SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT

Assignment
1. Prepare a detailed list of Investment Avenues
2. Read and understand the various investment avenues available along with the respective
attributes of each avenue.
3. Identify any SIX of the investment avenues available in India for Individual Investors out
of the list you created/understood in point one.
4. Study in detail SIX investment avenues that you identified in point two above in order to
know the respective attributes (i.e., in terms of Risk, Return, Liquidity, Security,
Marketability and Convenience) of each of such SIX avenues.
5. Narrate those attributes for each of those SIX assets separately by using separate table
given below for each asset.
6. Assign the attributes in the seventh table with these three levels (i.e., Low, Moderate and
High) for the asset class you chosen.
7. Finally Draw the interpretation and conclusion

List of Investment Avenues

S. No Name of the Asset

1. Senior Citizens’ Savings Scheme

2. Sukanya Samriddhi Yojana

3. Public Provident fund

4. National Savings Certificate

5. RBI bonds

6. Pradhan Mantri Vaya Vandana

7 Debt Mutual Funds

8. Listed Tax free bonds

9. Tax saving Fixed deposits

10. 5-year bank fixed deposits

 11. Voluntary Provident Fund

12. Debt Mutual Funds

13. Equity shares

Investment Avenues with their Attributes

Table 1 – Name of the Asset
Assets / Senior Citizens’ Savings Scheme

Attributes

Risk Low risk

Return High interest rates. Average of 7.4%

Liquidity 5 year lock in period

Security No security

Marketability Suitable for those above the age of 60(senior citizens)

Convenience 80C benefits, Not a tax free instrument

Table 2 – Name of the Asset

Assets / Sukanya Samriddhi Yojana

Attributes

Risk Low risk

Return High interest rates, 7.60%

Liquidity Can be withdrawn before maturity without any penalty

Security No security to be attached

Marketability Only for parents with a girl child

Convenience Max amount is 1.5L hence suitable for lower income meaning households.

80C benefits, Not a tax free instrument

 Table 3 – Name of the Asset
Assets / Public Provident fund

Attributes

Risk Low risk

Return High tax free interest rates, 7.10%

Liquidity Long 15 year tenure. Can be broken

Security No security to be attached

Marketability Not traded, Those in high tax bracket can opt

Convenience 80C benefits and Tax-free interest

Table 4 – Name of the Asset

Assets / National Savings Certificate

Attributes

Risk Low risk

Return Moderate interest, 6% avg

Liquidity 5 year lock in period

Security No security to be attached

Marketability Not tradable

Convenience Investors who are looking for risk free instruments. Only 80 C benefits

Table 5 – Name of the Asset

Assets / RBI bonds

Attributes

Risk Safest debt product. No cap on investment

Return High interest, 7.75%

Liquidity Lock in for 7 years.

Security No security to be attached

Marketability Traded. Invest only spare money

Convenience No 80C and tax free benefits

Table 6 – Name of the Asset

Assets / Pradhan Mantri Vaya Vandana

Attributes

Risk Low risk

Return Moderate interest, 7.40%

Liquidity 10 year lock in period

Security No security

Marketability Not traded. Senior citizens can opt for this

Convenience No 80C and Tax free benefits offered

Table 7
Investment Avenues with their Attributes – A Comparison
(Level of Attributes - Low, Moderate and High)
Attributes
Sl. Name of the
No Assets Risk Return Liquidity Security Marketability Convenience

1 Senior Low High Low No No Moderate

Citizens’
Savings
Scheme

2 Sukanya Low High Moderate No No High for low

 Samriddhi income
Yojana earners

3 Public Low High Low No No High

Provident fund

4 National Low Modera Low No No Moderate

Savings te
Certificate

5 RBI bonds Low High Low No No Moderate

6 Pradhan Low Modera Low No No High

Mantri Vaya te
Vandana

Conclusion
As an investor who is below the age of 60( senior citizen), I will eliminate investing in Senior
Citizens’ Savings Scheme, Pradhan Mantri Vaya Vandana Yojana. Since I am a male, I will not
be eligible for Sukanya Samriddhi Yojana.
This leaves me with NSC, RBI bonds and Public Provident fund.
Since I will become a working professional in a year, a public provident fund will be one of my
main investment options due to its attributes stated above.
Hence, I will allocate my money among RBI bonds and NSC since both are considered low risk
and provide good rates of return