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Investment Avanue & Portfolio Mgmt

CHAPTER-I
INTRODUCTION TO THE STUDY
1.1 1.2 1.3 1.4 1.5 1.6 1.7 Introduction to the study Title of the study: Objectives of the study Research methodology Scope of study Limitation of the study Chapter scheme

Investment Avanue & Portfolio Mgmt

CHAPTER-1 RESEARCH DESIGN 1.1 Introduction: The present study entitled as Investment Avenues & Portfolio Management with special reference to Artani Shares & Mutual Fund Solapur deals with wide range of investment avenues and the risk and return factors associated with them. Investment is an activity that commits fund in any physical form. It is expected that this fund should fetch some additional return in the future. This amount of return may vary from minimum to maximum. This possibility is known as investment risk and it is well known that every investment involves a return and risk. Investment is an activity undertaken by those people who have sufficient savings. Savings are nothing but excess of income over expenditure. But all people who have sufficient savings will not be investors. They may be saving the amount for some other purposes than the investment. Thus savers and investors are different from each other. The saver who puts some amount in a box every day just for saving the amount, does not expect any return on this saving. but a saver who opens saving bank account and goes on depositing certain amount everyday, he expects a return from this saving ,in the form of interest. He is called an investor. This is how an investor is distinguished from a mere saver. The investors have a wide range of the investment avenues available to them. These investment avenues can be classified in the following categories: Non-Marketable financial assets, equity shares, bonds, Money market instruments, Mutual funds schemes, Life insurance Policies, real estates, precious objects and financial derivatives.
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The two key aspects of any investment are time and risk. The benefit is expected in the future and tends to be uncertain. In some investments like government bonds the time element is the dominant attribute. In other investments ,like stock options the risk element is the dominant attribute. In yet other investments, like equity shares both time and risk are important. Portfolio: A Portfolio is a combination of different investment assets mixed and matched for the purpose of achieving an investors goal(s). Items that are considered a part of your portfolio can include any asset you own from shares, debentures, bonds, mutual fund units to items such as gold, art and even real estate etc. However, for most investors a portfolio has come to signify an investment in financial instruments like shares, debentures, fixed deposits, mutual fund units. As per SEBI norms it refers to professional services rendered for management of portfolio of others namely clients or customers with help of experts in investments advisory services. It involves the advice regarding the worthlessness of any particular investment or advice of what to buy and sell and containing relationship with client to manage investments with or without discretion for the client as per his requirement. Some aspects of portfolio management: 1) A proper investment decision making of what to buy and sell. 2) Proper money investment in terms of investment in a basket of assets so as to satisfy the asset preferences of investors. 3) Reduce the risk and increase returns.

Investment Avanue & Portfolio Mgmt

1.2 Title of the study: Gone are the days when people were not aware of investment options like insurence plans, mutual funds, derivatives and commodities. Now the scenario has changed and the demand for new investment avenues is growing just like anything. Hence, the project is titled as A study of Investment avenues and Portfolio Management with reference to Artani Shares & Mutual Fund 1.3 Objectives: 1. To study of conceptual framework of portfolio management. 2. To study the portfolio choice of the customer of Artani Shares & Mutual Fund 3. To study of the factor affecting the individuals investment decision. 1.4 Research methodology Data has been collected by means of Primary and Secondary Sources. A) Primary Data: For the Present study primary data is collected through observation, interview and Question. B) Secondary Data: Secondary data has been collected through various publications like books, magazines & new papers, trade Journals, Reports, etc. Sample Size: The sample size for this projects report has been kept limited to the number of 50 respondents.On the basis of the information

Investment Avanue & Portfolio Mgmt

revealed by these respondents the data has been collected analyzed and interpreted. All Finding &Suggestion are based on this duly analyzed & interpreted data.

1.5 Scope of the study

The present study titled as Investment avenues and Portfolio Management falls in the area of Financial Management. The present study was under taken with special reference to Artani Shares & Mutual Fund Solapur. No comparative analysis has been performed. For collection of data, a questionnaire was prepared and distributed among a sample of 50 respondents in the solapur city.

1.6 Limitation 1) The time span in which the whole study was conducted was limited and short for carrying out the project. 2) Confidential data was not provided from the company like the actual working and handling of clients portfolio. 3) Many of the customers did not give correct information. This affects the outcome as well as the results of the study. 4) Many of the customers were reluctant to disclose the data.

Investment Avanue & Portfolio Mgmt

1.7 Chapter Scheme: Chapter-1(Introduction of the study):- This chapter deals with the introduction part of the project work. It covers the statement of the study, objectives, scope, research methodology and limitations of the project work. Chapter-2(Company Profile):-This chapter gives us various information regarding the company like name, location, establishment, origin and growth, group of companies, core services, structure. Chapter-3(Theoretical background):- In this chapter of the project report we can look for the theoretical background of the topic like different investments avenues available, their attributes and evaluation of each. Chapter-4 (Data Analysis & Interpretation):- Data analysis and interpretation is done in this chapter with the help of various tables and graphical representations.

