fundamental value. The investor can then compare the intrinsic
value of the share with the prevailing market price to arrive at an investment decision. If the market
price of the share is lower than its intrinsic value, the investor would decide to buy the share as it
is underpriced. The price of such a share is expected to move up in the future to match with its
intrinsic value.

On the contrary, when the market price of a share is higher than its intrinsic value, it is perceived
to be overpriced. The market price of such a share is expected to come down in future and hence,
the investor would decide to sell such a share.

The fundamental approach calls upon the investor to make his buy or sell decision on the basis of
a detailed analysis of the information about the company, the industry to which the company

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belongs, and the economy in which it is established. Thus, a fundamental makes use of EIC
(Economy, Industry, and Company) framework of analysis.

Fundamental analysis thus involves three steps:

1. Economy Analysis
2. Industry Analysis
3. Company Analysis

Economy analysis is the first stage of fundamental analysis and starts with an analysis of historical
performance of the economy. But as an investment is a future oriented activity, the investor is
more interested in the expected future performance of the overall economy. Economic forecasting
thus becomes a key activity in economic analysis.

FORECASTING TECHNIQUES

Economic forecasting may be carried out for short term periods (up to three years), intermediate
term periods (three to five years) and long-term periods (more than five years). Some of the
techniques of short term economic forecasting are discussed below:

Anticipatory Surveys

Much of the activities in government, business, trade and industry are planned in advance and
stated in the form of budgets. To the extent that institutions and people plan and budget for
expenditures in advance, surveys of their intentions can provide valuable input to short term
economic forecasting.

Barometric or Indicator Approach

To find out how the economy is likely to perform in the future various kinds of indicators such as
time series data of certain economic variables are studied to economic forecasting.

Econometric Model Building

This technique makes use of Econometrics, which is a discipline that applies mathematical and
statistical techniques to economic theory. The precise relationship between the dependent and

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independent variables are specified in a formal mathematical manner in the form of equations. The
system of the equation is then solved to yield a forecast that is quite precise.

Opportunistic Model Building

It is also known as GNP model building or sectoral analysis. Initially, an analyst estimates the
total demand in the economy, and based on this he estimates the total income or GNP for the
forecast period. This initial estimate takes into consideration the prevailing economic environment
such as existing tax rates, interest rates, and rate of inflation and economic and fiscal policies of
the government.

Industry analysis is to determine the stage of growth through which the industry is passing.
Industry analysis refers to an evaluation of the relative strengths and weaknesses of particular
industries.

A number of key characteristics that should be considered by the analyst. These features broadly
relate to the operational and structural aspects of the industry. They have a bearing on the prospects
of the industry. Some of these are discussed below:

Demand Supply Gap

An industry is likely to experience under supply and over-supply of capacity at different times,
usually the demand for the product tends to change at a steady rate. Excess supply reduces the
profitability of the industry through a decline in the unit price realization. Therefore, the gap
between demand and supply in an industry is fairly good indicator of its short-term or medium-
term prospects.

Competitive Conditions in the Industry

The level of competition among various companies in an industry is determined by certain

competitive forces. These competitive forces are: barriers to entry, the threat of substitution,
bargaining power of the buyers/suppliers, and the rivalry among competitors.

Labor conditions

If the labour in a particular industry is rebellious and is inclined to resort to strikes frequently, the
prospects of that industry cannot become bright.

17 | P a g e
Attitude of Government

The government may encourage the growth of certain industries and can assist such industries
through favourable legislation or vice-versa. In India, this has been the experience of alcoholic
drinks and cigarette industries.

Company analysis is the final stage of fundamental analysis. In company analysis, the analyst
tries to forecast the future earnings of the company because there is strong evidence that earnings
have a direct and powerful effect upon share prices. The level, trend and stability of earnings of a
company, however, depend upon a number of factors concerning the operations of the company.

Financial Statements

The prosperity of a company would depend upon its profitability and financial health. The financial
statements published by a company periodically help us to assess the profitability and financial
health of the company. The Balance Sheet and the Profit and Loss Account are two basic
financial statements provided by accompany.

Financial ratios are most extensively used to evaluate the financial performance of the company.
Four groups of ratios may be used for analyzing the performance of a company.

Liquidity Ratios

These measure the company’s ability to fulfil its short term obligations and reflect its short term
financial strength or liquidity.

1. Current ratio = Current Assets

Current Liabilities

2. Quick Ratio = Current Assets – Prepaid expenses

Current Liabilities

3. Leverage Ratios

(i) Debt-Equity Ratio = Long-term debt

Shareholder’s equity

18 | P a g e
 (ii) Total debt ratio = Total Debt
Total Assets

(iii) Proprietary Ratio = Shareholders’ equity

Total Assets

(iv) Interest Coverage Ratio = Earnings before interest and Taxes

Interest
4. Profitability Ratios

(i) Gross Profit Ratio = Gross Profit

Net Sales

(ii) Operating Profit Ratio = EBIT

Net Sales

(iii) Net Profit Ratio = Earnings after tax

Net Sales

(iv) Return on Capital Employed = EBIT

Total Capital Employed

(v) EPS = Net profit available to equity shareholders

Number of equity shares

(vi) Dividend Payout Ratio = DPS

EPS

19 | P a g e
 (vii) Price- Earnings Ratio = Market Price per share
EPS

(viii) Return on Investment = Earnings after taxes

Total Assets

Technical analysis believes that share price are determined by the demand and supply forces
operating in the market. A technical analyst therefore concentrates on the movement of share
prices. He claims that by examining past share price movement future share prices can be
accurately predicted. Thus, technical analysis is really a study of past or historical price and volume
movements so as to predict the future stock price behavior.

Bar Chart

It is perhaps the most popular chart used by technical analysts. In this chart, the highest price, the
lowest price and the closing price of each day are plotted on a day-to-day basis.

20 | P a g e
 COMPANY PROFILE

Introduction

Sharekhan is one of the leading retail broking House of SSKI Group which was running
successfully since 1922 in the country. It is the retail supplier arm of the Mumbai-based totally
completely SSKI Group, which has more than 8 years of involvement inside the stock broker
corporation. Sharekhan gives its customers a huge kind of fairness associated services together
with trade execution on BSE, NSE, Derivatives, depository offerings, on-line buying and selling,
investment advisory, Mutual Fund Advisory and so on.

