PREFACE

Practical knowledge is an important suffix to theoretical knowledge. One cannot merely

depend upon the theoretical knowledge. Classroom lectures make the fundamental concepts

of management clear. They also facilitate the learning of practical things. However to

develop healthy managerial and administrative skills for potential managers, it is necessary

that they combine their classroom learning with real life project research which plays a

significant role in the curriculum of Business Management Courses.

Any science without its practical application or knowledge is considered to be unsystematic.

Since management is a developing science, the students of Management courses are required

to undergo a project in the final year of the course.

Thus for the fulfilment of the above requirement a project was undertaken by me on the topic

“CASH FLOW STATEMENT”. The project was a good experience and helped me in

widening my knowledge and sharpening management skills.

ACKNOWLEDGEMENT

It gives me great pleasure to submit this project to the university of saradar patel at D.N.INSTITUTE OF BUSINESS ADMINISTRATION” as a part of curriculum of my BBA(ITM) course. I take this opportunity with great pleasure to present before you this project on “REPORT ON PORTFOLIO MANAGEMENT SERVICES IN INDIA” which is a result of co-operation, hard work and good wishes of many people. The most pleasant part of any project is to express the gratitude toward all those who have contributed to the success of the project.

I would like to thank MR.RITESH PATEL who has been my mentor for this project. It was only through her excellence assistance and good suggestions that I have been able to complete this project.

Library Staff:

For giving valuable information about the various books related to this project.

With all the heartiest thanks; I hope my final report will be a great success and a good source of learning and information.

TABLE OF CONTENT

CHAPTER INFORMATION PAGE NO.Preface IAcknowledgement IICertificate IIITable of Content IV

1 Introduction and Identification of the problem 1.1 Introduction1.2 Meaning 1.3 Investment of portfolio management and portfolio

theory.1.4 Basic Concept & components for portfolio management1.5 objectives1.6 Types of portfolio management

1.7 Persons involved in portfolio management

2 Literature review

3 Introduction to Organization

3.1 Introduction to Kotak securities Ltd.

4 Research and Methodology

4.1 Methodology

5 Data analysis and interpretation

5.1 Primary survey5.2 Finding

6 Recommendation and Conclusion7 Bibliography

NEED FOR SELECTING THE PROJECT

• To get the overall knowledge of securities and investment.

• To know how the investment made in different

securities minimizes the risk and maximizes the returns.

• To get the knowledge of different factors that affects

the investment decision of investors.

• To know how different companies are managing their

portfolio i.e. when and in which sectors they are

investing.

• To know what is the need of appointing a Portfolio

Manager and how does he meets the needs of the various

investors.

• To get the knowledge about the role (played) and

functions of portfolio manager.

• To get the knowledge of investment decision and asset allocation.

EXECUTIVE SUMMARY

Investing in equities requires time, knowledge and constant

monitoring of the Markel. For those who need an expert

10 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 maxi mum returns at 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 ti me 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 tor

making an investment decision and briefs about the information

related to asset allocation.

CHAPTER: 1

Portfolio management

Chapter 1.1

INTRODUCTION

Stock exchange operations are peculiar in nature and most of the Investors feel insecure in managing their investment on the stock market because It is difficult for an individual to identify companies which have growth prospects for Investment.

Further due to volatile nature of the markets, it requires constant reshuffling of portfolios to capitalize on the growth opportunities. Even after identifying the growth oriented companies and their securities, the trading practices are also complicated, making it a difficult task for investors to trade in all the exchange and follow up on post trading formalities.

Investors' choose to hold groups of securities rather than single

security that offer the greater expected returns. They believe that

a combination of securities held together will give a beneficial

result if they are grouped in a manner to secure higher return

after taking into consideration the risk element. That is why

professional investment advice through portfolio management

service can help the investors to make an intelligent and

informed choice between alternative investments opportunities

without the worry of post trading hassles.

From The Rational Edge: The first in a new series of articles on portfolio

management, this introduction expresses IBM's viewpoint

about the foundations and essentials of portfolio management

and discusses ideas and assets that support and enable effective

portfolio management practices.

A good way to begin understanding what portfolio management

is (and is not) may be to define the term portfolio. In a business

context, we can look to the mutual fund Industry to explain the

term's origins. Morgan Stanley's Dictionary of Financial Terms

offers the following explanation:

If you own more than one security, you have an investment

portfolio. You build the' portfolio by buy long additional stocks,

bonds, mutual funds, or other investments. Your goal is to

increase the portfolio's value by selecting investments that you

believe will go up in price

According to modern portfolio theory, you can reduce your

investment risk by creating a diversified portfolio that includes

enough different types, or classes, of securities so that at least

some of them may produce strong returns in any economic

climate.

Note that this explanation contains a number of important ideas:

• A portfolio contains many investment vehicles.

• Owning a portfolio involves making choices -- that is,

deciding what additional stocks, bonds, or other financial

instruments to buy; when to buy; what and when to sell; and

so forth. Making such decisions is a form of management.

• The management of a portfolio is goal-rive. For an

investment portfolio, the specific goal is to increase the

value.

• Managing a portfolio involves inherent risks.

CHAPTER1.2

MEANING OF PORTFOLIO MANAGEMENT

Portfolio management in common parlance refers to the sel

ection of securities and their continuous shifting in the portfolio

to optimize returns to suit the objectives of an investor. This

however requires financial expertise In selecting the right mix of

securities in changing market conditions to get the best out of

the stock market. In India, as well as in a number of western

countries, portfolio management service has assumed the role

of a specialized service nowadays and a number of

professional merchant bankers compete aggressively to provide

the best to high net worth clients, who have liWe time to

manage their investments. The idea is catching on with the

boom in the capital market and an Increasing number of people

are inclined to make profits out of their hard-earned savings.

Portfolio management service is one of the merchant banking

activities recognized by Securities and Exchange Board of India

(SEBI). The service can be rendered either by merchant bankers

or portfolio managers or discretionary portfolio manager as

define in clause' (e) and (f) of Rule 2 of Securities and

Exchange Board of India(Portfolio Managers)Rules, 1993 and

their functioning are guided by the SEBI.

According to the definitions as contained in the above

clauses, a portfolio manager means any person who is pursuant

to contract or arrangement with a client, advises or directs or

undertakes on behalf of the client (whether as a

discretionary portfolio manager or otherwise the management

or administration of a portfolio of securities or the funds of the

client, as the case may be. A merchant banker acting as a

Portfolio Manager shall also be bound by the rules and

regulations as applicable to the portfolio manager.