Investment Avanue & Portfolio Mgmt

CHAPTER-II
COMPANY PROFILE

2.1 2.2 2.3 2.4 2.5 2.8 2.9

Name of the company Location of the company Establishment Origin & growth Directors & their background Group of companies Core services

2.10 Organizational Structure

Investment Avanue & Portfolio Mgmt

COMPANY PROFILE: COMPANY PROFILE: A) NAME OF THE COMPANY: ARTANI SHARES & MUTUAL FUND B) LOCATION OF THE COMPANY: 5/6 Goldfinch Peth, Solapur C) ESTABLISHMENT: 2005 D) ORIGIN AND GROWTH: Artani Shares & Mutual Fund stock broking Pvt. Ltd. is one of the leading brokers in secondary market having majority of market share in and around the adjoining areas of Solapur. Artani Shares & Mutual Fund is committed to delivering value along with client Satisfaction. Financially Artani Shares & Mutual Fund associated with retail services (KRC)KISAN RATILAL CHOKSEY SHARES & SECURITIES PVT. LTD. KRC is corporate member of MCK & NCDEX & Depository of BSE & NSE. The service network of SSKI over eighty year. Broking experience & expertise. In investment planning and execution. In Artani Shares & Mutual Fund finding member of the stock exchange Mumbai. It is also group interest in Investment banking, Institution broking & retail broking retail broking started in 1984.
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Artani Shares & Mutual Fund is basically ground network largest in India in there are 536 Franchisees & 224 branches. Covers 210 cities in 17 states across India. Trade executive facility on BSE and NSE for cash as well as derivatives. Depository/Demat account services. Personalized & Mutual Fund research advice. Uniform service standards. Artani Shares

KRC INVESTOR SERVICES PVT SSKI CORPORATE LTD PVT LTD A) Retail broking arm of the group B) Shareholding pattern 1) 56% Morakhia family (promoter) 2) 18.5 HSBC Private Equity Management Mauritius. 3) 18.5% First Carlyle Ventures, Mauritius 4) 7% Intel Pacific Inc.

FINANCE

A) Investment Banking arm of the group B) Shareholding pattern 1) 50.5 KRC Securities Pvt. Ltd. 2) 49.5% Morkhia Family

KRC GROUP CORPORATE STRUCTURE KRC One of India Leading brokerage house, is the retail arm of KRC.With over 510 shares in 170 cities, and Indias premier online trading portal www.Sharekhan.com customers enjoy multi-channel access to the stock market. INTEGRATED EQUITY SOLUTION PROVIDERS Among the top 3 branches retail service providers Multi channel access to client

Tailor made access to client.


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Tailor made research & products. Depository services. Derivatives segment. INTERNET TRADING LEADERSHIP THROUGH INNOVATION The site was launched on 8,February 2000 Speed Trade Plus launched on 28, October 2002 for derivatives trading. Leading player today with 20% market share. Over 8000 online clients. Speed Trade - The next generation technology product launched on 17,April 2002

INTERNET TRADING PRODUCTS: 3 key products: Classic account over the web for your delivery needs. Speed trade for day trading in cash market. Speed trade plus for the trade in cash as well as derivatives on single screen. INTEGRATED EQUITY SOLUTION PROVIDERS Among the top 3 branches retail service providers Multi channel access to client

Tailor made access to client. Tailor made research & products.


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Depository services. Derivatives segment.

INTERNET TRADING LEADERSHIP THROUGH INNOVATION E site was launched on 8,February 2000 Speed Trade Plus launched on 28, October 2002 for derivatives trading. Leading player today with 20% market share. Over 8000 online clients. Speed Trade - The next generation technology product launched on 17,April 2002

INTERNET TRADING PRODUCTS: 3 key products: Classic account over the web for your delivery needs. Speed trade for day trading in cash market. Speed trade plus for the trade in cash as well as derivatives on single screen.

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DIRECTORS &THEIR BACKGROUND Name Mr.Nitin S. Artani Background He is the promoter of Artani Shares & Mutual Fund .He has been associated with the capital market since 2004 Mr.Jairaj Goyal He is the promoter director of portfolio Manger .He has been associated with capital market since 2001. Mr.Tarun P.Shah He has vast experience in broking business and has been associated with capital market and SSKI group for Over 15 years. He looks after the operation

Mr. Shanker vaslya

He has been associated with the KRC group for over 15 years
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GROUP OF COMPANIES The Following 10 Group companies of the portfolio manager, S.S.Kantilal Ishwarlal Securities Pvt.Ltd. 1. Artani Shares & Mutual Fund commodities pvt.Ltd. 2. Artani Shares & Mutual Fund Financial Services pvt.Ltd. 3. KRC corporate Finance Pvt.Ltd. 4. Finflow investment Pvt.Ltd. 5. Palm Spring Estates Pvt.Ltd. 6. Archfund properties Pvt.Ltd. 7. Ideream Production Pvt.Ltd. 8. Monoplane plan Securities Pvt.Ltd. 9. Aishwarya Shares & Securities Pvt.Ltd.

