A PROJECT REPORT

on

A STUDY ON PORTFOLIO MANAGEMENT,

in the subject INVESTMENT MANAGEMENT

Submitted to
University of Mumbai
for IVth Semester of M.Com.
BY

PRIYANKA BHUMESH GUNDLA

Roll No. 11
under the guidance of
Prof. SUNIL GUJARAN
2015-2016

C E R T I F I C ATE

This is to certify that the project entitled A STUDY ON PORTFOLIO

MANAGEMENT, Roll No.11 student of M.Com. International Finance
(University of Mumbai) (IVth Semester) examination has not been submitted for
any other examination and does not form a part of any other course undergone by
the candidate. It is further certified that she has completed all required phases of
the project. This project is original to the best of our knowledge and has been
accepted for Internal Assessment.

Internal Examiner

External Examiner

Co-ordinator

Principal

College seal

DECLARATION

I, Ms. Priyanka Bhumesh Gundla student of M.Com. (Semester IVth), Roll No.
11 hereby declare that the project for the Subject INVESTMENT
MANAGEMENT title A STUDY ON PORTFOLIO MANAGEMENT,
submitted by me to University of Mumbai, examination during the academic year
2015-2016, is based on actual work carried by me under the guidance and
supervision of Prof. SUNIL GUJARAN.

I further state that this work is original and not submitted anywhere else for any
examination.

PRIYANKA BHUMESH GUNDLA

Signature of student ______________

ACKNOWLEDGEMENT

At the beginning, I would like to thank GOD for his shower of blessing. The desire
of completing this project was given by my guide Prof. SUNIL GUJARAN. I am
very much thankful to him for the guidance, support and for sparing his precious
time from a busy schedule.

I would fail in my duty if I dont thank my parents who are pillars of my life.
Finally I would express my gratitude to all those who directly and indirectly helped
me in completing this project.

PRIYANKA BHUMESH GUNDLA

INDEX
Sr.No

SUBJECT

PORTFOLIO MANAGEMENT

INSTRUMENT OF SECURITIES
2
3

MUTUAL FUND

FUNDAMENTAL ANALYSIS

RISK RETURN ANALYSIS

DATA ANALYSIS

CONCLUSION

Pg.No.

CHAPTER 1.
PORTFOLIO MANAGEMENT

PORTFOLIO
PORTFOLIO MANAGEMENT
BASIC PRINCIPLES OF PORTFOLIO MANAGEMENT
OBJECTIVES OF PORTFOLIO MANAGEMENT
THE PORTFOLIO MANAGEMENT PROCESS
SCOPE OF PORTFOLIO MANAGEMENT

PORTFOLIO
A combination of securities with different risk & return characteristics will
constitute the portfolio of the investor. Thus, a portfolio is the combination of
various assets and/or instruments of investments. The combination may have
different features of risk & return, separate from those of the components. The
portfolio is also built up out of the wealth or income of the investor over a period
of time, with a view to suit his risk and return preference to that of the portfolio
that he holds. He portfolio analysis of the risk and return characteristic o f
individual securities in the portfolio and changes that may take place in
combination with other securities due to interaction among themselves and impact
of each one of them on others.

PORTFOLIO MANAGEMENT
Portfolio management is the professional management of various securities
(shares, bonds and other securities) and assets (e.g., real estate) in order to meet
specified investment goals for the benefit of the investors.
The art and science of making decisions about investment mix and policy,
Matching investment to objectives, asset allocation for individuals and institutions,
and balancing risk against performance.
Portfolio management is all about strengths, weaknesses, opportunities and threats
in the choice of debt vs. equity, domestic vs. international, growth vs. safety, and
many other tradeoffs encountered in the attempt to maximize return at a given
appetite of risk.

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. Prospect
in terms of perspective technological changes, competition in the market,
capacity utilization with industry and demand prospects etc.
2. Constant Review of Investment:
It requires to review the investment in securities and to continue the selling
and purchasing of investment in more profitable manner. For this purpose they
have to carry the following analysis:
a) To assess the quality of the management of the companies in which
investment has been made proposed to be made.

b) To assess the financial and trend analysis of companies Balance Sheet

and Profit and Loss Accounts to identify the optimum capital structure and better
performance for the purpose of withholding the investment from poor companies.

c) To analyze the security market and its trend in continuous basis to arrive
at a conclusion as to whether the securities already in possession should be and
new securities be purchased. If so the timing for investment or disinvestment is
also revealed.