Realizing the importance' of portfolio management services,

the SEBI has laid down certain guidelines for the proper and

professional conduct of portfolio management services. As per

guidelines only recognized merchant bankers registered with

SEBI are authorized to offer these services.

Portfolio management or investment helps investors in

effective and efficient management of their investment to

achieve this goal. The rapid growth of capital markets in

India has opened up new investment avenues for investors.

The stock markets have become attractive Investment options

for the common man. But the need Is to be able to effectively

and efficiently manage investments in order to keep maximum

returns with minimum risk.

~ Portfolio is a collection of asset.

~ The asset may be physicalor financial like Shares Bonds, Debentures, and

Preference Shares etc.» The individual investor or a fund manager would not like

to put all his money in the shares of one company, for that

would amount to great risk.» Main objective is to maximize portfolio returns and at the same time

minimizing the portfolio risk by diversification.

~ Portfolio management is the management of various

financial assets, which comprise the portfolio.

~ According to Securities and Exchange Board of India (Portfolio manager)

Rules, 1993;" portfolio" means the total holding of securities belonging to any

person;

,. Designing portfolios to suit investor requirement

often involves making several projections regarding the

future, based on the current information.

~ When the actual situation is at variance from the projections portfolio

composition needs to be changed.» One of the key inputs In portfolio building is the risk

bearing ability of the investor.

Realizing the importance' of portfolio management services,

the SEBI has laid down certain guidelines for the proper and

professional conduct of portfolio management services. As per

guidelines only recognized merchant bankers registered with

SEBI are authorized to offer these services.

Chapter 1.3

INVESTMENT PORTFOLIO MANAGEMENT

AND PORTFOLIO THEORY

Portfolio theory is an Investment approach developed by

University of Chicago economist Harry M. Markowitz (1927 -

), who won a Nobel Prize in economics in 1990. Portfolio theory

allows investors to estimate both the expected risks and

returns, as measured statistically, for their investment portfolios.

Markowitz described how to combine assets into efciently

diversified portfolios. It was his position that a portfolio's risk

could be reduced and the expected rate of return 'could be

improved if investments having dissimilar price movements were

combined. In other words, Markowitz explained how to best

assemble a diversified portfolio and proved that

such a portfolio would Iikely do well.

There are two types of Portfolio

Strategies:

A. Passive PortfolioStrategy

A strategy that involves minimal expectation input, and instead

relies on diversification to match the performance of some

market index.

B.ActivePortfolioStratyegy

A strategy that uses available information and forecasting

techniques to seek a better performance than a portfolio that is

simply diversified broadly

CHAPTER 1.4

BASIC CONCEPTS AND COMPONENTS

FOR PORTFOLIO MANAGEMENT

Now that we understand some of the basic dynamics and

inherent challenges organizations face in executing a business

strategy via supporting initiatives, let's look at some basic

concepts and components of portfolio management practices.

1. The portfolio

First, we can now introduce a definition of portfolio that

relates more directly to the context of our preceding discussion.

In the IBM view, a portfolio is: One of a number of mechanisms,

constructed to actualize significant elements In the Enterprise

Business Strategy.

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

which are alilined with the organizing element of the Portfolio,

and, which contribute to the' achievement of goals or goal

components identified In the Enterprise Business Strategy. The

basis tor constructing a portfolio should reflect the enterprise's

particular needs. For example, you might choose to build a

portfolio around initiatives for a specific product, business s

segment, or separate business unit within a multi national

organization.

2. The portfolio structure

As we noted earlier, a portfolio structure identifies and contains

a humber of portfolios. This structure, like the portfolios within

i~ should align with significant planning and results

boundaries, and with business components. If you have a

product-oriented portfolio structure, for example, then you would

have a separate portfolio for each major product or product

group. Each portfolio would contain all the initiatives that help

that particular product or product group contribute to the success

of the enterprise business

3. The Portfolio Manager

This is a new role for organizations that embrace a portfolio

management approach. A portfolio manager is res possible for

continuing oversight of the contents within a portfolio. If you

have several portfolios within your portfolio structure, then you

will likely. need a portfolio manager for each one. The exact

range' of responsibilities (and authority) will vary from one

organization to another, but the basics are as follows:

• One portfolio manager oversees one portfolio.

• The portfolio manager provides day-to-day oversight.

• The portfolio manager periodically reviews the performance

of, and conformance to expectations for, initiatives within

the portfolio.

• The portfolio manager ensures that data is collected and analyzed about each of

the initiatives in the portfolio.

• The portfolio manager enables periodic decision

making about the future direction of Individual initiatives.

4. Portfolio Reviews and Decision Making

As initiatives are executed, the organization should 'conduct

periodic reviews of actual (versus planned) performance and

conformance to original expectations. Typically, organization

managers specify the frequency and contents for these periodic

reviews, and individual portfolio managers over see their

planning and execution. The reviews should be multi-

dimensional, including both tactical elements (e.q., adherence

to plan, budget, and resource allocation) and strategic elements

(e.q., support for business strategy goals and delivery of

expected organizational benefits).

A significant aspect of oversight is setting multiple decision

points for each initiative, so that managers can periodically

evaluate data and decide whether to continue the work.

These "continue(change/discontinue" decisions should be'

driven by an understanding (developed via the periodic reviews)

of a given initiative's continuing value, expected benefits, and

strategic contribution, Making these decisions at multiple

points in the initiative's lifecycle helps to ensure that managers

will continually examine and assess changing internal and

external circumstances, needs, and performance.

5.Goverance

Implementing portfolio management practices in an

organization is a transformation effort that typically Involves

developing new capabilities to address new work efforts,

defining (and filling) new roles to identify portfolios (collections

of work to be' done), and delineating boundaries among work

efforts and collections. Implementing portfolio management

also requires creating a structure to provide planning, continuing

direction, and oversight and control for all portfolios and the

initiatives they encompass. That is where the notion of

governance cernes into play. The IBM view of governance is:

An abstract, collective term that defines and contains a

framework for organization, exercise of control and oversight,

and decision-making authority, and within which actions and

activities are legitimately and properly executed; together with

the definition

of the functions, the roles, and the responsibilities of those who exercise this oversight

and decision-making.

Portfolio management governance involves multiple dimensions, including:

• Defining and maintaining an enterprise business strategy.

• Defining and maintaining a portfolio structure containing

all of the organization's initiatives (programs, projects, etc.).

• Reviewing and approving business cases that propose

the creation of review initiatives.

• Providing oversight, control, and decision-making for all ongoing initiatives.