CORE SERVICES Artani Shares & Mutual Fund is one of Solapurs broking house providing a complete life cycle of the investment solution in, Equities & Derivatives Trading Common Trading Depositing Services Portfolio Management services Mutual Fund IPO Services Fundamental & technical Research Online Trading
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ORAGANIZATIONAL STRUCTURE

CEO

Research CEO

Operation CEO

Sales CEO

Research Analysts D H. R. P M. H. H

R.S.M

R.M

Team manager

C.S.M.
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Assit.Manager

Sales executives

M.S. Trainee

M. Trainee

Office Committee 1. Mr. Jairaj Goyal 2. Mr. Girish kulkarni 3. Mr.Pratap Deokar 4. Mr. Kalyan Gujare 5. Mr.Yogesh Pahuja 6. Mr.vivek lohar 7. Mr.Bhavkar 8. Mr.Mansing Lingras 9. Mr.Prakash Acharya 10.Mr.Suraj Rangankar ( Research heads) (Operation Head ) (Sales head) (Head. Equity Sales ) (D.Ps Heads) (Forms&cheeks) (Head H.R.) (Asst. managers) (-------//----------) (Sales Executives)

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CHAPTER-3

THEORATICAL BACKGROUND

3.1 3.2 3.3 3.4

Investment avenues Investment attributes Evaluation of various investment avenues What is portfolio?

3.5 Definition of portfolio Management 3.6 Portfolio Management framework

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CHAPTER-3 THEORETICAL BACKGROUND 3.1 Investment Avenues:

As an investor one has a wide array of investment avenues available with him/her. Sacrificing some rigors, these may be classified as shown below; 1.Non-marketable Financial assets: A good portion of financial assets is represented by non-marketable financial assets. These can be classified into the following categories; Bank Deposits Post Office Deposits Company Deposits Provident fund Deposits

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3.1.2 Marketable Financial assets: 1. Equity Shares: Equity shares represent ownership capital. As an equity shareholder, one has an ownership stake in the company. This essentially means that you have a residual interest in income and wealth.

2. Bonds: Bonds or debentures represent long-term debt instruments. The issuer of a bond promises to pay a stipulated stream of cash flows. Bonds may be classified into the following categories; Government securities Government of India relief bonds Government agency securities PSU bonds Debentures of private sector companies

3. Money Market Instruments: Debt instruments which have a maturity of less than one year at the time of issue are called money market instruments. The important money market instruments are;
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Treasury bills Commercial paper Certificates of deposit 4. Mutual Funds: Instead of directly buying equity shares and/or fixed income instruments, one can participate in various schemes floated by mutual funds which, in turn, invest in equity shares and fixed income securities. There are three broad types of mutual fund schemes; Equity schemes Debt schemes Balanced schemes 5. Life insurance: In a broad sense, life insurance may be viewed as an investment. Insurance premiums represent the sacrifice and the assured sum the benefit. The important types of insurance policies in India are; Endowment assurance policy Money back policy Whole life policy Term assurance policy 6. Real estate: For the bulk of the investors the most important asset in their portfolio is a residential house. In addition to a residential house, the more affluent investors are likely to be interested in the following types of real estate;

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Agricultural land Semi-urban land 7. Precious Objects: Precious objects are items that are generally small in size but highly valuable in monetary terms. Some important precious objects are; Gold, silver & platinum Precious stones Art objects

8. Financial Derivatives: A financial derivative is an instrument whose value is derived from the value of an underlying asset. It may be viewed as a side bet on the asset. The most important financial derivatives from the point of view of investors are; Options Futures 3.2 Investment Attributes: For evaluating an investment avenue, the following attributes are relevant; Rate of return Risk Marketability
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Tax shelter Convenience

1) Rate of return: The rate of return on an investment for a period (which is usually a period of one year) is defined as follows; Rate of return = Annual income + (Ending price Beginning price) Beginning price 2) Risk: The risk of an investment refers to the variability of its rate of return. How much do individual outcomes deviate from the expected value? A simple measure of dispersion is the range of values, which is simply the difference between the highest and the lowest values. Other measures commonly used in finance are as follows; Variance: This is the mean of the squares of deviations of individual returns around their average value. Standard deviation: This is the square root of variance. Beta: This reflects how volatile is the return from an investment in response to market swings.

3) Marketability: An investment is highly marketable or liquid if: (a) it can be transacted quickly; (b) the transaction cost is low; and (c) the price change between two successive transactions is negligible.
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4) Tax Shelter: Some investments provide tax benefits; others do not. Tax benefits are of the following three kinds- Initial, Continuing and Terminal Tax benefits. 5) Convenience: Convenience broadly refers to the ease with which the investment can be made and looked after. The degree of convenience associated with investments varies widely. At one end of the spectrum is the deposit in a savings bank account that can be made readily and that does not require any maintenance effort. At the other end of the spectrum is the purchase of a property that may involve a lot of procedural and legal hassles at the time of acquisition and a great deal of maintenance effort subsequently.