The agency’s on-line shopping for and promoting and investment internet web page -
www.Sharekhan.Com - come to be launched on Feb 8, 2000. The internet web site gives get proper
of access to superior content material and transaction facility to retail customers during country.
Known for its jargon-unfastened, investor great language and high excellent studies, the website
online has a registered base of over lakh customers. The wide range of buying and promoting
members presently stands More than eight Lacs. While on-line shopping for and selling presently
debts for definitely over 8 in line with cent of each day buying and selling in shares in India,
Sharekhan on my own money owed for 32 consistent with cent of the volumes traded on-line.

The content fabric fabric-wealthy and research oriented portal has stood out among its
contemporaries due to its steadfast dedication to offering customers incredible-of-breed
technology and advanced marketplace facts. The goal has been to permit clients make
knowledgeable options and to simplify the approach of making a funding in shares.

On April 17, 2002 Sharekhan released Speed Trade, an internet-primarily based executable
software program that emulates the supplier terminals collectively with host of other facts relevant

21 | P a g e
to the Day Traders. This became for the number one time that a net-primarily based definitely
trading station of this first rate modified into furnished to the purchasers. In the very last six months
Speed Trade has come to be a de facto present day for the Day Trading community over the net.

On October 01, 2007 Sharekhan once more launched his a few other integrated Software based
product Trade Tiger, a net-primarily based absolutely executable application that emulates the
broking terminals together with host of numerous information relevant to the Day Traders. It has
a few other remarkable which differs it from unique that it has the blended terminal for equity and
commodities every.

Share khan’s ground community includes over 1005 centers in 410 towns in India, of which 210
are absolutely-owned branches. Sharekhan has usually believed in making a funding in era to
construct its company. The business enterprise has used a number of the best-diagnosed names
within the IT enterprise, like Sun Microsystems, Oracle, Microsoft, Cambridge Technologies,
Nexgenix, Vignette, Verisign Financial Technologies India Ltd, Spider Software Pvt. Ltd. To
assemble its buying and selling engine and content material cloth. Previously the Morakiya family
holds a majority stake in the agency but now a worldwide famous brand CITI GROUP has taken
a majority stake in the agency. HSBC, Intel & Carlyle are the alternative investors.

With a legacy of greater than 80 years inside the inventory markets, the SSKI company ventured
into institutional broker and business enterprise finance 18 years inside the past. Presently SSKI is
one of the primary game enthusiasts in institutional dealer and enterprise business enterprise
finance sports activities. SSKI holds a massive part of the marketplace in every of these segments.
SSKI’s institutional broking arm payments for 7% of the marketplace for Foreign Institutional
portfolio funding and 5% of all Domestic Institutional portfolio funding within the country. It has
60 institutional customers spread over India, Far East, UK and US. Foreign Institutional Investors
generate approximately 65% of the agency’s income, with each day turnover of over US$ four
million. The Corporate Finance segment has a listing of very prestigious customers and has many
‘firsts’ to its credit score rating, in phrases of the size of deal, region tapped and so forth. The
organisation has located over US$ 1 billion in non-public fairness gives. Some of the customers
include BPL Cellular Holding, Gujarat Pipavav, Essar, Hutchison, Planetasia, and Shopper’s Stop.

22 | P a g e
Sharekhan Business

1. Brokering business.

2. White feathering house production.

Vision

To be the best retail broking brand in the retail business of the stock market.

Mission

To educate and empower the individual investor to make better investment decisions through
quality advices and superior services.

• Share khan is the retail broking arm of SSKI, an organization with more than eight decade
of trust and credibility in the stock market.
• Amongst pioneers of investment research in the Indian market.
• In 1984 venture into institutional broking and the corporate finance.
• Leading domestic player in the Indian institutional business.
• Over US$5 billion of private equity deal.
• SSKI group companies
• SSKI investor services ltd (Sharekhan)
• S.S. Kantilal Isharlal securities
• SSKI corporate finance.

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SSKI - Corporate Structure

Figure 1.1: Corporate Structure SSKI

Sharekhan profile

Sharekhan retail broking

• Among the top three (3) branded retail services providers (Rs 856 crs average daily volume.
• NO. 2 player in online business
• Large network of branded broking outlets in the country servicing around 5, 45, 000 Clients

Management Team

Board of Directors

24 | P a g e
Benefits

• Free Depository A/c

• Secure Order by Voice Tool Dial-n-Trade.
• Automated Portfolio to keep track of the value of your actual purchases.
• 24x7 Voice Tool access to your trading account.
• Personalized Price and Account Alerts delivered instantly to your Cell Phone & E-mail
address.
• Special Personal Inbox for order and trade confirmations.
• On-line Customer Service via Web Chat.
• Anytime Ordering.
• NSDL Account
• Instant Cash Tranferation.
• Multiple Bank Option.
• Enjoy Automated Portfolio.
• Buy or sell even single share.

Branch - Head Office

A-206, Phoenix House, 2nd Floor, Senapati Bapat Marg, Lower Parel, Mumbai- 400 013.
Telephone No: 67482000 Email: [email protected]

Key officials Designation

Mr. Shripal Morakhia Chairman
Mr. Tarun Shah CEO
Mr. Kaliyan Raman
Mr. Jason Pandey and Mr. Pradeep Sales Head DP Head
Mr. Hemendra Aggarwal Cluster Head
Mr. Amit pal Singh and Mr. Maneet Rastogi Regional Sales Manager

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Products of Sharekhan

Classic Account

This account allows the client to trade through the website www.sharekhan.com and is suitable for
the retail investor who is risk-averse and hence prefers to invest in stocks or who do not trade too
frequently.

It allows investor to buy and sell stocks online along with the following features like multiple
watch lists, Integrated Banking, De-mat and Digital contracts, Real-time portfolio tracking with
price alerts and Instant money transfer.

Features

• Online trading account for investing in Equity and Derivatives via www.sharekhan.com
• Live Terminal and Single terminal for NSE Cash, NSE F&O, BSE & Mutual Funds (online
and offline).
• Integration of On-line trading, Saving Bank and De-Mat Accounts.
• Instant cash transfer facility against purchase & sale of shares.
• Competative transaction charges.
• Instant order and trade confirmation by E-mail.
• Streaming Quotes (Cash & Derivatives).
• Personlized market watch.
• Single screen interface for Cash and derivatives and more.
• Provision to enter price trigger and view the same online in market watch.