• Ownership of portfolios and their contents.Each of these dimensions requires an owner -- either an

individual or a collective -- to develop and approve plans,

continuously adjust direction. and exercise control through

periodic assessment and review of conformance to expectations.

A good governance structure decomposes both the types of

work and the authority to plan and oversee work. It defines

individual and collective roles. and links them to an authority

scheme. Policies that are collectively developed and agreed

upon provide a framework for the exereiase of governance. The

complexities of gevernance structures extend well beyond the

scope of this article. Many organizations turn to experts for help

in this area because it Is so critical to the success of any business

transformation effort that encompasses portfolio management.

For now. suffice it to say that it Is worth investing time and

effort to create a sound and flexible governance structure before

you attempt to implement portfolio management practices.

6. Portfolio management essentia.ls

Every practical discipline is based on a collection of

fundamental concepts that people have identified and proven

(and sometimes refined or discarded) through continuous

application. These concepts are useful until they become

obsolete, supplanted by newer and more effective ideas.

For example, in Roman times, engineers discovered that if the

upstream supports of a bridge were shaped to offer little

resistance to the current of a stream or river. they would last

longer. They applied this principle all across the Roman Empire.

Then, in the middle Ages, engineers discovered that such

supports would last even longer if their downstream side was

also shaped to offer little resistance to the current. So that

became the new standard for bridge construction.

Portfolio management. like bridge-building. is a disciplirie, and

a number of authors and practitioners have documented

fundamental ideas about its exercise. Recently, based on our

experiences with clients who have implemented portfolio

management practices and on our research into the discipline,

we have started to shape an IBM view of fundamental ideas

around portfolio management. We are beginning to express this

view.

as a collection of "essentials" that are; in turn. grouped

around a small collection of portfolio management themes.

Chapter 1.5

OBJECTIVES OF PORTFOLIO MANAGEMENT

The basic objective of Portfolio Management is to maximize

yield and minimize risk. The other objectives are as follows:

a) Stability of Income: An investor considers stability

of income from his investment. He also considers the

stability of purchasing power of income.

b) Capital Growth: Capital appreciation has become an

Important investment principle. Investors seek growth

stocks which provide a very large capital appreciation by

way of rights. bonus and appreciation in the market price

of a share.

c) Liquidity: An investment is a liquid asset. It can be

converted into cash with the help of a stock exchange.

Investment should be liquid as well as marketable.

The portfolio should contain a planned proportion of

high-grade and readily stable investment.

d) Safety: safety means protection for investment

against loss under reasonably variations. In order to

provide safety, a careful review of economic and industry

trends Is necessary. In other words. errors in

portfolio are unavoidable and it requires extensive

diversification.

c) Tax Incentives: Investors try to minimize their tax

Iabilities from the investments. The portfolio manager has

to keep a list of such investment avenues along with the

return risk, profile, tax implications, yields and other returns

There are three goals of portfolio management:

1. Maximize the value of the portfolio

2. Seek balance in the portfolio

3. Keep portfolio projects strategically aligned

It provides a set of portfolio management tools to help achieve

these goals. With rnultiple business units, product lines or types of

development, we recommend a strategic allocation process

based on the business plan. The Master Project Schedule

provides a summary of all-active as well as proposed projects

and classifies them by status (active, proposed, on-hold)

and by business unit/product line to align projects with the

strategic allocation. The Master Project Schedule also provides

additional portfolio information to prioritize projects using either

a scorecard method or the development productivity index

(DPI 0). In addition to this prioritization, PD-Trek provides a

Risk-Reward Bubble Chart and a Project Type Pie Chart to

assure balance. A Product or Technology Roadmap.

template is provided to help visualize platform and technology

relationships to assure critical project relationships are not

overlooked with this prioritization. This will allow management

to develop a balanced approach to selecting and continuing

with the appropriate mix of projects to satisfy the three goals.

FUNCTIONS OF PORTFOLIO MANAGEMENT

The basic purpose of portfolio management is to maximize

yield and minimize risk. Every investor is risk averse. In

order to diversify the risk by investing into various securities

following functions are required to be performed.

The functions undertaken by the portfolio management are as follows:

1. To frame the investment strategy and select an

investment mix to achieve the desired investment

objective;

2. To provide a balanced portfolio which not only can hedge

against the inflation but can also optimize returns with the

associated degree of risk;

3. To make timely buying and selling of securities;

4. To maxmize the after-tax return by investing in various

taxes saving investment instruments.

ELEMENTS OF PORTFOLIO MANAGEMENT:

Portfolio management is on-going process involving the

following basic tasks:

)- Identification of the investor's objectives, constraints and preferences.

)-

)- Strategies are to be developed and implemented in

tune with investment policy formulated.

)- Review and monitoring of the performance of the portfolio.

)- Finally the evaluation of the portfolio.

PROSPECTS OF POTFOLIO MANAGEMENT

=> At present, there are a very few agencies which render this

type of services in an organized and professional way.

=> However, their share in the total volume is very small.

=> There is no constraint on the demand for this type of

financial service as every entity would be saving and

Investing and Interested In optimizing the rate of

return.

=> The size of capital market is increasing.

=> There is an increase in the number of stock exchanges.

=> New instruments are being introduced in the capital market.

=> The equity cult is spreading in the interiors and rural areas.

=> The percentage of investment of the household savings is bound to go up.

=> It is conservatively estimated that during the eighth plan

resources to the tune of over RS.50000crore will be

mobilized through the stock market.

=> India today has 20 million Investors, as compared to 2 million In 1980.

STEPS IN PORTFOLIO MANAGEMENT

• These objectives may be tangible such as buying a car, house etc. and intangible objectives such as social status, security etc.

• Similarly, these objectives may be classified as financial or personal objectives.

Financial objectives are safety, profitability and liquidity.• Personal or individual objectives may be related to

personal characteristics of individuals such as family commitments, status, depends, educational requirements, income, consumption and provision for retirement etc.

2) FORMULATION OF PORTFOLIO STRATEGY• The aspect of Portfolio Management is the most

important element of proper portfolio investment and speculation.

• While planning, a careful review should be conducted about the financial situation and current capital market conditions.

This will suggest a set of investment and

speculation policies to be followed.

The statement of Investment policies includes the portfolio objectives,

strategies and constraints.• Portfolio strategy means plan or policy to be

followed while investing in different types of assets.• There are different investment strategies.• They require changes as time passes, investor's wealth

changes, security price change, investor's knowledge expands.

• Therefore, the optional strategic asset allocation also changes.

The strategic asset allocation policy would call for broad diversificationthrough an indexed holding of virtually all securities in the asset class.