3.3 Evaluation of various investment avenues:

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Return Curnt Capital Yield Apprctn Equity Shares Low High High Fairly high Nonconvertib le debentur es Equity schemes Low High High High Section 80 L benefit Very High High Negligble Low Average Nil High Section80 L benefit High Risk Marketabil ity Tax Shelter Convenien ce

Debt schemes High Low Bank Deposits Moderate Nil PPF Negligi b High Low High

No tax on dividends Very High Section 80 L benefit Sec.88 Very High

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Nil High Life Insuranc e Residenti al House Medium Medium Gold & Silver Nil Nil Medium

Nil

Average

benefit

Very High

Sec.88 Nil Average benefit Very High

Negligi b

Low

High

Fair

Medium Averag e

Average

Nil

Average

3.4 What is a Portfolio? A portfolio is a combination of different investment assets mixed and matched for the purpose of achieving an investors goal(s). As the investors acquire different sets of assets of financial nature, such as gold, silver, real estate, buildings, insurance policies, post office certificates, NSC or NSS etc., they are making a provision for future. The risk of each of such investments is to be understood before hand. Normally, the average householder keeps most of his income in cash or bank deposits and assumes that they are safe and least risky. Little does he realize that they also carry a risk with them-the fear of loss or actual loss or theft and loss of real value of these assets through the rise in price or inflation in the economy. Cash carries no interest or income and bank deposits carry a nominal rate of 3.5% on savings
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deposits, no interest on current account and a maximum of 6% on term deposits of one year. The liquidity on fixed deposits is poor as one has to wait for the period to maturity or take loan on such amount but at a loss of income due to penal rate. Generally, risk averters invest only in banks, P.O. and UTI and mutual funds. Gold, silver, real estate, Nidhis and chit funds are the other avenues of investment for average householder, of middle and lower income groups. If the investor desired to have a real rate of return which is substantially higher than the inflation rate he has to invest in relatively more risky areas of investment like shares and debentures of companies or bonds of Government and Semi-Government agencies or deposits with companies and firms. Investment in chit funds, Nidhis, company deposits, and in private limited companies has the highest risk. But the basic principle is that the higher the risk, the higher is the return and the investor should have a clear perception of the elements of risk and return when he makes investments. Risk Return analysis is thus essential for the investment and portfolio management. 3.5 Definition of Portfolio Management: Many times the investors go on acquiring these assets in an ad-hoc and unplanned manner and the result is high risk, low return profile which they may face. All such assets would constitute his portfolio and the wise investor not only plans his portfolio as per his risk return profile or preferences but manages his portfolio efficiently so as to secure the highest return for the lowest risk profile at that level of investment. This in short is the Portfolio Management. 3.6 Portfolio Management Framework:

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Portfolio Management is a complex process or activity that may be divided into seven broad phases: Specification of investment objectives and constraints Choice of asset mix Formulation of portfolio strategy Selection of securities Portfolio execution Portfolio rebalancing Performance evaluation 1 Specification of investment objectives and constraints: The first step in the portfolio management process is to specify ones investment objectives and constraints. The commonly stated investment goals are: Income- To provide a steady stream of income through regular interest/ dividend payment Growth- To increase the value of the principle amount through capital appreciation Stability- To protect the principal amount invested from the risk of loss.

Since income and growth represent two ways by which return is generated and stability implies containment or even elimination of risk, investment objectives may be expressed more succinctly in terms of return and risk. As an investor one might primarily be interested in a higher return and a lower level of risk. However, return and risk typically go hand in hand.
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How much risk one might be willing to bear to seek a higher return, depends on his/her risk disposition. Risk-Return Tradeoff: The risk-return tradeoff can be expressed in the form of an indifference curve. The following figure shows three broad types of utility curve. The linear indifference curve depicted in Fig. a, represents the riskreturn tradeoff of an investor who is willing to bear additional risk if there is a proportional increase in return. The concave indifference curve, shown in fig. b, describes the preferences of a risk-lover. He is willing to assume disproportionately higher amount of risk for earning additional returns. Finally, the convex indifference curve, shown in fig. c, reflects the preferences of the investor who requires disproportionately higher returns for bearing additional risk. As investors generally have a diminishing marginal utility for wealth, their risk-return tradeoff is represented by a convex utility curve.

Return

Return

Return

Risk Fig. a

Risk Fig. b

Risk Fig. c

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Constraints:In pursuing investment objective, which is specified in terms of return requirement and risk tolerance, one should bear in mind constraints arising out of or relating to the following factors Liquidity- What are your liquidity needs in the foreseeable future that need to be reflected in designing your portfolio? Taxes- Given your tax situation, what kinds of tax shelter, if any, should you seek? Time horizon- What time horizon is appropriate for your portfolio? Unique preferences and circumstances which has some bearing on the portfolio decisions.

2 Selection of Asset Mix: In the scheme of investments, one must accord top priority to a residential house and a suitable insurance cover. In addition, one must maintain a comfortable liquid balance in a convenient form to meet expected and unexpected expenses in the short run. Once these are adequately provided for, the asset mix decision is mainly concerned with financial assets which my be divided into two broad categories, viz. stocks and bonds. Stocks include equity shares (which in turn may be classified into income shares, growth shares, blue chip shares, cyclical shares, speculative shares and so on) and units/shares of equity-oriented schemes of mutual funds. Bonds, defined very broadly, consist of non-convertible debentures of private sector companies, public sector bonds, gilt-edged securities, RBI Relief Bonds, units/shares of debt-oriented schemes of mutual
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funds, NSC, Kisan Vikas Patras, bank deposits, post office savings deposits, fixed deposits with companies, deposits in provident fund and public provident fund schemes, deposits in National Savings Scheme, and so on. The basic characteristic of these investments is that they earn a fixed or near-fixed return.