Trade Tiger

TRADE TIGER is an internet-based software application which is the combination of EQUITY &
COMMODITIES, that enables you to buy and sell share and well as commodities item instantly.
It is ideal for every client of SHAREKHAN LTD.

26 | P a g e
Features

• Integration of EQUITY & COMMODITIES MARKET.

• Instant order Execution and Confirmation.
• Single screen trading terminal for NSE Cash, NSE F&O & BSE & Commodities.
• Technical Studies.
• Multiple Charting.
• Real-time streaming quotes, tic-by-tic charts.
• Market summary (Cost traded scrip, highest value etc.)
• Hot keys similar to broker’s terminal.
• Alerts and reminders.
• Back-up facility to place trades on Direct Phone lines.
• Live market debts.

Dial-n-trade

Along with enabling access for your trade online, the CLASSIC and TRADE TIGER ACCOUNT
also gives you our Dial-n-trade services. With this service, all you have to do is dial our dedicated
phone lines which are 1800-22-7500, 3970-7500.

PORTFOLIO MANAGEMENT SERVICES

Sharekhan is also having Portfolio Management Services for Exclusive clients.

1. Proprime - Research & Fundamental Analysis

Ideal for investors looking at steady and superior returns with low to medium risk appetite. This
portfolio consists of a blend of quality blue-chip and growth stocks ensuring a balanced portfolio
with relatively medium risk profile. The portfolio will mostly have large capitalization stocks
based on sectors & themes that have medium to long term growth potential.

27 | P a g e
2. Protech - Technical Analysis

Protech uses the knowledge of technical analysis and the power of derivatives market to identify
trading opportunities in the market. The Protech lines of products are designed around various
risk/reward/ volatility profiles for different kinds of investment needs.

• Thrifty Nifty: Nifty futures are bought and sold on the basis of an automated trading
system that generates calls to go long/short. The exposure never exceeds value of portfolio
i.e. there is no leveraging; but being short in nifty allows you to earn even in falling markets
and there by generates linear
• Beta Portfolio: Positional trading opportunities are identified in the futures segment based
on technical analysis. Inflection points in the momentum cycles are identified to go
long/short on stock/index futures with 1-2-month time horizon. The idea is to generate the
best possible returns in the medium term irrespective of the direction of the market without
really leveraging beyond the portfolio value. Risk protection is done based on stop losses
on daily closing prices.
• Star Nifty: Trailing Stops Momentum trading techniques are used to spot short term
momentum of 5-10 days in stocks and stocks/index futures. Trailing stop loss method of
risk management or profit protection is used to lower the portfolio volatility and maximize
returns. Trading opportunities are explored both on the long and the short side as the market
demands to get the best of both upwards & downward trends.

3. Proarbitrage: Exploit Price Analysis

Online IPO's and mutual funds advisory is available.

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 Process of Account Opening

29 | P a g e
Charge Structure

Pre-paid or AMC a/c: -

• Advance Amount which will be fully adjusted against your brokerage you paid in One
year.

Following Schemes Are Available: - Brokerage will be charged -

750/- Scheme:- 0.05 / 0.50 %
1000/- Scheme 0.045 / 0.45 %
2,000/- Scheme: - 0.035 / 0.40 %
6,000/- Scheme: - 0.025 / 0.25 %
18,000/- Scheme: - 0.020 / 0.20 %
30,000/- Scheme: - 0.015 / 0.18 %
60,000/- Scheme: - 0.010 / 0.15 %
1,00,000/- Scheme: - 0.0075 / 0.10 %

Minimum Margin of Rs. 25000/- is required for Account Opening

Annual Maintenance Charges will NIL for 1st year and Rs. 375/- from 2nd year.

• Exposure: 4 times (on margin money)

• Exposure: 10 times (on max trading)
• Online IPO's and mutual funds advisory is available.

We are having tie-up with eleven banks for online fund transferring i.e. HDFC, ICICI, IDBI, CITI,
Union Bank of India, Oriental Bank of Commerce, INDUSIND, AXIS, Centurian Bank of Punjab,
Bank of India and Yes Bank.

Company Provide 4-6 E-mail to their customers per day.

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Online Trade in Share

Sharekhan customers can online trade through their computers, through internet during the market
timings.

Online Fund Transfer

We have tie up with Eleven Banks for online fund transferring i.e. HDFC, IDBI, CITI, UBI, OBC,
INDSLANDAND and UTI BANK, Yes bank, Bank of India for Online Money Transfer.

• Research based investment advice

• Investment and trading services
• Trading and seminars
• Technology based investment tools
• Integrated demat facility
• Customer can trade in
1. Equities
2. Derivatives
3. Commodities

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 SWOT ANALYSIS OF SHAREKHAN (MY OBSERVATIONS)

Strengths

1. Big client base

2. In-house research house
3. online as well as offline trading
4. Online IPO/ MF services
5. Share shops
6. Transparent
7. User friendly tie ups with 10 banks
8. Excellent order execution speed and reliability

Weakness

1. Lack of awareness among customer

2. Less focus on customer retention
3. Less Exposure

Opportunities

1. Diversification
2. Product modification
3. Improve Web based trading
4. Provide competitive brokerage
5. Concentrate on PMS
6. Focus on Institutional investors
7. Concentrate on HNI’s (high net worth investor)

Threats

1. Aggressive promotional strategies by close competitor like Religare, Angel Broking and
India bulls.
2. More and more players are venturing into this domain, which can further reduce the earning
of Share Khan.
3. Stock market is very volatile; risk involves is very high.

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 CHAPTER 2

OBJECTIVE OF THE STUDY

OBJECTIVES OF THE STUDY

The main objectives of the study are:

• To calculate the return of various companies.

• To calculate the risk of various companies.
• To evaluate the performance of various portfolios.
• To understand, analyze and select the best portfolio.
• To understand the effect of diversification of investment.
• To calculate the portfolio return & risk of different portfolios designed for the combination
of various companies.

IMPORTANCE OF THE STUDY

The reason why people study portfolio management or what is the need of studying portfolio
management is expressed as under:

There was a time when portfolio management was an exotic term, an elite practice beyond the
reach of ordinary people, in India. The scenario has changed drastically. Portfolio management is
now a familiar term and is widely practiced in India. The theories and concepts relating to portfolio
management now find their way to the minds of investors in India.