3) SELECTION OF ASSET MIX

• The most important decision in portfolio management is selection of asset mix.

! It means spreading out portfolio investment into

different asset classes like bonds, stocks, mutual funds

etc.

! In other words selection of asset mix means iiwesting in different kinds of

assets and reduces risk and volatility and maximizes

returns in investment portfolio.

! Selection of asset mix refers to the percentage to the invested in various

security classes.

The security classes are simply the type of securities as

under:

» money market instrument

» fixed income security

» equity shares

» real estate investment

» international securities

• Once the objective of the portfolio Is determined the securities to be

Included in the portfolio must be selected.

Normally the portfolio is selected from a list of high-

quality bonds that the portfolio manager has at hand.

• The portfolio manager has to decide' the goals before selecting the'

common stock.

• The goal may be to achieve pure growth, growth

with some income or income only.

4) PORTFOLIO EXECUTION:

The process of portfolio management involves a logical set of steps

common to any decision, plan, implementation and monitor.

• Applying this process to actual portfol io can be complex .

Therefore, in the execution stage, three decisions need

to be made, if the percentage holdings of various asset

classes are currently different from desired holdings.

The portfolio than, should be rebalanced. If the

statement of investment policy requires pure investment

strategy, this is only thing, which is done in

the execution stage.

~ However, many portfolio managers engage in the

speculative transactions in the belief that such

transactions will generate excess risk-adjusted

returns.• Such speculative transactions are usually classified as

timing or selection decisions.

Timing decisions over or under weight various asset

classes, industries or economic sectors from the strategic

asset allocation.

Such timing decisions are known as tactical asset

allocation and selection decision deals with securities

within a given asset class. industry group or economic

sector.

The investor has to begin with periodically adjusting

the ass et mix to the desired mix, which is known as

strategic asset allocation.

Then the investor or portfolio manager can make any tactical assetallocation or security

selection decision.

5). PORTFOLIO REVISION

• Portfolio management would be an incomplete exercise without periodic review.

• The portfolio, which is once selected, has to be continuously reviewed over a period of time and if necessary revised depending on the objectives of

investor.

• Thus, portfolio revision means changing the asset allocation of a

portfolio.

Investment portfolio management involves maintaining proper

combination of securities, which comprise the -investor's

portfolio in a manner that they give maxi mum return with

minimum risk.

For this purpose, Investor should have continuous review and

scrutiny of his investment portfolio.

• Whenever adverse conditions develop, he can dispose of the securities,

which are not worth.

• However, the frequency of review depends upon the size of the portfolio, the sum involved, the kind of securities held and the time available to the investor.

• The review should include a careful examination of investment objectives, targets for portfolio performance, actual results obtained and analysis of reason for variations.

• The review should be followed by suitable and timely action.

There are techniques of portfolio revision.

• Investors buy stock according to their objectives and return-risk

framework.

These fluctuations may be related to economic activity or due to other

factors.

• Ideally investors should buy when prices are low and sell when

prices rise to level s higher than their normal fluctuations.• The investor should decide how often the portfolio should be revised.

If revision occurs to often, transaction and analysis costs may be high.

6).PORTFOLIO PERFORMANCE

EVALUATION

~ Portfolio management involves maintaining a

proper combination of securities, which comprise the

investor's portfolio in a manner that they give maximum

returns with minimum risk.

The investor should have continues review and

scrutiny of his investment portfolio.

These rates of returns should be based on the market

value of the assets of the fund.

Complete evaluation of the portfolio performance must include examining ameasure of the degree of risk taken by the fund.

• A portfolio manager, by evaluating his own performance can identify

sources of strength or weakness.

II can be viewed as a feedback and control rnechanism

that can make the' investment management process more'

effective.

Good performance in the past might have resulted from good luck, in which

case such performance may not be expected to continue in the future.

• On the other hand, poor performance in the past might have been result of bad luck.

Therefore, the first task in performance evaluation is to

determine whether past performance was good or poor.

Then the second task is to determine· whether such performance was due

to ski II or luck.Good performance in the past may have resulted from the actions of a highly skilled portfolio manager.

• The performance of portfolio should be measured periodically, preferably

once' in a month or a quarter.• The performance of an individual stock should be

compared with the overall performance of the market.

CHAPTER-1.6

TYPE OF PORTFOLIO MANAGEMENT:

The two types of portfolio management services are available 0 the investors:

The Discretionary portfolio management services (DPMSI:

» In this type of services, the client parts with his money

In favour of manager, who In return, handles all the paper

work, makes all the decisions and gives a

good returns on the investment and for this he charges a certain fees.

» In this discretionary PMS, to maximize the yield,

almost all portfolio managers parks the funds in the

money market securities such as overnight

market, 182 days treasury bills and 90 days commercial bills.

» Normally, return on such investment varies from

14 to 18 per cent, depending on the call money rates

prevailing at the time of investment.

2. The Non-discretionary portfolio management services:

» The manager function as a counsellor, but the investor

is free to accept or reject the manager's advice; the

manager for a services charge al so

undertakes the paper work.

The manager concentrates on stock market instruments

with a portfolio tailor made to the risk taking ability of the

investor.

EQUITY PORTFOLIO MANAGEMENT

.,. It Is logical that the expected return of a portfolio

should depend on the expected return of the securi ty

contained in it.

.,. There are two approaches to the selection of equity portfolio .

.,. One is technical analysis and the other is fundamental analysis .

.,. Technical analysis assumes that the price of a stock

depends on supply and demand lnthe stock market.

.,. All fnand al and market information of given security is

already reflected in the market price.

Charts are drawn to identify price movements of a given

security over a period of time.

These charts enable the Investors to predict the future

movement of the price of security .

.,. Equity portfolio is a risky portfolio, but at the same

time the return is also higher .

.,. Equity portfolio provides highest returns..

.,. An efficient portfolio manager can obviously give

more weight age to fundamental analysis than the

technical analysis .

.,. The fundamental analysis includes the study of ratio

analysis, past and present track record of the company,

quality of management, government policies etc .

.,. There may be several combinations of investment portfolio.

BONDS PORTFOLIO MANAGEMENT

.,. The individual investors' can invest In bond portfolio.

The portfolio can be spared over variety of securities.

Investment in bond is less risky and safe as compared to

equity investment. However. the return on bond is very

low.

There are no much fluctuations in bond prices .

.,. Therefore, there is no capital appreciation in this case .

.,. Some bonds are tax saving which help the investor to reduce his tax liability .

.,. There is no much liquidity in bonds, investment in bond

portfolio is less risky and safe but, returns is reasonable,

low liquidity and tax saving are some of the

more important features of bond portfol io investment.