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Risk-Return Relationship for various types of Bonds and Stocks:

Speculative Share

Blue-chip Shares

NCDs of Private Sector Public Sector Bonds Defensive Shares Growth Shares

Retun Bank Deposits

Income / Growth Oriented units

Risk

3 Formulation of Portfolio Strategy: After choosing a certain asset mix, one has to formulate an appropriate portfolio strategy. Two broad choices are available in this respect, an active portfolio strategy or a passive portfolio strategy.
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Active Portfolio Strategy: An active Portfolio Strategy is followed by most investment professionals and aggressive investors who strive to earn superior returns, after adjustment for risk. The four principal vectors of an active strategy are, market timing, sector rotation, security selection and use of a specialized concept. Market Timing: This involves departing from the normal asset mix to reflect ones assessment of the prospects of various assets in the near future. Market timing is based on an explicit or implicit forecast of general market movements. Sector Rotation: the concept of sector rotation can be applied to stocks as well as bonds. It is, however, used more commonly with respect to the stock component of the portfolio where it essentially involves shifting the weightings for various industrial sectors based on their assessed outlook. Security Selection: Perhaps the most commonly used vector by those who follow an active portfolio strategy, security selection involves a search for under-priced securities. As far as bonds are concerned, security selection calls for choosing bonds which offer the highest yield to maturity at a given level of risk. Use of Specialized Investment Concept: a fourth possible approach to achieve superior returns is to employ a Specialized Investment Concept or philosophy, particularly with respect to investment in stocks.

Passive Portfolio Strategy:

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The active strategy is based on the premise that the capital market is characterized by inefficiencies which can be exploited by resorting to market timing or sector rotation or security selection or use of a specialized concept or some combination of these vectors. The passive strategy, on the other hand, rests on the tenet that the capital market is fairly efficient with respect to the available information. Hence, the search for higher returns by an active strategy is considered futile. Operationally, how is the passive strategy implemented? Basically, it involves adhering to the following two guidelines: 1) Create a well-diversified portfolio at a pre-determined level of risk. 2) Hold the portfolio relatively unchanged over time, unless it becomes inadequately diversified or inconsistent with the investors risk-return preferences.

4 Selection of Securities: Selection of Bonds(Fixed Income Avenues):

One should carefully evaluate the different factors in selection of bonds like the yield to maturity which represents the rate of return earned by the investor if he invests in the fixed income avenue and holds it till its maturity. To assess the risk of default on a bond, you may look at the credit rating of the bond. If no credit rating is available, examine relevant financial ratios of the form and assess the general prospects of the industry to which the firm belongs. Several fixed income avenues offered tax shield; now very few do so. If the fixed income avenue can be converted wholly or partly into cash at a fairly short notice, it possesses liquidity of a higher order. Selection of Stocks:
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Three broad approaches are employed for the selection of equity shares: technical analysis, fundamental analysis and random selection. Technical analysis looks at price behavior and volume data to determine whether the share will move up or down or remain trend less. Fundamental analysis focuses on fundamental factors like the earnings level, risk exposure to establish the intrinsic value of a share. The random selection approach is based on the premise that the market is efficient and securities are properly priced. 5 Portfolio Execution: By the time this phase of portfolio management is reached, several key issues have been sorted out. Investment objectives and constraints have been specified, asset mix has been chosen, portfolio strategy has been developed, and specific securities to be included in the portfolio have been identified. The next step is to implement the portfolio plan by buying and /or selling specified securities in given amounts. This is the phase of portfolio execution which is often glossed over in portfolio management literature. However, it is an important practical step that has a significant bearing on investment results. Further, it is neither simple nor costless as is sometimes naively felt. For effectively handling the portfolio execution phase, one should understand what the trading game is like, what is the nature of key players (transactors) in this game, who are the likely winners and losers in this game, and what guidelines should be borne in mind while trading. 6 Portfolio Revision: Irrespective of how well one has constructed its portfolio, it soon tends to become inefficient and hence needs to be monitored and revised periodically. Over time several things are likely to happen. The asset allocation in the portfolio may have drifted away from its target, the risk and return
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characteristics of various securities may have altered; finally, the objectives and preferences of the investor may have changed. Given the dynamic developments in the capital market and changes in the circumstances, one has to periodically monitor and revise its portfolio. This usually entails two things, viz. portfolio rebalancing and portfolio upgrading.

Portfolio Rebalancing: Portfolio Rebalancing involves reviewing and revising the portfolio composition (i.e. the stock-bond mix). There are three basic policies with respect to Portfolio Rebalancing- buy and hold policy, constant mix policy, and portfolio insurance policy. Portfolio Upgrading: While portfolio rebalancing involves shifting from stocks to bonds or vice-versa, portfolio upgrading calls for re-assessing the risk-return characteristics of various securities (stocks as well as bonds), selling overpriced securities and buying under-priced securities. It may also entail other changes the investor may consider necessary to enhance the performance of the portfolio. 7 Performance Evaluation: The key dimensions of portfolio performance evaluation are rate of return and risk. Rate of Return:The rate of return from a portfolio for a given period (which may be defined as a period of one year) is measured as follows:

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Dividend income + Terminal value Initial value Initial value

Risk:- The risk of a portfolio can be measured in various ways. The two most commonly used measures of risk are: variability and beta.