In the beginning of the nineties, India embarked on a programme of economic liberalization and
globalization. This reform process has made the Indian capital markets active. The Indian stock
markets are steadily moving towards higher efficiency, with rapid computerization, increasing
market transparency, better infrastructure, better customer service, closer integration and higher
volumes. The markets are dominated by large institutional investors with their diversified

33 | P a g e
portfolios. A large number of mutual funds have been set up in the country since 1987. With this
development, investment in securities has gained considerable momentum.

Along with the spread of securities investment among ordinary investors, the acceptance of
quantitative techniques by the investment community changed the investment scenario in India.
Professional portfolio management, backed by competent research, began to be practiced by
mutual funds, investment consultants and big brokers. The Securities and Exchange Board of India
(SEBI), the stock market regulatory body in India, is supervising the whole process with a view to
making portfolio management a responsible professional service to be rendered by experts in the
field.

The trend towards liberalization and globalization of the economy has promoted free flow of
capital across international borders. Portfolios now include not only domestic securities but also
foreign securities. Diversification has become international. In this context, financial investments
cannot be conceived of without portfolio management.

Thus, to achieve efficiency in investment and to minimize the risk, study of Portfolio management
is vital.

NEED FOR THE STUDY

The important reason for the situation is owing to the rapid growth of the Asset Management
companies and the portfolio services rendered by them. The developments in the field of portfolio
management are continuing apace. In fact, the phases of portfolio management namely
professionalism and scientific analysis are currently advancing simultaneously.

Surprisingly the research studies dealing with portfolio management aspects of Asset Management
Companies (AMC’s) are rarely conducted in India. Against this background it is felt that there is
a need for the study of portfolio management to examine the scope application of the Asset
Management Companies in enhancing the growth of financial investments.

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SCOPE OF THE STUDY

This study covers the Markowitz model. The study covers the calculation of correlations between
the different securities in order to find out at what percentage funds should be invested among the
companies in the portfolio. Also the study includes the calculation of individual Standard
Deviation of securities and ends at the calculation of weights of individual securities involved in
the portfolio. These percentages help in allocating the funds available for investment based on
risky portfolios.

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 CHAPTER 3

REVIEW OF LITERATURE
Jamadar Lal (1992) presents a profile of Indian investors and evaluates their investment
decisions. He made an effort to study their familiarity with, and comprehension of financial
information, and the extent to which this is put to use. The information that the companies provide
generally fails to meet the needs of a variety of individual investors and there is a general
impression that the company's Annual Report and other statements are not well received by them.

Jack Clark Francis (1986) revealed the importance of the rate of return in investments and
reviewed the possibility of default and bankruptcy risk. He opined that in an uncertain world,
investors cannot predict exactly what rate of return an investment will yield. However, he
suggested that the investors can formulate a probability distribution of the possible rates of return.

New academic portfolio theory is an extension of traditional portfolio advice first posited by
Markowitz (Journal of Finance, 1952). The traditional advice suggests a “two-fund theorem” that
allocates between risk-free bonds and a broad-based passively managed stock fund. The most
efficient portfolios, those on the mean– variance frontier, can be formed by combining those two
asset classes. Tailoring portfolios by adding style-based asset classes is inefficient because each of
these classes lies on or inside the frontier. Therefore, every investor needs to hold only the two
basic asset classes, with risk aversion determining the proportions.

John H. Cochrane

Economic Perspectives, Federal Reserve Bank of Chicago, vol. 23, no. 3 (Third Quarter
1999):59–78

Investors today face numerous and often bewildering investment decisions. Investors used to have
fairly straightforward choices to make, selecting among managed mutual funds, index funds, and
expensive trading in a personal account. Today, a wide variety of styles exist among funds, active
managers offer customized and complex strategies, and inexpensive online trading is widely
available. The author reviews these issues and addresses how they affect asset allocation decisions,
particularly in multifactor models. He also examines return predictability and describes how the
stock market acts as a large insurance market by facilitating the transfer of risk among investors.

36 | P a g e
Lubos Pastor

Journal of Finance, vol. 55, no. 1 (February 2000):179–223

The author develops a portfolio-selection method using a Bayesian framework that incorporates a
prior degree of belief in an asset-pricing model. In the empirical analysis, the author evaluates
sample evidence on home bias, value, and size effect from an asset allocation perspective. The
results provide a different perspective from that normally found in the literature on the benefits of
international diversification.

Gustavo Grullon and Roni Michaely

Journal of Finance, vol. 57, no. 4 (August 2002):1649–84

Cash dividends and stock repurchases are two major forms of payout to stockholders. They
influence stock prices and returns and thus decisions for investing and trading in stocks. The
authors analyze the behaviour of U.S. corporations that paid dividends and repurchased shares in
the 1972–2000 period. They address the relative merits of dividends and repurchases from the
corporation’s point of view, the substitutability between the two forms of payout, and the
differences in their tax treatment from the investor’s perspective. Their findings are of interest to
corporate financial officers, equity analysts, and portfolio managers.

Osthoff, Peer C. and Kempf, Alexander. (2007) “The Effect of Socially Responsible Investing
on Portfolio Performance”. In European Financial Management, Vol. 13, No. 5, pp. 908-922.

Abstract:

More and more investors apply socially responsible screens when building their stock portfolios.
This raises the question whether these investors can increase their performance by incorporating
such screens into their investment process. To answer this question, we implement a simple trading
strategy based on socially responsible ratings from the KLD Research & Analytics: Buy stocks
with high socially responsible ratings and sell stocks with low socially responsible ratings. We
find that this strategy leads to high abnormal returns of up to 8.7% per year. The maximum
abnormal returns are reached when investors employ the best-in-class screening approach, use a
combination of several socially responsible screens at the same time, and restrict themselves to
stocks with extreme socially responsible ratings.

