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Welcome to the world of
Portfolio Management
Portfolio Management
Portfolio means….
Combination of many kinds of financial securities
OR
Any collection of financial assets.
Introduction
People who want to invest, generally invest in a group of securities
i.e. stocks / shares. Rather than only 1 type of securities.
Expected returns are higher
Investors believe that investing their money in many securities will
give them high returns, at the same time risk will be less.
Investment alternatives
Bank
deposit
LIC
scheme
Money
market
securities Gold
&
silver
Shares
And
debenture
s
GOI
Saving
bonds
Mutual
funds
Real
estates
PPF
National
saving
deposits
Public
deposits
Investment
avenues
High risk investments: Stocks
(shares), ULIPS, Mutual Funds etc.
Low Risks Investment: Banks FDs.
Recurring deposits, gold, property,
govt. bonds. PPF, NSC etc,.
Objectives of Portfolio management
Security of Principal investment
Consistency of returns
Capital growth
Marketability
Liquidity
Diversification of portfolio
Favourable tax status
I will Invest because…..
1. I want maximum utilization of money
2. I will get good returns on it.
3. I would invest for a longer period of time.
4. I will maximize my saving & minimize my spending
5. I will be Benefitted in future.
Economic
Investment
e.g.All
infrastructure
development
Financial
Investment
For capital
formation
Concept of Investment
From the point of view of economy
Investment objectives
Short term priority objectives
E.g. buying a house.
Long term priority objectives
Investment In pension funds
. Investment decision depends
on…..
1. Selection of Securities
2. Constant Shifting of Portfolio
3. Choice of Selecting
4. Types of securities
5. Understanding nature & priorities of investor.
6. Maximum Return with Minimum Risk
Portfolio Management includes the following
Types of portfolio management
Types of portfolio
management
Discretionary
Decisions are made by portfolio manager
Non Discretionary
Decisions are made by the client i.e. investor
himself
Advisory
Personalised investment guidance
Purpose of Portfolio Management
& Types of Risks
1. Reducing risk rather than increasing return.
2. Balancing risk against performance
Risk and return
Risks on portfolio
Interest rate risk
Purchasing power risk
Business risk
Financial risk
Systematic and unsystematic risk
Return on portfolio
Tools necessary to help make better portfolio management
decisions:
1. Good investment decisions
2. Managing multiple investments
3. Entering global markets
4. Fundamental Analysis and Technical Analysis
5. Investment research
6. Tax effective decisions
MUTUAL FUNDS
Meaning
A mutual fund is made up of a pool of funds
collected from many investors for the purpose
of investing in securities such as stocks,
bonds, money market instruments and similar
assets.
Portfolio management of UTI mutual fund:
(Opportunities Fund )
Portfolio management of HDFC mutual fund:
(Top 200 Fund )
Portfolio management of ICICI mutual fund:
( Blue-chip Equity Fund)
Examples of Mutual Fund:
Portfolio management of UTI mutual fund: (Opportunities Fund )
Sr. No. Sectors of Investment Investments
1 Finance & Banking 20.04
2 Software & IT 7.70
3 Oil & Gas 7.41
4 Automobiles 5.61
5 Engineering and Capital goods 5.40
6 Chemicals 1.35
7 Congomelarates 2.44
8 Telecom 1.84
9 Cement 6.54
10 Tabbacco 6.82
11 Consumers Non Durables 3.59
12 Minera l& Mining 1.98
13 Pharmaceuticals 3.70
14 Food & Beverages 3.35
15 Miscellaneous 7.17
16 Media & Entertainment 1.84
17 Utilities 1.38
18 Cash ( Current Assets) 1.48
Total 100.00
Portfolio management of HDFC
Mutual fund: (Top 200fund) Sr no Sector of investment Percentage (%)
1 Finance and banking 26.52
2 IT and software 9.4
3 Tobacco 6.08
4 Oil and gas 10.60
5 Automobile 3.65
6 Telecom 2.77
7 Pharmaceuticals 2.31
8 Cement 1.86
9 Media and entertainment 2.06
10 Utilities 1.03
11 Engineering & capital goods 5.76
12 Metals & mining 5.45
13 Consumers & non-durables 1.94
14 Miscellaneous 0.89
15 Others 17.61
16 Cash(CA) 2.07
Total 100%
Sr no Sector of investment Percentage
1 Financing and banking 23.18
2 Software and IT 15.10
3 Automobile 8.66
4 Oil & gas 11.02
5 Communications 4.81
6 Utilities 2.94
7 Consumer non-durables 2.04
8 Pharmaceuticals 4.97
9 Tobacco 7.40
10 Engineering & capital goods 2.69
11 Metals and mining 8.78
12 Conglomerates 2.20
13 Short term debt & others 6.21
Total 100%
Portfolio management of ICICI mutual fund
(Blue chip Equity fund)
Comparative study between different mutual
funds: UTI, HDFC & ICICI Sr.no Sector of investment UTI HDFC ICICI
1 Financing and banking 20.4 26.52 23.18
2 Software & IT 7.7 9.4 15.10
3 Automobile 5.61 3.65 8.66
4 Oil & gas 7.41 10.60 11.02
5 Engineering and capital goods 5.40 5.76 2.69
6 Communication 1.84 2.77 4.81
7 Tobacco 6.82 6.08 7.40
8 Cement and construction 6.54 1.86 -
9 Consumers non-durable 3.59 1.94 2.04
10 Conglomerates 2.44 - 2.20
11 Media & entertainment 1.80 2.06 -
12 Minerals & mining 1.98 5.45 8.78
13 Pharmaceuticals 3.70 2.31 4.97
14 Utilities 1.38 1.03 2.94
15 Chemicals 1.35 - -
16 Food & beverages 3.35 - -
17 Miscellaneous 7.17 0.89 -
18 Others - 17.61 -
19 CA(current assets) 11.24 2.07 5.97
Total 100% 100% 100%
Care to be taken while investing in Stock
Market From the study of different portfolios following conclusion is drawn
with respect to portfolio management.
1. Detailed study of company’s capital.
2. Detailed study of past data of company
3. Payment of dividend
4. Growth rate
5. Revenue and profit
6. Goodwill of company
Dos & Don'ts
Dos
Invest in different
sectors not a particular
sector.
(SWOT) of company
Select your investment
mix
DONTs
invest entire money in
one company.
Don’t manage multiple portfolios.
Happy Investing Start from Today