Variability- The Bank Administration Institute of the US recommended the use of variability of the quarterly rates of return of the portfolio.

Beta- A measure of risk commonly advocated is beta. The beta of a portfolio is computed the way the beta of an individual security is computed. To calculate the beta of a portfolio, regress the rate of return of the portfolio on the rate of return of a market index.

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CHAPTER NO.04

DATA ANALYSIS & INTERPRETATION

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CHAPTER - 4 DATA ANALYSIS & INTERPRETATION


TABLE NO.1 Table Showing Education of the Respondents Particulars 1) Up to HSC 2) Graduate 3) PG 4) Un educated Total No. of Respondents 8 9 18 15 50 Percentage 16 18 36 30 100%

Up to H S C Graduate PG uneducated

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The above table and graph shows that Education of the Respondents. 18 Respondents (i.e. 36%) are post Gradutes and 15 Respondents (i.e. 30%) of them are Uneducated. 09 Respondents (i.e. 18%) of them are Graduate and 08 Respondents (i.e. 16%) of them are Up to H.S.C TABLE NO. 2 Table Showing Occupation of Respondents Occupation 1) Businessmen 2) Service 3) Agriculture 4) Professional Total No. of Respondents 17 12 10 11 50 Percentage 34 24 20 22 100%

B us ines s s ervice Ag riculture Profes s ional

The above table and graph shows that Occupation of the Respondents.17 Respondents (i.e. 34%) Respondents are the Businessmen and 12 Respondents (i.e. 24%) of them are employed in the Service and 11

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Respondents (i.e. 22% )of them

are the Professional person

and 10

Respondents (i.e. 20%) of them are Agriculture.

TABLE NO. 3 Table Showing Age Group of Respondents Particulars (Age Group) 1) Below 25 yrs 2) 25 to 35 yrs 3) 35 to 45 yrs 4) Above 45 yrs Total No. of Respondents 10 20 11 9 50 Percentage 20 40 22 18 100%

bleow 25 yrs 25 to 35 35 to 45 above 45 yrs

The above table and graph shows Respondents Age Group of 20 Respondents (i.e. 40%) are in the age group of 25-35 . 11 Respondents (i.e. 23%) of them are in the age group of 35-45 . 10 Respondents (i.e. 20%) of

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them are below 25years and 09 Respondents( i.e. 18%) of them are in the age group of above 45years.

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TABLE NO. 4 Table Showing Monthly Income Level of Respondents Monthly Income(in Rs.) 1) 10,000 15,000 2)15,000 - 25,000 3) 25,000 30,000 4) Above 30,000 TOTAL No. of Respondents 18 9 9 14 50 Percentage 36 18 18 28 100%

1 0000-15000 1 500-25000 2 5000-30000 Above 30000

The above table and graph shows Monthly Income Level of Respondents. Out of total, 18 Respondents( i.e. 36%) Respondents income is in between Rs.10000-15000/-.14 Respondents (i.e. 28%) of the Respondents income is more than Rs.30000 . 09 Respondents (i.e. 18%)that have their income in between Rs.15000-Rs.25000,while the remaining as respondents fall in the income range of Respondents income is Rs.25000 35000. TABLE NO. 5
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Table Showing Monthly expenditure of Respondents Particulars (in Rs.) 1) Less than 5000 2)5000-7000 3) 7000 -12000 4) 12000-15000 5) Above 15,000 Total No. of Respondents 14 12 11 6 7 50 Percentage 28 24 22 12 14 100%

L ess than 50 00 5 0 00 -70 00 7 0 00 -12 00 0 1 2 00 0-1 50 00

The above table and graph shows monthly expenditure of respondents. Out of total 14 respondents (i.e. 28%) respondents monthly expenditure is less than Rs. 5000. And 12 respondents (i.e. 24%) respondents expenditure is in the range of Rs.5000 7000 and 22% of respondents are having monthly expenditure between Rs. 7000 12000 and remaining 12% and 14% of respondents are having expenditure between 12000-15000 and above 15000 respectively. TABLE NO. 6 Table showing period of association of the respondents with Artani Shares & Mutual Fund through PMS.

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Particular 1) Since last one year 2)2-3 years 3)3-5years 4) More than 5 years TOTAL

No. of Respondents 19 12 11 08 50

Percentage 38 24 22 16 100%

S ince las t One ear 2-3 years 3-5 years m ore than 5 years

The above table and graph shows Respondents association with Artani Shares & Mutual Fund PMS. Out of the total 19 respondents (i.e. 38%) are getting service since last one year. 12 respondents (i.e. 24% ) are getting service from 2-3 years. and 11 respondents ( i.e. 22% ) are since last 3-5 years, and lastly 8 respondents (i.e. 16%) are getting service for more than last 5 years.