However, It is suitable for normal investors for getting

average returns over their investment.

.,. Bond portfolio Incl udes different types of bond, tax

free bonds and taxable bonds .

.,. Tax free bonds are is sued by public sector undertaking

or Goverhment on which interest s compounded half

yearly and payable accordingly.

They have a maturity of 7 to 10 years with the facility for

buyback. The tax free bonds means the interest income on these

bonds is not Therefore, the interest rates on these bonds are very

low.

ADVANTAGE OF PORTFOLIO MANAGEMENT

lndividual will benefits immensely by taking portfolio

management services for the following reason: -

a) Whatever may be the status of the capital market; over

the long period capital markets have given an excellent

return when compared to other forms of investment

The return from bank deposits, units etc., is

much less than from stock market.

b) The Indian stock markets are very complicated. Though

..

there are thousands of companies that are listed only a few

hundred, which have the necessary liquidity. It is Impossible

for any individual whishing to invest and sit down and

analyses all these intricacies of the market unless he does

nothing else.

c) Even if an investor is able to visualize the market, it is

difficult to investor to trade in all the major exchanges of

India, look later his deliveries and payments. This is further

complicated by the volatile nature of our markets,

which demands constant reshuffling of port.

IMPORTANCE OF PORTFOLIO

MANAGEMENT

.. In the past one-decade, significant changes have taken place in the

investment climate in India .

Portfolio management is becoming a rapidly growing area serving a

broad array of investors- both individual and institutional-with

investment portfolios ranging in

asset size from thousands to crores of rupees.

.. It is becoming important because of:

i. Emergence of institutional investing on behalf of individuals.

A number of financial institutions, mutual funds, and other

agencies are undertaking the task of investing money of small

investors, on their behalf.

ii. Growth in the number and the size of invisible funds-aIarge part of

household savings is being directed towards financial assets.

iii. Increased market volatility- risk and returns parameters of

financial assets are continuously changing because of frequent

economic uncertainty and instability.

iv. Greater use of computers for processing mass of data.

v. Professionalization of the field and increase use of analytical methods

(e.q, quantitative techniques) in the investment decision-making, and

vi. Larger direct and indirect costs of errors or shortfalls in

meeting portfolio objectives- increased competition and

greater scrutiny by investors.

CHAPTER 1.7

PORSON INVOLVED IN PORTFOLIO MANAGEMENT

1).INVESTER:

Are the people who are Interested In investing their funds?

PORTFOLIO MANAGER:

Is a person who is in the wake of a contract agreement with a

client, advices or directs or undertakes on behalf of the clients,

the management or distribution or management of the funds of

the client the case may be.

DISCRETIONARY PORTFOLIO MANGER:

Means a manager who exercise under a contract relating

to a portfolio management exercise any degree of

discretion as to the investment or management of portfolio

or securities or funds of clients as the case may be. The

relationship between an investor and portfolio manager is of a

highly interactive nature.

The portfolio manager carries out all the transactions

pertaining to the investor under the power of attorney during the

last two decades, and increasing complexity was witnessed in

the capital market and its trading procedures in this context a

key (uninformed) investor formed) investor found himself in

a tricky situation, to keep track of market movement ,update

his knowledge, yet

stay in the capital market and make money, therefore in

looked forward to resuming help from portfolio manager to

do the job for him . The portfolio management seeks to strike

a balance between risk's and return.

The generally rule in that greater risk more of the profits

but S.E.B.I. in its guidelines prohibits portfolio managers to

promise any return to investor.

Portfolio management is not a substitute to the inherent risks

associated with equity investment.

QUALITIES OF PORTFOLIO MANAGER.

1. Sound general knowledge:

l> Portfolio management is an existing and challenging job.

l> He has to work in an extremely uncertain and conflicting environment.

l> In the stock market every new piece of information

affects the value of the securities of different industries in

a different way.

l> He must be able to ju.dge and predict the effects of the

information he gets.

l> He must have sharp memory, alertness, fast

intuition and self- confidence to arrive at quick

decisions.

2. Analytical Ability:

l> He must have his own theory to arrive at the value of the security.

» An analysis of the security's values, company, etc. is

continues job of the portfolio manager.

» A good analyst makes a good financial consultant.

» The analyst can know the strengths. weakness.

opportunities of the economy, industry and the company.

3. Marketing skills:

l> He must be good salesman.

l> He has to convince the clients about the particular security.

l> He has to compete with the Stock brokers in the stock market.

l> In this Marketing skills help him a lot.

4. Experience'

l> In the cyclical behavior of the stock market history is

often repeated, therefore the experience of the different

phases helps to make rational decisions.

l> The experience of different types of securities, clients,

markets trends etc. makes a perfect professional manager.

FACTOR AFFECTING THE INVESTER

There may be many reasons why the portfolio of an investor

may have to be changed. The portfolio manager always

remains alert and sensitive to the changes in the

requirements of the investor. The following are the some factors

affecting the investor, which make it necessary to change the

portfolio composition.

1) Chanae in Wealth

» According to the utility theory. the risk taking ability of

the investor Increases with increase in wealth.

~ It says that people can afford to take' more ris k as they

grow rich and benefit from its reward.

» But, in practice, while they can afford, they may not be willing.

,. As people get rich, they become more concerned about

losing the newly got riches than getting richer.

,. So they may become conservative and vary risk- averse.

» The fund manager should observe the changes in the

attitude of the Investor towards risk and try to understand

them In proper perspective.

~ If the investor turns to be conservative after making huge

gains, the portfolio manager should modify the portfolio

accordingly.

2) Chanae in the Time Horizon

» As time passes, some events take place that may have an

impact on the time horizon of the investor.

,. Births, deaths, marriages, and divorces - all have their

own impact on the investment horizon.

» There are, of course, many other Important events in

the person"s life that may force a change in the investment

horizon.

» The happening or the non-happening of the events

will naturally have its effect.

» For example, a person may have planned for an early

retirement, oonsidering hi s del icate health.

,. But, after turning 55 years of age, if his health

improves, he may not take retirement.

3) Cbange in Liquidity Needs

» Investors very often ask the portfolio manager to keep

enough scope in the portfolio to get some cash as and

they want.

~ This forces portfolio manager to increase the' weight of

liquid investments in the asset mix.

» Due to this, the amounts available for investment in the fixed income or growth securities that actually help

in achieving the goal of the investor get reduced.~ That is, the money taken out today from the portfolio

means that the amount and the return that would have

been earned on it are no longer available for

achievement of the investor's goals.