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 CHAPTER 4

RESEARCH METHODOLOGY

RESEARCH DESIGN

❖ Research type: - Empirical

❖ Type of sampling: - Convenient sampling
❖ Sample size: - 5 companies from different sectors is selected from NSE CNX Nifty
❖ Sample universe: - Companies listed & trade in NSE
❖ Data type: - Secondary data
❖ Research tools used: -

a. Arithmetic average or mean

b. Return = Dividend + (Current price - Previous price) * 100
Previous price
c. Standard deviation
d. Variance
e. Correlation - Karl Pearson’s method
f. Sharpe’s Index
g. Treynor’s Index
h. Jenson’s Index

Data collection methods

The entire date was collected from the secondary source. Internet is main source of secondary
sources of date collection used. Magazines, Newspapers and Journals were also used for collecting
data

38 | P a g e
Analysis and Interpretations

The analysis and interpretation has been made with the help of graphs and percentage of returns
of securities. Microsoft Excel 2013 & IBM SPSS Statistics 20 is the software used for this purpose.

LIMITATIONS OF THE STUDY

As far as the LIMITATION of the project is concerned, I faced many a problem and adversities
in course of my project duration.

• The sample size is limited by 5 stocks from 5 different sectors.

• Markowitz modern portfolio theory is used here to calculate return & risk of portfolio.
• Portfolio created for the study is of 2 securities/stock combination, for making study
easier and understandable. Portfolios with 2 or more number of stock can give a wider
image of portfolio management.
• While constructing portfolios the stock is given equal weightage, return & risk will
change if weightage is different.
• The data was collected from the time horizon of one financial year starting from April
2019 to March 2020.
• The data has been collected from secondary sources only, relevance of information may
not fully trustworthy.

39 | P a g e
 CHAPTER 5

DATA ANALYSIS AND INTERPRETATION

Return & Risk of Benchmark index: NSE CNX NIFTY

Return, R (Avg) Calculation

Table 4.1: Return, R (Avg) Calculation of NSE CNX Nifty

Return, R = Dividend + (P1 - P0)/P0*100

FY20 (MoM) Return for NSE CNX Nifty = 1.92%

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Risk, S.D Calculation

Table 4.2: Risk, S.D Calculation of NSE CNX Nifty

Risk, S.D, σ = Square root (Σ(R - Avg R) ^2) / N-1

FY20 (MoM) Risk for NSE CNX Nifty = 3.88

The NSE CNX Nifty had given a good return of 1.92% per month with an adjusted risk rate of
3.88 during the financial year 2020.

41 | P a g e
Return & Risk of Individual Stocks

1. HDFC Bank Limited

HDFC Bank Limited is an Indian banking and financial services company headquartered in
Mumbai, Maharashtra. Incorporated in 1994, it is the fifth largest bank in India as measured by
assets. It is the largest private sector bank in India by market capitalization as of February 2014.
The bank was promoted by the Housing Development Finance Corporation, a premier housing
finance company (set up in 1977) of India. According to the Brand Trust Report 2014, HDFC was
ranked 32nd among India's most trusted brands. HDFC was ranked 45th on the list of top 50 Banks
in the world in terms of their market capitalization.

Return, R (Avg) Calculation

Table 4.3: Return, R (Avg) Calculation of HDFC Bank Limited

Return, R = Dividend + (P1 - P0)/P0*100

FY20 (MoM) Return for HDFC Bank Limited = 2.90%

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Risk, S.D Calculation

Table 4.4: Risk, S.D Calculation of HDFC Bank Limited

Risk, S.D, σ = Square root (Σ (R - Avg R) ^2) / N-1

FY20 (MoM) Risk for HDFC Bank Limited = 5.22

The HDFC Bank Limited had given a good return of 2.90% per month with a high risk rate of
5.22 during the financial year 2020. The return includes a dividend of 6.85 per share.

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2. Lupin Limited

Lupin Limited is a transnational pharmaceutical company based in Mumbai. It is the seventh-

largest company by market capitalization; and the 10th-largest generic pharmaceutical company
by revenue globally. Lupin is the fifth-largest generic pharmaceutical company in the US by
prescription-led market share and 3rd largest Indian pharma company by revenue. It has the
distinction of being the fastest growing generic pharmaceutical player in the two largest
pharmaceutical markets of the world – the US and Japan; and is the 4th largest and the fastest
growing generic pharmaceutical player in South Africa.

Return, R (Avg.) Calculation

Table 4.5: Return, R (Avg.) Calculation of Lupin Limited

Return, R = Dividend + (P1 - P0)/P0*100

FY20 (MoM) Return for Lupin Limited = 7.13%

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Risk, S.D Calculation

Table 4.6: Risk, S.D Calculation of Lupin Limited

Risk, S.D, σ = Square root (Σ (R - Avg R) ^2) / N-1

FY20 (MoM) Risk for Lupin Limited = 7.17

The Lupin Limited had given an excellent return of 7.13% with comparatively low risk of 7.17
during FY 20. The return includes a dividend of 3 per share.

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3. Hindustan Unilever

Hindustan Unilever Limited (HUL) is an Indian consumer goods company based in Mumbai,
Maharashtra. It is owned by Anglo-Dutch Company Unilever which owns a 51.51% controlling
share in HUL as of March 2015 and is the holding company of HUL. HUL's products include
foods, beverages, cleaning agents, personal care products and water purifiers.

Return, R (Avg.) Calculation

Table 4.7: Return, R (Avg.) Calculation of HUL

Return, R = Dividend + (P1 - P0)/P0*100

FY20 (MoM) Return for Hindustan Unilever Limited = 4.37%

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Risk, S.D Calculation

Table 4.8: Risk, S.D Calculation of HUL

Risk, S.D, σ = Square root (Σ(R - Avg R) ^2) / N-1

FY20 (MoM) Risk for Hindustan Unilever Limited = 8.49

The HUL has given a return of 4.37% with a high risk of 8.49 during FY20 (MoM). Which includes
a dividend of 13.50 per share.
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4. Tata Consultancy Services

Tata Consultancy Services Limited (TCS) is an Indian multinational information technology (IT)
service, consulting and business solutions company headquartered in Mumbai, Maharashtra. TCS
operates in 46 countries. It is a subsidiary of the Tata Group and is listed on the Bombay Stock
Exchange and the National Stock Exchange of India. TCS is one of the largest Indian companies
by market capitalization ($80 billion) and is the largest India-based IT services company by 2013
revenues. TCS is now placed among the ‘Big 4’ most valuable IT services brands worldwide. In
2013, TCS is ranked 57th overall in the Forbes World's Most Innovative Companies ranking,
making it both the highest-ranked IT services company and the first Indian company. It is the
world's 10th largest IT services provider, measured by the revenues.

