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

1
1.1
1.2
1.3
1.4
1.5
1.6

INFORMATION
Preface
Acknowledgement
Certificate
Table of Content
Introduction and Identification of the problem
Introduction
Meaning
Investment of portfolio management and portfolio
theory.
Basic Concept & components for portfolio management
objectives
Types of portfolio management

PAGE NO.
I
II
III
IV

1.7 Persons involved in portfolio management

2

Literature review

Introduction to Organization
3.1 Introduction to Kotak securities Ltd.

Research and Methodology

4.1 Methodology

6
7

Data analysis and interpretation

5.1 Primary survey
5.2 Finding
Recommendation and Conclusion
Bibliography

NEED FOR SELECTING

PROJECT

To get the overall

investment.

THE

knowledge of securities and

 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

portfolio

i.e. when

companies are managing their

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

allocation.

and asset

EXECUTIVE SUMMARY
Investing in equities requires time, knowledge and constant
monitoring of the Markel. For

those

who

10 help to manage their investments,

need

an

expert

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

about the foundations

expresses

IBM's viewpoint

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

investment

of

portfolio,

a portfolio

is goal-rive. For

the specific goal is to increase the

value.

an

Managing a portfolio involves inherent risks.

CHAPTER1.2
MEANING
OF
MANAGEMENT

PORTFOLIO

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
effective

or investment helps investors in

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
Bonds, Debentures, and

financial like Shares

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
securities belonging to any

of

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
projections portfolio

from the

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.ActivePortfolioStrat
yegy
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

boundaries,

and with business components.

and results

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

conformance

of actual (versus planned) performance and

to original expectations. Typically, organization

managers specify the frequency and contents for these periodic

reviews, and
planning

individual

and

dimensional,

portfolio

execution.

The

managers

over see their

reviews should

be multi-

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
organization

portfolio

management

practices

in

an

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
efforts and collections.

boundaries

Implementing

among work

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
decisionmaking.
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

continuously

-- to develop

and approve plans,

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
essentia.ls

management

Every

discipline

practical

is based on a collection

of

fundamental concepts that people have identified and proven

(and

sometimes

application.

refined

or discarded)

These concepts

through

continuous

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

supports would last even longer if their downstream

that such
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:
Important

Capital appreciation has become an

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
portfolio

Is

necessary.

In

are unavoidable

other

words.

errors

in

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
and

by

them

by status

(active,

proposed,

on-hold)

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
MANAGEMENT

OF

PORTFOLIO

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
management are as follows:

by

the

portfolio

1.

To frame
investment

the investment

strategy

mix to achieve

and

select

an

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
MANAGEMENT:

OF

PORTFOLIO

Portfolio management is on-going process involving the

following basic tasks:
)- Identification
and preferences.

of the investor's

objectives,

constraints

))- Strategies

are to be developed

and implemented

in

tune with investment policy formulated.

)- Review
portfolio.

and monitoring

of the performance

)- Finally the evaluation of the portfolio.

of the

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

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 diversification
through an indexed holding of virtually all securities in
the asset class.
SELECTION OF ASSET MIX

3)

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 highquality 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
logical set of steps

management

involves

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 asset
allocation 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
proper

management
combination

involves

maintaining

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 a
measure 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
return when

compared

have given an excellent

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 fundsaIarge 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
analytical methods

of the field and increase

use of

(e.q, quantitative techniques) in the investment decisionmaking, and

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

portfolio objectives-

increased

in

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

portfolio management

discretion

exercise

any

degree

of

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
remains

alert

and

sensitive

portfolio
to

the

manager
changes

always
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 2
Literature review.
The extensive literature review was performed upon our literature
search in
the field of project management, project portfolio management, and
particularly project portfolio selection. The search engine of Google
Scholar
(http://scholar.google.com/) and the database search facilities were
used to
find relevant books, theses, dissertations periodicals, scholarly and
peerreviewed
papers such as Academy of Management Journal; Journal of
Management Decision; Harvard Business Review; MIT Sloan
Management
Review; Academy of Management Review, International Journal
Project
Management; etc., in the database of universities, academic
publishers,
professional societies, EBSCO, Emerald, Blackwell Synergy, JSTOR,
and
Science Direct. Besides, the handouts and teaching notes provided by
professors during the whole MSPME course (Master of Science in
Strategic
Project Management - European) have also been referenced.
The extensive review of literature is aimed at improving our
understanding of
theoretical and practical concepts underpinning the process of project
portfolio selection. During the literature review, eight main academic
and
practical areas pertinent to our research question have been identified,
examined, and presented in the next sections:

a. Relevant definitions
b. Strategies for project portfolio selection
c. Decision making process supporting project portfolio selection
d. Constrained Resources / Theory of Constraints (TOC) and project
selection
e. Project categorization facilitating project portfolio selection
f. Project portfolio selection models or methods
g. Project portfolio selection process or framework
h. Challenges in project portfolio selection
2.1. Relevant Definitions
2.1.1. Corporate Strategy
There are a number of various defitions of strategy in the literature;
and in
pracice, strategy exits in every organziation (Yelin, 2005). However,
the
following defitions found are relevant to the discussion context in this
dissertation:
9
Minztberg et al. (1998, pp. 10-15) provided interesting discussions on
strategy
understanding 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; realized
strategy (Combination of the plan and pattern concepts explains
deliberate 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
the

heads of the collective strategist, and

o Ploy: a specific maneuver intended to outwit an opponent or
competitor.
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 long
term, which achieves advantages in a changing environment through
its
configuration of resources with the aim of fulfilling stakeholder
expectations;
adding that strategic management includes understanding strategic
position of
an organization, strategic choice for the future and turning strategy
into
action.

Chapter 3 Introduction to org

Chapter 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 Kotak
Mahindra 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
securities

distribution 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 noninstitutional
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 to
the 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 78 %.
Kotak Securities Limited is one of the larger players in
distribution of IPOs - it was ranked number One in 200304 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
LIMITED
J.

OFFERED

BY KOTAK SECURITIES

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 enable
customers 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 our
Bank, '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
projects'

Portfolio
profitability

mathematical
attention

models.

to balance

Management

techniques

or financial returns using heuristic or

However,
or aligning

this approach
the portfolio

organization's strategy. Scoring techniques weight

criteria

to

take

into

optimized

account

investment

paid .We
to the
and score

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,

products, and upgrades/enhancements/line

new

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
criterion.

below.
The

Weighting factors

evaluators

on

can be

a Product

set for

Committee

each
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

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.

1Cc.1TM.

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

becoming an increasingly
decisions
investment

is

important tool to make strategic

about

product

development

and

the

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
FINDINGS
This 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 TImes
NDTV Prom
Forbes India M:lgazine, DARE
Magazine
Money ceutrol.cem
Securities 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 investors 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.