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Investment Avanue & Portfolio Mgmt

TABLE NO.7 Table Showing different Investment avenues used by Investors Particulars 1) FD 2) NSC 3) PF 4) Insurance 5) Company Shares 6) Post office 7) Debentures TOTAL No. of Respondents 09 04 08 13 10 4 2 50 Percentage 18 08 16 26 20 08 04 100%

FD

NSC

PF

Insurance

The above graph and table shows the different investment avenues for the respondents. Out of total 13 respondents (i.e. 26%) prefer to invest in the insurance, 10 respondents (i.e. 20%) prefer to invest in the shares of company, 9 respondents (i.e. 18%) prefer FD, 8 respondents (i.e. 16%) prefer to invest in the PF, 4 respondents (i.e. 8%) each prefer Post office investment and NSC.Lastly the 2 respondents (i.e. 4%) prefer to invest their savings in the debentures.
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Investment Avanue & Portfolio Mgmt

TABLE NO.8 Table Showing preference to Investment avenues in the Artani Shares & Mutual Fund Particulars 1). Mutual Fund 2). Equity 3). P.M.S. 4). IPO 5).Commodity TOTAL No. of Respondents 12 25 10 05 08 60 Percentage 20 42 17 08 13 100%

Mutual F und Equity PMS IPO C o

The above table and graph shows preference to investment avenues in the Artani Shares & Mutual Fund It is clear from the table that majority of respondents (i.e.42%) have given preference to the equity option,12 Respondents( i.e. 20%) prefer the Mutual fund investment, 10 respondents (i.e. 17% )prefer the PMS option for investment, 5 respondents (i.e. 8%) prefer the IPO and 8 respondents (i.e. 13%) prefer the commodity option for investment at the Artani Shares & Mutual Fund limited. TABLE NO.9
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Investment Avanue & Portfolio Mgmt

Table showing Respondents preference towards duration of investment Particulars 1).Short term period (Less than 6 months) 2).Medium term period (6 month 2 years) 3).Long term period (More than 2 year) TOTAL No. of Respondents 19 13 18 50 Percentage 38 26 36 100%

S hort-term Mediumterm L ong -term 4th Qtr

The above table and graph shows the Duration of Investment preferred by the Respondents. Out of total respondents 19 respondents (i.e. 38%) prefer to invest for the short term period, 13 respondents (i.e. 26%) prefer to invest for the Medium term, 18 respondents (i.e. 36%) prefer the long term period for investment.

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Investment Avanue & Portfolio Mgmt

TABLE NO.10 Table showing Minimum Investment slab. Investment slab (in Rs.) 1) 1) <5,000 2 2)10,000 15,000 3) 15,000 - 20,000 4) Above 20,000 TOTAL No. of Respondents 22 15 08 05 50 Percentage 44 30 16 10 100%

Les s than 500 0 100 00-15000 150 00-20000 above 20000

The above table and graph shows the Minimum investment slab for Artani Shares & Mutual Fund Out of total respondents 22 respondents (i.e. 44%) prefer the investment slab of less than Rs.5000, 15 respondents (i.e. 30%) prefer the investment slab between Rs.10000 Rs.15000, 8 respondents (i.e. 16% ) prefer the Rs.15000 Rs. 20000 investment slab, 5 respondents (i.e. 10%) prefer the investment slab above the Rs.20000. TABLE NO.11 Table showing Respondents reason to invest through PMS

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Investment Avanue & Portfolio Mgmt

Particulars 1). High Returns 2). Safety 3). Less Charge 4). Less Risk TOTAL

No. of Respondents 20 13 08 09 50

Percentage 40 26 16 18 100%

H ig h-R eturns S a fety L ess-c ha rg e L essR isk

The above table and graph shows the reasons for investment in PMS by the respondents. Out of total respondents, 20 respondents (i.e. 40%) invest for getting high return, 13 respondents (i.e. 26%) invest for safety, 8 respondents (i.e. 16%) invest because of the less charges and 9 respondents (i.e. 18%) invest for the less risk involved in PMS.

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Investment Avanue & Portfolio Mgmt

TABLE NO.12 Table Showing Returns Expected by Respondent through PMS Particulars 1). Less than 20 % 2). 21 % - 30 % 3). 31 % - 40 % 4). 41 % - above TOTAL No. of Respondents 16 12 08 14 50 Percentage 32 24 16 28 100%

Les stha n 20% 21-30% 31-40% 41-Above

The above table and graph shows the returns expected by the respondents through PMS. Out of total respondents, 16 respondents ( i.e. 32%) expect the less than 20% return, 12 respondents (i.e. 24% )expect 21 30 % return, 8 respondents (i.e. 16% ) expect the return between the 31 40%, 14 respondents ( i.e. 28% )expect the returns of above 41%.