4) Changes in Taxes

~ It is said thatthere are only two things certain in this world- death and taxes.

» The only uncertainties regarding them relate to the

date, time, place and mode.

» Portfolio manager have to constantly look out for changes

in the tax structure and make suitable' changes in the

portfol io composition.

» The rate of tax under long- term capital gains is usually

lower than the rate appli cable for income. If there is a

change in the minimum hoi ding period for

long-term 'capital gains, it may lead to revision. The

specifics of the planning depend on the nature of the

investments

5) Others

» There can be many of other reasons for which clients may

ask for a change In the asset mix in the portfolio.

» For example, there may be change in the returns available

on the investments that have to be compulsorily made

with the' governmenl say, in the form of

provident fund.

» This may call for a change in the return required from the other inves tments.

Chapter 2Literature review.

The extensive literature review was performed upon our literature search inthe field of project management, project portfolio management, andparticularly project portfolio selection. The search engine of Google Scholar(http://scholar.google.com/) and the database search facilities were used tofind relevant books, theses, dissertations periodicals, scholarly and peerreviewedpapers such as Academy of Management Journal; Journal ofManagement Decision; Harvard Business Review; MIT Sloan ManagementReview; Academy of Management Review, International Journal ProjectManagement; etc., in the database of universities, academic publishers,professional societies, EBSCO, Emerald, Blackwell Synergy, JSTOR, andScience Direct. Besides, the handouts and teaching notes provided byprofessors during the whole MSPME course (Master of Science in StrategicProject Management - European) have also been referenced.

The extensive review of literature is aimed at improving our understanding oftheoretical and practical concepts underpinning the process of projectportfolio selection. During the literature review, eight main academic andpractical areas pertinent to our research question have been identified,examined, and presented in the next sections:a. Relevant definitionsb. Strategies for project portfolio selectionc. Decision making process supporting project portfolio selectiond. Constrained Resources / Theory of Constraints (TOC) and projectselectione. Project categorization facilitating project portfolio selectionf. Project portfolio selection models or methodsg. Project portfolio selection process or frameworkh. Challenges in project portfolio selection2.1. Relevant Definitions

2.1.1. Corporate Strategy

There are a number of various defitions of strategy in the literature; and inpracice, strategy exits in every organziation (Yelin, 2005). However, thefollowing defitions found are relevant to the discussion context in thisdissertation:9Minztberg et al. (1998, pp. 10-15) provided interesting discussions on strategyunderstanding which is known as:o Plan: some sort of consciously intended course of action, a guideline(or a set of guidelines) to deal with a situation; intended strategy,o Pattern: consistency in behavior, whether or not intended; realizedstrategy (Combination of the plan and pattern concepts explainsdeliberate strategy (intentions that existed previously were realized)and emergent strategy (patterns developed in the absence of intentions

or despite them which went unrealized),

o Position: a means of locating an organization in external environment,

o Perspective: seeking to look inside the organization, indeed inside theheads of the collective strategist, and

o Ploy: a specific ‘maneuver’ intended to outwit an opponent orcompetitor.Similarly relevant to the context of this dissertation, Johnson et al. (2006, p.9) defined strategy as the direction and scope of an organization over the longterm, which achieves advantages in a changing environment through itsconfiguration of resources with the aim of fulfilling stakeholder expectations;adding that strategic management includes understanding strategic position ofan organization, strategic choice for the future and turning strategy into

action.

Chapter 3 Introduction to orgChapter 3.1

INTRODUCTON TO KOTAK SECURITIES LTD.

The Kotak Mahindra Group was born in 1985 as Kotak Capital Management Finance Limited. Uday Kotak, Sidney A. A. Pinto and Kotak & Company promoted

this company. Industrialists Harish Mahindra and Mahindra took a stake in 1986, and that's when the

company changed its name to KotakMahindra Finance Limited. Since then it's been a steady and confident journey to growth and success.

Kotak Securities Ltd. is one of India's largest brokerage and securitiesdistribution house in India. Over the years Kotak Securities has been one of the leading investment broking houses catering to the needs of both institutional and non-institutional investor categories with presence all over the country through franchisees and co-ordinates. Kotak Securities Ltd. offers online and offline services based on well-researched expertise and financial products tothe non-instiutional investors.

Kotak Securities Limited is the world of Capital Markets where everything newsworthy exists only in the present moment and where knowing the importance of timing, sentiments and strategic forecasting makes the difference between profit and loss.

Kotak Securities Limited, a strategic joint venture between Kotak Mahindra Bank and Goldman Sachs (holding 25% one of the world's leading investment banks and brokerage firms) is India's leading stock broking house with a market share of 7·8 %.

Kotak Securities Limited is one of the larger players in distribution of IPOs - it was ranked number One in 2003-04 as Book· Running Lead Manager in public equity offerings by PRIME Database. It has also won the "Best Equity House" Award from Finance Asia -April 2004.

The Company has a full-fledged Research division

involved in macroeconomic studies, Sectoral research and Company specific equity research combined with a strong and well networked sales force which helps deliver current and up-to- date market information and news.Kotak Securities Limited is also a depository participant with National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) providing dual benefit services wherein the investors can use the brokerage services of the Company for executing the transactions and the depository services for settling them.

Kotak Securities has 122 branches servicing more than 1,70,000 customer and Coverage of 18 cities. Kotaksecurities.com, the online division of Kotak Securities Limited offers Internet Broking services and also online IPO and Mutual Fund Investments. Kotak Securities Limited manages assets over 2500 cores of Assets under Management (AUM).

Kotak securities provide portfolio Management Services, catering to the high end of the market. Portfolio Management from Kotak Securities comes as an answer to those who would like to grow exponentially on the crest of the stock market, with the backing of an expert.

Kotak Securities Limited manages assets over Rs. 1700crores through its Portfolio Management Services (PMS) servicing high net worth clients with a large investi.ble surplus through its preferred client services in the mass affluent and wealth management segments.

The company has a full-fledged research division involved in Macro Economic studies, Sectoral research and Company Specific Equity Research combined with a strong and well networked sales force which helps deliver current and up to date

market information and news.Kotak Securities Limited is also a depository participant with National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) providing dual benefit services wherein the investors can use the brokerage services of the Company for executing the transactions and the depository services for settling them.

Kotak Securities has 122 branches servicing more than 1,70,000 customer and Coverage of 18 cities. Kotaksecurities.com, the online division of Kotak Securities Limited offers Internet Broking services and also online IPO and Mutual Fund Investments. Kotak Securities Limited manages assets over 2500 cores of Assets under Management (AUM).

