PORTFOLIO MANAGEMENT

Group Members
Monisha Parekh Siddhessh Gadkar Siddhant Iyer Prathamesh Sulegay Premanand Ghag Nikhil Mukhane

What is Portfolio
Portfolio is a group of financial assets such as shares, stocks, bonds, debt instruments, mutual funds, cash equivalents, etc. A portfolio is planned to stabilize the risk of non-performance of various pools of investment.

Portfolio refers to invest in a group of securities rather to invest in a single security.

Dont Put all your eggs in one basket Portfolio help in reducing risk without sacrificing return.

Portfolio Management
Portfolio Management is the process of creation and maintenance of investment portfolio. Portfolio management is a complex process which tries to make investment activity more rewarding and less risky.

Objectives of Portfolio Management

1. Stable Current Return:Once investment safety is guaranteed, the portfolio should yield a steady current income. The current returns should at least match the opportunity cost of the funds of the investor. 2. Marketability:A good portfolio consists of investment, which can be marketed without difficulty. If there are too many unlisted or inactive shares in your portfolio, you will face problems in encasing them, and switching from one investment to another.

3. Tax Planning:Since taxation is an important variable in total planning, a good portfolio should enable its owner to enjoy a favorable tax shelter.

4. Appreciation in the value of capital:A good portfolio should appreciate in value in order to protect the investor from any erosion in purchasing power due to inflation. In other words, a balanced portfolio must consist of certain investments, which tend to appreciate in real value after adjusting for inflation.

5. Liquidity:The portfolio should ensure that there are enough funds available at short notice to take care of the investors liquidity requirements. It is desirable to keep a line of credit from a bank for use in case it becomes necessary to participate in right issues, or for any other personal needs.
6. Safety of the investment:Investment safety or minimization of risks is one of the important objectives. You can try and minimize the overall risk or bring it to an acceptable level by developing a balanced and efficient portfolio.

TYPES OF PORTFOLIO MANAGEMENT

TYPES OF PORTFOLIO MANAGEMENT

Discretionary

Non Discretionary

Advisory

1} Discretionary: Under these services, the choice as well as the timings of the investment decisions rest solely with the Portfolio Manager. 2} Non Discretionary: Under these services, the portfolio manager only suggests the investment ideas. The choice as well as the timings of the investment decisions rest solely with the Investor. However the execution of trade is done by the portfolio manager.

3}Advisory: Under these services, the portfolio manager only suggests the investment ideas. The choice as well as the execution of the investment decisions rest solely with the Investor. Note: In India majority of PMS providers offer Discretionary Services.

BASIC PRINCIPLES OF PORTFOLIO MANAGEMENT

There are two basic principles for effective portfolio management which are given below:1. Effective investment planning for the investment in securities by considering the following factors:a. Fiscal, financial and monetary policies of the Govt. of India and the Reserve Bank of India. b. Industrial and economic environment and its impact on industry. c. Prospect in terms of prospective technological changes, competition in the market, capacity utilization with industry and demand prospects etc.

2) Constant review of investment:Its require to review the investment in securities and to continue the selling and purchasing of investment in more profitable manner. a. To assess the quality of the management of the companies in which investment has been made or proposed to be made. b. To assess the financial and trend analysis of companies balance sheet and profit loss Accounts to identify the optimum capital structure and better performance for the purpose of withholding the investment from poor companies. c. To analysis the security market and its trend in continuous basis to arrive at a conclusion as to whether the securities already in possession should be disinvested and new securities be purchased. If so the timing for investment or disinvestment is also revealed.

 What is Portfolio Management Services (PMS)? Portfolio Management Services (PMS) is an investment portfolio in stocks, fixed income, debt, cash, structured products and other individual securities, managed by a professional money manager that can potentially be tailored to meet specific investment objectives. Who can offer PMS? PMS can be offered only by entities having specific SEBI registration for rendering portfolio management services. Currently in India PMS is offered primarily by asset management companies (AMCs) and brokerage houses.

PMS and Mutual Funds: The Differences

Features PMS Provide ongoing, personalized access to professional money management services. Portfolio can be tailored to address each investor's specific needs. Mutual Fund

Management

Provide access to professional money management services. Portfolio structured to meet the fund's stated investment Objectives. Shareholders own shares of the fund and cannot influence buy and sell decisions or control their exposure to incurring tax Liabilities.

Customization

Ownership

Investors directly own the individual securities in their portfolio, allowing for tax management flexibility.

Liquidity

Although managers may hold cash, they are not required to hold cash to meet redemptions.
Significantly higher minimum investments than mutual funds. Generally, minimum ranges from: Rs. 1 Crore + for Equity Options Rs. 5 Crore + for Fixed Income Options.

Mutual funds generally hold some cash to meet Redemptions.

Minimums

Provide ongoing, personalized access to professional money management services.

Flexibility

Generally more flexible than mutual funds. The Portfolio Manager may move to 100% cash if required .

Comparatively less flexible.

Phases of Portfolio Management

Portfolio management is a process of many activities that aimed to optimizing the investment. Five phases can be identified in the process: 1. 2. 3. 4. 5. Security Analysis. Portfolio Analysis. Portfolio Selection. Portfolio revision. Portfolio evaluation. Each phase is essential and the success of each phase is depend on the efficiency in carrying out each phase.

Conclusion
PMS help you identify your investment objectives and also outline important requirements like liquidity, capital appreciation, current income, time span and fiscal implications and then suggest an appropriate scheme. Your portfolio of investments in stock market will tailored after a thorough research backed by the expertise

An experienced team of portfolio managers ensure your portfolio is tracked, monitored and optimised at all times.