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Investment Avanue & Portfolio Mgmt

TABLE NO.13 Table Showing PMS Account with other companies. Particulars 1).Karvey 2).Motilal Oswal 3).Reliance Money 4).Religare 5).Angel Broking 6).Geogit 7) Non of them TOTAL No. of Respondents Percentage 8 11 5 4 5 2 15 50 % 16 22 10 8 10 4 30 100

K arvey m otilal O sw al Reliance m oney Relig are A ng el Broking Geog ir Non of them

The above table and graph shows the PMS account with companies. Out of total respondents 8 respondents (i.e. 16%) are having the PMS account with Karvey, 11 respondents (i.e. 22%) are with Motilal Oswal, 5 respondents (i.e. 10%) are with Reliance Money, 4 respondents (i.e. 8%) are with the Religare, 5 respondents (i.e. 10%) with the Angel Broking, 2 respondents (i.e. 4%) with the Geojit and 15 i.e. 30% respondents are having PMS account with Sharekhan.
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Investment Avanue & Portfolio Mgmt

CHAPTER NO.05

FINDING &SUGEESATION

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Investment Avanue & Portfolio Mgmt

FINDING small saving schemeIf uyou are invested in small saving scheme then you get a fixed return on this , But return is low.

Small saving scheme are risk free.

BONDS & DEPOSITE Low risk Reasonable investment tensure Nomination facalities available Can not be traded in secondary market.

MUTUAL FUNDS The reason of mutual funds are so popular is that they offer the ability to easily invest in increasingly more complicated financial market. A large part of the success of mutual funds is also the advantages they offer in term of diversification, liquidity. professional management and

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Investment Avanue & Portfolio Mgmt

Flexiblity- Mutual funds investments also offer you a lot of flexiblity with feature such as systematic investment plan, systematic withdrawal plans & divident plan. AFFORDABLITY They are available in units so this maket it very affordable because the large corpus, even a small investor can benefits from investment strategy.

DIVERSIFICATION Risk is divert in mutual funds invest in different stocks & sectors or industries. Professional management- Expert fund manager of the mutual fund analysis all points based on expertise. LOW COAST- The benefits of scale in brokrage, custodian and other regulated to safeground the investor.

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Investment Avanue & Portfolio Mgmt

LIFE INSURANCEThere are many scheme for life insurance. IN insurance plan tax benefits available to customer.

EQUITIESEffency- Deals are completed instantaneously online. A purcheased stock is added immediately to your portfolio and when you sell the cash immediately avilable for investment.

Low COAST-

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Investment Avanue & Portfolio Mgmt

There is charge a very low coast. i.e. 0.50% on the amount when buy or sell.

TRANSPARANCYWhich stock you buy, tht transction is seen you. Flexiable to deal online and phone.

SUGGESTIONCompany should give more attention on the board promotion. Most of yhe person do not know ARTANI SHARES & MUTUAL FUND board. Market should be segmant according to

customer income it win help to target the customer & to set the marketing strategy. To know the custmer and sastifaction, service

product,performance

about

customer feedback is very necessary. For that


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Investment Avanue & Portfolio Mgmt

company can do market research or can do it online.

K.I.T.s I.M.E.R. MBA Summer Project A study of Investment Avenues & Portfolio Mgmt. w.r.t Artani Shares & Mutual Fund Solapur. CUSTOMER QUESTIONNAIRE 1. NAME: 2. Address: 3. Education: 1) Up to HSC 3) PG 2) Graduate 4) Un educated

4. Occupation

1) Business men

2) Service
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Investment Avanue & Portfolio Mgmt

3) Agriculture

4) Professional

5. Age

1) Below 25 yrs 3) 35 to 45 yrs

2) 25 to 35 yrs 4) Above 45 yrs

6. What is your monthly income? 1) Rs. 10,000 15,000 3) Rs. 25,000 30,000 7. What is your monthly expenditure? 1) Less than 5000 3) 7000 12,000 5) Above 15,000 2) 5000 7000 4) 12,000 15,000 2) 15,000 to 25,000 4) Above 30,000

8. Since how long you are dealing with PMS through Share khan Ltd? 1) Since last one year 3)3-5years 2)2-3 years 4) More than 5 years

9. What are different Investment tools you use for Investment? 1) FD 3) PF 5) Company Shares 7) Debentures 2) NSC 4) Insurance 6) Post office

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Investment Avanue & Portfolio Mgmt

10.Which of the following Share khans investment avenues do you prefer? 1). Mutual Fund 3). P.M.S. 5).Commodity 2). Equity 4). IPO

11. What is your preference towards duration of investment? 1). Short term period (Less than 6 months) 2). Mid term period (6 month 2 years) 3). Long term period (More than 2 year)

12. What is your min.Investment slab while investing through Share khans avenues? 1) <5,000 3) 15,000 - 20,000 2) 10,000 15,000 4) Above 20,000

13. Why do you invest your money through PMS? 1). High Returns 3). Less Charge 2). Safety 4). Less Risk

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Investment Avanue & Portfolio Mgmt

14. How much yearly% of return you expect from PMS? 1). Less than 20 % 3). 31 % - 40 % 2). 21 % - 30 % 4). 41 % - above

15. Do you have PMS Account other than Share khan? If yes then in which of the following? 1). Karvey 3). Reliance Money 5). Angel Broking 7) Non of them 2).Motilal Oswal 4).Religare 6).Geogit

Bibiliography

Artani Investments Report

Questionnaire

Security Analysis & Portfolio Management Reference Book


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Investment Avanue & Portfolio Mgmt

( Tata Mcgraw Hill)

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