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