Return, R (Avg) Calculation

Table 4.9: Return, R (Avg) Calculation of TCS

Return, R = Dividend + (P1 - P0)/P0*100

FY20 (MoM) Return for Tata Consultancy Services Limited = 6.98%

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Risk, S.D Calculation

Table 4.10: Risk, S.D Calculation of TCS

Risk, S.D, σ = Square root (Σ(R - Avg R) ^2) / N-1

FY20 (MoM) Risk for Tata Consultancy Services Limited = 16.80

The TCS has got extremely high risk of 16.80 with a return of 6.98% during FY20 (MoM). And
also the return includes a total dividend of 70 per share.

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5. Tata Motors

Tata Motors Limited (formerly TELCO, short for Tata Engineering and Locomotive Company) is
an Indian multinational automotive manufacturing company headquartered in Mumbai,
Maharashtra, India and a subsidiary of the Tata Group. Its products include passenger cars, trucks,
vans, coaches, buses, construction equipment and military vehicles. It is the world's 17th-largest
motor vehicle manufacturing company, fourth-largest truck manufacturer, and second-largest bus
manufacturer by volume.

Return, R (Avg) Calculation

Table 4.11: Return, R (Avg) Calculation of Tata Motors

Return, R = Dividend + (P1 - P0)/P0*100

FY20 (MoM) Return for Tata Motors Limited = 2.79%

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Risk, S.D Calculation

Table 4.12: Risk, S.D Calculation of Tata Motors

Risk, S.D, σ = Square root (Σ(R - Avg R) ^2) / N-1

FY20 (MoM) Risk for Tata Motors Limited = 8.24

The Tata Motors has given a low return of 2.79% compared to others with a high risk of 8.24. The
return includes a dividend of 2 per share.

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 Beta, β of stocks

Beta, β of stocks with respect to NSE CNX Nifty

Where,

ra = return of individual stock

rp = return of NSE CNX Nifty

Table 4.13: Beta of Stock

When,

β > 1 = Aggressive

β = 1 = Moderate

β < 1 = Conservative

HDFC Bank, HUL, & Tata Motors are beating the market return with beta of 1.13, 1.73, & 1.42
respectively. So, they are very aggressive. While, Lupin & TCS has got low beta of -0.41 & 0.07
respectively. So, they are conservative.

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 Return, Risk, & Beta of Stocks

Return, Risk, & Beta of individual stock for FY15 (MoM) is as follows:

Table 4.14 Return, Risk, & Beta of individual stock for FY15 (MoM)

Graph 4.1: Return, Risk & Beta of Individual Stocks FY20 (MoM)

Interpretation:

The Lupin & TCS is the top performer in terms of return. But while comparing the risk adjusted
return Lupin is the out-performer compared to rest 4 stock. The Lupin has a given a return of
7.13% with adjustable risk of 7.17 and got a beta of -0.41.

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 Correlation & Covariance of Portfolios

Table 4.15: Correlation & Covariance of Portfolios

Interpretation:

Correlation between stocks/securities should be negative. So, that if one stock moves up other
moves down therefore the loss and profit will be limited in the portfolio and risk also will be low.

If the correlation between stocks/securities is positive, there is a chance of unlimited loss and
unlimited profit in the portfolio. The risk of portfolio will be comparatively high.

Combination of HDFC Bank & Lupin, HDFC Bank & TCS and TCS & Tata Motors has got
negative correlation, which is better.

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 Return & Risk of Various Portfolios

Calculation of Portfolio Return:

Rp = (RA*WA) + (RB*WB)
Where Rp = portfolio return
RA= return of A WA= weight of A
RB= return of B WB= weight of B

Calculation of Portfolio Risk:

Portfolio Risk = SQRT [((Wx^2*SdX^2) + (Wy^2*SdY^2) + (2*Wx*Wy*(rxy*Sdx*Sdy)))]

WHERE,
Wx, Wy = proportion of total portfolio invested in security X& Y respectively
sdx, sdy = standard deviation of stock X & stock Y respectively
rxy = correlation coefficient of x & y

Portfolio 1

Table 4.16: Return and Risk of Portfolio 1

Portfolio Return, Rp = (2.90*0.50) + (7.13*0.50) = 5.015%

Portfolio Risk = 3.71

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Portfolio 2

Table 4.17: Return and Risk of Portfolio 2

Portfolio Return, Rp = (2.90*0.50) + (4.37*0.50) = 3.64%

Portfolio Risk = 6.52

Portfolio 3

Table 4.18: Return and Risk of Portfolio 3

Portfolio Return, Rp = (2.90*0.50) + (6.98*0.50) = 4.94%

Portfolio Risk = 8.38

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Portfolio 4

Table 4.19: Return and Risk of Portfolio 4

Portfolio Return, Rp = (2.90*0.50) + (2.79*0.50) = 2.845%

Portfolio Risk = 5.93

Portfolio 5

Table 4.20: Return and Risk of Portfolio 5

Portfolio Return, Rp = (7.13*0.50) + (4.37*0.50) = 5.75%

Portfolio Risk = 6.14

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Portfolio 6

Table 4.21: Return and Risk of Portfolio 6

Portfolio Return, Rp = (7.13*0.50) + (6.98*0.50) = 7.055%

Portfolio Risk = 10.84

Portfolio 7

Table 4.22: Return and Risk of Portfolio 7

Portfolio Return, Rp = (7.13*0.50) + (2.79*0.50) = 4.96%

Portfolio Risk = 5.98

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Portfolio 8

Table 4.23: Return and Risk of Portfolio 8

Portfolio Return, Rp = (7.13*0.50) + (6.98*0.50) = 5.675%

Portfolio Risk = 10.41

Portfolio 9

Table 4.24: Return and Risk of Portfolio 9

Portfolio Return, Rp = (4.37*0.50) + (2.79*0.50) = 3.58%

Portfolio Risk = 7.71
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Portfolio 10

Table 4.25: Return and Risk of Portfolio 10

Portfolio Return, Rp = (6.98*0.50) + (2.79*0.50) = 4.885%

Portfolio Risk = 9.11

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 Beta, β of Portfolios

Beta, β of portfolio with respect to NSE CNX Nifty

βp = (βx*Wx) + (βy*Wy)

Where,

βp = Beta of portfolio
βx & βy = Beta of stock 1 & stock 2 respectively
Wx & Wy = Weightage of stock 1 & stock 2 respectively

Table 4.26: Beta of Portfolios

When,

βp > 1 = Aggressive
βp = 1 = Moderate
βp < 1 = Conservative

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 Return, Risk, & Beta of Portfolios

Return, Risk, & Beta of various portfolios for FY15 (MoM) is as follows:

Table 4.27: Return, Risk, & Beta of Portfolios

Graph 4.2: Return, Risk & Beta of Portfolios FY20 (MoM)

Taking risk adjusted return: HDFC Bank & Lupin, Lupin & HUL, & Lupin & Tata Motors are the
combinations which are out-performers.