Kotak securities provide portfolio Management Services, catering to the high end of the market. Portfolio Management from Kotak Securities comes as an answer to those who would like to grow exponentially on the crest of the stock market, with the backing of an expert.

Kotak Securities Limited manages assets over Rs. 1700crores through its Portfolio Management Services (PMS) servicing high net worth clients with a large investi.ble surplus through its preferred client services in the mass affluent and wealth management segments.

The company has a full-fledged research division involved in Macro Economic studies, Sectoral research and Company Specific Equity Research combined with a strong and well networked sales force which helps deliver current and up to date market information and news.

KOTAK SECURITIES RESEARCH CENTER

Kotak Securities Research Center is a special research cell where some of India's finest financial analysts bring you intensive research reports on how the stock market is faring, when is the right time to invest, when to execute your order and more. KSL provides both type of research reports .

./ Fundamental Research

reports

a. Intraday calls

b. Special Reports

c.Market Mornings

d.DailyMarketBrief

e. Sectoral Report

f. Stock Ideas

g.Deriva!ivesReport

h. Portfolio Advices

./ Technical Research

reports

a. Weekly Technical

Analysis

Depending on what kind of investor you are, Kotak Securities LId. (KSL) brings customers from fundamental or basic research and technical research. As an investor with Kotak Securiti.es, Customers get access to these research reports exclusively. Customers get access to the following reports. Research process is given below.

PRODUCTS OFFERED BY KOTAK SECURITIES LIMITED

J. Portfolio Management Services [PMS]: KOTAK Securities is among the Largest private" client asset managers in the Couniry today with an equity asset base of around 1700crores (US$ 400 million). Kotak clients include some of the most affluent families and high net worth individuals in the Country and customer assets under management rival some of the larger mutual funds in India.

2) Margin Trading Facility

3) Demat Account Facility

4) IPOs

5) Mutual Funds

AWARDS GRAB BY KOTAK SECURITIES LTD .

•:. Prime Ranking Award (2003-04) - Largest Distributor of IPOs

.;. Finance Asia Award (2004)- India's best Equity House

.:. Finance Asia Award (2005)-Best Broker in India

.;. Euromoney Award (2005)-Best Equities House in India

.:. Finance Asia Award (2006) - Best Broker in India

.;. Euromoney Award (2006) - Best Provider of Portfolio Management in Equities

Indian Bank enters into a Strategic Alliance with PNB

Principal

Chennai, January 25, 2006: Indian Bank is enlarging its activities to deliver value- added services to Its customers. The Bank is presently selling the Insurance products, both Life and Non-life as a Corporate Agent. The Bank is concentrating on optimizing the 3 Ps, People, Process and Products to give maximum advantage to its customers and to face the market competition by exploiting the emerging opportunities.

Indian Bank today announced a strategic alliance with Pnb Principal Insurance Advisory Co., Pvt. Ltd. in the insurance advisory business and Pnb Principal Financial Planners Pvt. Ltd. in the financial planning business. As the' alliance will enable access to the' financial products of 30 Insurance companies both life and non-life and an equal number of Investment solutions to the Bank's Customers under one roof, the Bank's emphasis wo.uld be to serve as an "agent to its customers".

As per the scope of the alliance with Pnb Principal Insurance Advisory Co., Pvt. Ltd., Indian Bank has taken an equity stake in the Company. This partnership will also deliver risk management solutions to Indian Bank customers through the Insurance advisory route. The solutions offered will include risk assessment, insurance portfolio analysis & placement, Insurance portfolio administration, and claims management.

As per Indian Bank's strategic alliance with Pnb Principal Financial Planners Pvt. Ltd., the Bank will distribute the

investment solutions offered by Pnb Principal Financial Planners through its extensive branch network. Pnb Principal Financial Planners will provide support in the area of financial planning, investment advisory, research, systems and business development to Indian Bank. The· strategic alliance will enablecustomers of Indian Bank to access a wide range of superior Investment solutions.

Announcing the partnership with Indian Bank, Sanjay Sachdev, Country Manager-India, and Principal International said, "Banks have currently emerged as the largest distribution

channel for financial Investment options. We are pleased to associate ourselves with Indian Bank. This partnership with Indian Bank will make a range of investment solutions more accessible to retail investors of Indian Bank." .

Dr. K.C. Chakrabarty, Chairman and Managing Director, Indian Bank said," The alliance with Pnb Principal in the areas of Risk Management, Insurance and Investment will help in providing a One-stop solution to the 15 million strong customers of Indian Bank.

throughout the country. The Tie-up will help realize our cherished goal of makihg ourBank, 'the best people to bank with".

Chapter 4

Methodology

Chapter 4.1

METHODOLOGY

Portfolio Management is used to select a portfolio of new

product development projects to achieve the following goals:

• Maximize the profitability or value of the portfolio

• Provide balance

• Support the strategy of the enterprise

Portfolio Management is the responsibility of the senior

management team of an organization or business unit.

This team, which might be called the Product Committee, meets

regularly to manage the product pipeline and make decisions

about the product portfolio. Often, this is the same group that

'conducts the stage-gate reviews in the organization.

A logical starting point is to create a product strategy - markets,

customers, products, strategy approach, competitive emphasis,

etc. The' second step is to understand the budget or resources

available to balance the portfolio against Third, each project

must be assessed for profitability (rewards), investment

requirements (resources), risks. and other appropriate factors.

The weighting of the goals in making decisions about products

varies from company. But organizations must balance these goals:

risk vs. profitability, new products vs. improvements, strategy fi t

vs. reward, market vs. product line, long-term vs. short-term.

Several types of techniques have been used to support the portfolio management process:

• Heuristic models

• Scoring techniques

• Visual or mapping techniques

The earliest Portfolio Management techniques optimized

projects' profitability or financial returns using heuristic or

mathematical models. However, this approach paid .We

attention to balance or aligning the portfolio to the

organization's strategy. Scoring techniques weight and score

criteria to take into account investment requirements,

profitability, risk and strategic alignment. The shortcoming with

this approach can be an

over emphasis Is on financial measures and an Inability to

optimize the mix of projects. Mapping techniques use graphical

presentation to visualize a portfolio's balance. These are typically

presented in the form of a two-dimensional graph that shows the

trade-off it's or balance between two factors such as risks vs.

profitability, marketplace fit vs. product line coverage, financial

return vs. probability of success, etc

The recommended approach is to start with the overall business

plan that should define the planned level of R&D investment,

resources (e.g., headcount, etc.), and related sales expected

from new products. With multiple business units, product lines

or types of development, we recommend a strategic allocation

process based on the business plan. This strategic allocation

should apportion the planned R&D investment into business

units, product lines, markets, geographic areas, etc. It may

also breakdown the R&D investment into types of development,

e.g., technology development, platform development, new

products, and upgrades/enhancements/line extensions, etc.