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 Portfolio Performance Evaluation

Sharpe's Index - Sharpe's Performance Index

Sharpe’ Index, Sp = (Rp – T)/SD

Where,

Rp = return of portfolio

T = risk free return

SD = standard deviation

Here, risk free return, T = 8.5% per annum i.e., 0.71 % per month

Table 4.28: Sharpe's Index - Sharpe's Performance Index

A portfolio with highest Sharpe’s Index, Sp is best compared to other portfolios. Which can be
ranked according to that.

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 Graph 4.3: Portfolio Ranks based on Sharpe’s Index

Interpretation:

As per Sharpe’s Index: HDFC Bank & Lupin, Lupin & HUL, Lupin & Tata Motors, Lupin & TCS
and HDFC Bank & TCS are the top 5 with ranks of 1, 2, 3, 4 & 5 respectively. Which are also the
top performers in giving return compared to other combinations.

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 Treynor's Index - Treynor's Reward-to-Variability Measure

Treynor’s Index, Tp = (Rp – T)/βp

Where,

Rp = return of portfolio

T = risk free return

βp = Beta of portfolio

Here, risk free return, T (Bank FD rate) = 8.5% per annum i.e., 0.71 % per month

Table 4.29: Treynor's Index - Treynor's Reward-to-Variability Measure

A portfolio with highest Treynor’s Index, Tp is best compared to other portfolios. Which can be
ranked according to that.

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 Graph 4.4: Portfolio Rank based on Treynor’s Index

Interpretation:

As per Treynor’s Index: HDFC Bank & Lupin, HDFC Bank & TCS, Lupin & Tata Motors, Lupin
& HUL and TCS & Tata Motors are the top 5 with ranks of 1, 2, 3, 4 & 5 respectively.

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 Jenson's Index - Reward to risk ratio

Jenson’s Index, ERP = T + βp * (ERM – T)

Where,

ERM = return of market portfolio, (here mean return of NSE CNX NIFTY)

ERM = 1.92%

T = risk free return

βp = Beta of portfolio

Table 4.30: Jenson's Index - Reward to risk ratio

Portfolio with Rp > ERP = efficient,

Portfolio with Rp < ERP = inefficient

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 Graph 4.5: Return & Expected Return (ERP) of Portfolios

Interpretation:

According to Jenson’s Index: All the portfolios are efficient, which means each portfolio has given
excellent return than the expected return from them.

From the graph it is clear that so many portfolios have beats the estimates in terms of return. Few
of them are Lupin & TCS, Lupin & HUL, HDFC Bank & Lupin, HDFC Bank & TCS and Lupin
& Tata Motors.

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 CHAPTER 6

FINDINGS CONCLUSION AND SUGGESTIONS

FINDINGS

As the study on portfolio management makes me to understand and learn many things. The
findings of the study are:

• Among the individual stock calculation, Lupin is better stock with return of 7.13% and risk
of 7.17 and beta of -0.41. In terms of return TCS is also better with a return of 6.98%, but
the risk is 16.80, which is too high and with a beta of 0.07. So, TCS is not a good option
for investors to invest.
• HUL is also good in terms of return, which is 4.37% with risk of 8.49, but the beta is 1.73.
Therefore, HUL is highly sensitive.
• On portfolio construction, an equal combination of HDFC Bank & Lupin has given a better
risk adjusted return of 5.02% with risk of only 3.71. The beta of HDFC Bank & Lupin is
0.50. The correlation and Covariance between HDFC Bank & Lupin are -0.32 and -11.81
respectively.
• Lupin & HUL and Lupin & Tata Motors are also good enough in risk adjusted return. The
return and risk of Lupin & HUL are 5.75% and 6.14 respectively. The beta of Lupin &
HUL is 0.80 with correlation and covariance of 0.23 and 13.68 respectively. And the return
and risk of Lupin & Tata Motors are 4.96% and 5.98 respectively. The beta of Lupin &
Tata Motors is 0.64 with correlation and covariance of 0.20 and 11.89 respectively.
• A combination of Lupin & TCS is the high return combination with a return of 7.06%, but
the risk is 10.84 and the beta is-0.04.
• On evaluating portfolio performance, HDFC Bank & Lupin ranks 1st in both Sharpe’s and
Treynor’s Index, and also this combination is efficient in Jenson’s Index.
• On coming to Jenson’s Index all portfolios are efficient, they all beats the expected return.
Among them the combination of Lupin & TCS performed well in beating estimation. The
expected return from Lupin & TCS is 0.67%, but the actual return is 7.06%.
• Finally, the noticing thing is that, a portfolio with Lupin is well performed.

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SUGGESTIONS:

Today, the financial market is increasingly complex and managing one’s own portfolio will take
up a lot of time and effort. There are situations when we don’t have time or knowledge to explore
the best investment alternatives in the market. This is a common problem faced by many wannabe
investors. At this juncture, portfolio management services can help investor get out of this
dilemma. So investor can simply assign his investments to portfolio management services who
will report to him regularly on his portfolio performance. Thus, investor will not feel lost in this
complex world of investments and the experts will do their job. Thus, PMS provides the following:

• PMS gives investors access to an institutional process of money management.

• Provides a customized solution by matching the unique circumstances and objectives of
each investor.
• Wealth creation based on disciplined investment process is the crux of PMS.
• Effective diversification helps reduce portfolio volatility and enhances risk-adjusted
returns over long term.
• PMS gives investor direct ownership of the individual securities in the portfolio.

Setting SMART Financial Goals

“An investor without GOAL is like a traveler without a destination.” But setting goals is not an
easy task, it is a continuous ongoing process.

Make SMART GOALS:

S – Specific or Significant

M – Measurable or Meaningful

A – Attainable or Action–Oriented

R – Relevant or Rewarding

T – Time-bound or Trackable

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Setting Financial Goals: Financial Goals are set first and then a road map is created to achieve
them.

But again the basic question – how do I set my financial goals?

Setting Smart Financial Goals

Any goal, financial or otherwise will become a Smart Goal when you following features are added
to it:

1. Smart Financial Goals are SPECIFIC:

Being ―Rich‖ is a goal but not a smart goal. If I put it like this that I wish to plan for my retirement,
so that I am financially independent – it becomes more specific. The statement specifies
―richness‖ and the time by when you want to achieve the goal. But again this is not a smart goal.
Something is missing.

2. Smart Financial Goals are MEASURABLE:

Besides being specific one should also be able to assign a number to the goal. Instead of saying
―financially independent‖ it should define the money in number terms. When you wish to assign
a cost to future expense, you need to guess or calculate the numbers taking a few realistic
assumptions like inflation and interest rates. These assumptions can also vary. For example, the
inflation rate on Education can be much higher in comparison of buying car. So it is an expert’s
job. But when you assign numbers a goal becomes measurable and comparable also. So for the
above example if we say (in present value) – I wish to buy a new car of Rs 10 Lakh and a house
worth RS 60 Lakhs in Goa.

3. Smart Financial Goals are ACHIEVABLE & ATTAINABLE:

Only decorating the goal with number is not a smart work. A goal needs to be thoughtful and has
to be seen in the light of practicality as well. We have to see if this is attainable or not. It should
not be an out of reach dream that one starts to work upon and expect magic to help. Again an
expert advice is required here and he can help you to understand its reality. Also sometimes a non-
achievable may be adjusted and can be made achievable. So we need to sit and give a deep thinking

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and even ask for expert help. Again for the above example – can a person earning Rs 30000/- per
month having 2 kids to support and monthly expense of Rs 20000/- achieve the above mentioned
goals? What if he has not started saving till today? Or what if he is bound to get some inherited
money? So under all these circumstances, which are unique for all individual, we need to check
the attainability criteria of a goal to make it a smart goal.

4. Smart Financial Goals are REALISTIC & RELEVANT:

Goals should be realistic – you can’t say I will build my retirement goals by investing in last 5
years of my job or I will invest Rs 500 per month to achieve my retirement corpus of 3 crores.

5. Smart Financial Goals are TIMELY or TIME-BOUND:

This is last step of setting smart financial goals but very important. There should be some time
limit attached to every goal. For example: I want to buy a car in 5 years or I want to buy a house
in 2030.

Prioritizing Smart Financial Goals

Life is a not like a play script. It does not dwell on one theme or issue. It is full of phases, events
and happenings. In financial life one has to invest today for things he would require in a very short
span like annual premiums or kids hostel fees and for the expense that would be have long span
like kid’s marriage or retirement.

Thus goals need to be put or priority list. Once these are recorded on time frame they can be
classified as immediate goals, mid-term goals and long term goals.

Financial Goals Examples:

Short Term Financial Goals:

• Making a contingency fund or emergency fund for family.

• Saving for school admission of kids.
• Saving for a purchase in near term like a domestic appliance or for treatment of a recently
diagnosed ailment.
• Saving for life insurance premiums.
• Investments for tax planning.

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Medium Term Financial Goals:

• Retiring a loan or debt.

• Planning for a foreign trip or a vacation.
• Saving for college or pre college expenses for your kid.
• Saving for starting a family in coming years.
• Planning for a new or change of vehicle.
• Saving for home/property investment.

Long Term Financial Goals:

• Building retirement corpus. (both, expenses and medical included)

• Saving for providing inheritance.
• Saving for daughter’s marriage etc.
• Planning a home for post-retirement life or a farm house.

While setting SMART financial goals, one should try answering these questions:

• Have you decided your financial goals?

• Have you checked are these goals Smart?
• Have you prioritized and taken action to your financial goals?

If “NO” is the answer to any of these questions, it’s time to prepare Financial Goals outline & start
making smart goals.

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CONCLUSION

On behave of the portfolio management study we can conclude that:

• The aim and objectives of the study has achieved.

• Investors with low risk averse can go for investing in a combination HDFC Bank & Lupin,
as the risk is very low.
• Investors with moderate risk can go for investing in a combination of Lupin & HUL and
Lupin & Tata Motors, as the risk is not so high.
• Investors, who are aggressive can for investing in a combination of Lupin & TCS, HUL &
TCS, TCS & Tata Motors, HDFC Bank & TCS, HDFC Bank & Tata Motors, HDFC Bank
& HUL, and TCS & Tata Motors.
• Don’t put your trust in only one investment. It is like “putting all the eggs in one basket”
This will help to reduce the risk in the long term.
• The investors are benefited by investing in selected scripts of Industries.

“Greater Portfolio Return with less Risk is always is an attractive combination” for the Investors.

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 REFERENCES
Websites

www.nseindia.com
www.bseindia.com
www.moneycontrol.com
www.indiainfoline.com/Markets/News
www.globalresearch.co.in
www.valueresearchonline.com
www.amfi.com
www.sebi.gov.in
www.reuters.com
en.wikipedia.org/wiki/portfolio management
www.rbi.co
www.businesstimes.com
www.economicstimes.com
www.stocktraderschat.com
www.economictimes.indiatimes.com/definition/portfolio management services
www.rediff.com/business
www.thereformedbroker.com/2012/04/08/10-things-you-need-to-know-about-indias-
stock-market

Magazines, Articles & Journals

Markowitz, Harry M. (1952). "Portfolio Selection". Journal of Finance.

Security Analysis & Portfolio Management – Dhanesh Khatri
Financial Management – Prasanna Chandra
Financial Management, 10th Edition – I M Pandey
Article on “Equity Portfolio Management Mechanics” by Bryn Harman, CFA.
Markowitz, Harry M, “Portfolio Selection: Efficient Diversification of Investment”, New
York: John Wiley & Sons, 1959.

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 ANNEXURE
Annexure 1: The Top Portfolio Managing Companies of the World:

Annexure Table 1: The Top Portfolio Managing Companies of the World

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