Once this is done, then a portfolio listing can be developed including the relevant portfolio data. We favor use of the development productivity index (DPI) or scores from the' scoring method. The development productivity index is calculated as follows: (Net Present Value x Probability of Success) / Development Cost Remaining. It factors the NPV by the probability of both technical and ccrnrnerclal success. By dividing this result by the development cost remaining, it places more weight on projects nearer completion and with lower uncommitted costs. The scoring method uses a set of criteria (potentially different for each stage of the project) as a basis for scoring or evaluating each project.An example of this scoring method is shown with the'

worksheet below. Weighting factors can be set for each

criterion. The evaluators on a Product Committee score

projects (1 to 10, where 10 are best). The worksheet computes

the average scores and applies the weighting factors to

compute the overall score. The maximum weighted score for

1Cc.1TM.

a project is 100.This portfolio list can then be ranked by

either the development priority index or the score. An example

of the portfolio list is shown below.

Once the organization has Its prioritized list of projects, It

then needs to determine where the cut off Is based on the

business plan and the planned level of investment of the

resources available. This subset of the high priority projects then

needs to be further analyzed and checked. The first step is to

check that the prioritized list reflects the planned breakdown of

projects based on the strategic allocation of the business plan.

Pie charts such as the one below can be used for this purpose .

Other factors can also be checked using bubble .charts. For

example, the risk-reward balance is commonly checked using

the bubble chart shown earlier. A final check is to analyze

product and technology roadmaps for project relationships. For

example. if a lower priority platform project was omitted from

the portfolio priority list. the subsequent higher priority projects

that depend on that platform or platform technology would be'

impossible to execute unless that platform project were included

in the portfolio priority

list.

Finally. !hi s balanced portfolio that has been developed is

checked against the business plan as shown below to see if the

plan goals have been achieved - projects within !he planned

R&D investment and resource levels and sales that have met the

goals.

With the significant investments required to develop new

products and the risks involved. Portfolio Management is

becoming an increasingly important tool to make strategic

decisions about product development and the

investment of company resources. In many companies, current

year revenues are increasingly based on new products developed

in the last one to three years.

CHAPTER 5 Data analysis and interpritation

Chapter 5.1

PRIMARY SURVEY

Purpose of the study:

<r To ascertain investor awareness about services

provided by portfolio management institutions and

the Interest shown by investor to invest in portfolio

management services.

<r To know whether they are interested to hire such

services in future and Ifnot, why?

CHAPTER 5.2

FINDINGSThis case study has been conducted on various age groups of individual investors on portfolio

management. These consist of age group ranging from

18-30,30-45,45-60 and 60 & above. Following interpretation has been made on

the basis of the .information collected from individual investor's of various age groups through

questionnaire:

• Age group of 18-30 is more aware about services offered by porttol io manager whereas

age group of 60 & above is less aware of such services.

• Managemenl of mutual fund investment, management of equities, management of

money market iiwes tment, advi sory and consultancy services are the services provided by

the portfolio management institution. Amongst these, advisory and consultancy services are

the services that the individual investors are more aware of.

• Due to lack of experience and market knowledge, the age group of 45-60

Is more Interested to hire portfolio manager at present in order to manage their portfolio. The

age group ranging from 18-30 Is more Interested in making Investment in equities whereas

group ranging from 60 & above are more interested In making investment in mutual fund. On

the other hand, age group of 30-45 and 45-60 are least interested In any of the services

provided by portfolio management institution. Reasons specified for the presence of

disinterest in any of these services were that the investors are having good hold on their

investment. Also they possess good knowledge with regards to market fluctuations,

investment porttolio's and other factors relating to portfolio management.

• All the age groups of individual investors in portfolio management believe that there is a

better scope for portfolio management in future.

CHAPTER 6

CONCLUSION

From the above discussion it is clear that portfolio functioning is based on market risk, so

one can get the help from the professional portfolio manager or the Merchant banker if

required before investment because applicability of practical knowledge through technical

analysis can help an

investor to reduce risk. In other words Security prices are determined by money manager

and home managers, students and strikers, doctors and dog catchers, lawyers and landscapers,

the wealthy and the wanting. This breadth of market participants guarantees an element of

unpredictability and excitement. If we were all totally logical and could separate. our

emotions from our investment decisions then, the determination of price based on future

earnings would work magn.ificently. And since we would all have the same completely

logical expectations, price would only change.

when quarterly reports or relevant news was released.

"I believe the future is only the past again, entered through another gate" -Sir Arthur

wing Pinero. 1893.

If price are based on investors' expectations, then knowing what a security should sell

for become less important than knowing what other investors expect it to sell for. "There are

two times of a man's life when he should not speculate; when he can't afford it and when he

can" - Mark Twin,1897.

A Casino make money on a roulette wheel, not by knowing what number will come

up next, but by slightly improvin.g their odds with the addition of a "C}" and "00". Yet

many investors buy securities without attempting to control the odds. If we believe that

this dealings Is not a

'Gambling" we have to start up it with intelligent way,

CHAPTER 7

BIBLIOGRAPHY

REFERENCE BOOKS:Security Analysis and Portfolio Management - Dr. P,K.BANDGAR Investment Analysis and Portfolio Management

Economic TImesNDTV PromForbes India M:lgazine, DARE MagazineMoney ceutrol.cemSecurities Analysis and Portfolio Management, sixth edition, Donald E Fisher, Ronald J.

Jordan, Portfolio management 571-572,

WEBLIOGRAPHY

SOURCES:

www.google.com www.yahoo.com

QUESTIONNAIRE

Survey on investor’s view about portfolio management

Name:

Age:

OCCupation:

1).Are you aware of services offered by portfolio manager?

A).Yes B).No

2).If yess, what types of services you are aware of?

A).Management of mutual fund investment

B).Management of Equties

C).Management of Money market investment

D).Advisory of consultancy services

E).Others

3).Would you like to hire a portfolio manager at present in future?

A).Yes B).No

4).If yes, for what type of services?

A).Investment in mutual funds.

B).investment in money market

C).advisory or consultancy service

D).investment in Equities

E). investment in other[s]

5). If No Why?

6). What is the percentage of commission that you arer ready to pay portfolio manager for services provided by him in?

A).Equities.

B).mutual fund investment

C).other investment

D).money market investment

E).advisory or consultancy services.