OBJECTIVES OF PORTFOLIO MANAGEMENT

The major objectives of portfolio management are summarized as below:1. SECURITY/SAFETY OF PRINCIPAL: Security not only involves keeping
the principal sum intact but also keeping intact its purchasing power intact.

2. STABILITY OF INCOME: So as to facilitate planning more accurately and

systematically the reinvestment consumption of income.

3. CAPITAL GROWTH: This can be attained by reinvesting in growth securities

or through purchase of growth securities.

4. MARKETABILITY: It is the case with which a security can be bought or sold.

This is essential for providing flexibility to investment portfolio.

5. LIQUIDITY I.E. NEARNESS TO MONEY: It is desirable to investor so as

to take advantage of attractive opportunities upcoming in the market.

6. DIVERSIFICATION: The basic objective of building a portfolio is to reduce

risk of loss of capital and / or income by investing in various types of securities
and over a wide range of industries.

7. FAVOURABLE TAX STATUS: The effective yield an investor gets from his
investment depends on tax to which it is subject. By minimizing the tax burden,
yield can be effectively improved.

THE PORTFOLIO MANAGEMENT PROCESS:

The portfolio management process is the process an investor to aid him in meeting
his investment goals.
The procedure is as follows:
1. CREATE A POLICY STATEMENT- A policy statement is the statement that
contains the investors goals and constrains as it relates to his investments.

2. DEVELOP AN INVESTMENT STRATEGY- This entails creating a strategy

that combines the investors goals and objectives with current financial market and
economic conditions.

3. IMPLEMENT THE PLAN CREATED This entails putting the investment

strategy to work, investing in a portfolio that meets the clients goals and constraint
requirements.

4. MONITOR AND UPDATE THE PLAN Both markets and investors needs
change as time changes. As such, it is important to monitor for these changes as
they occur and to update the plan to adjust for the changes that have occurred.

SCOPE OF PORTFOLIO MANAGEMENT:

Portfolio management is a continuous process. It is a dynamic activity. The
following are the basic operations of a portfolio management.
1. Monitoring the performance of portfolio by incorporating the latest market
conditions.
2. Identification of the investors objective, constraints and preferences.
3. Making an evaluation of portfolio income (comparison with targets and
achievement).
4. Making revision in the portfolio.
5. Implementation of the strategies in time with investment objectives.

CHAPTER 2.
INSTRUMENT
OF
SECURITIES

LONG TERM SECURITIES.

SHORT TERM SECURITIES.

INSTRUMENTS OF SECURITIES:
A. LONG TERM SECURITIES:
1. SHARE (EQUITY AND PREFERENCE SHARE): A unit of ownership that
represents an equal proportion of a companys capital. It entitles its holder (the
shareholder) to an equal claim on the companys profits and an equal obligation for
the companys debts and losses.
Two major types of share are:
a. Ordinary shares (common stock), which entitle the shareholder to share in
the earnings of the company as and when they occur, and to vote at the companys
annual general meetings and other official meetings.
b. Preference shares (preferred stock) which entitles the shareholder to a fixed
periodic income (interest) but generally do not give him or her voting rights.

2. DEBENTURE: A debenture is defined as a certificate of agreement of loans

which is given under the companys stamp and carries an undertaking that the
debenture holder will get a fixed return (fixed on the basis of interest rates) and the
principal amount whenever the debenture matures.

3. BOND: A bond is a fixed interest financial asset issued by governments,

companies, banks, public utilities and other large entities. Bonds pay the bearer a
fixed amount a specified end date. A discount bond pays the bearer only at the
ending date, while a coupon bond pays the bearer a fixed amount over a specified
interval (month, year, etc) as well as paying a fixed amount at the end date.

B. SHORT TERM SECURITIES

1. COMMERCIAL BILL: Commercial bill is a short term, negotiable, and selfliquidating instrument with low risk. It enhances the liability to make payment in a
fixed date when goods are bought on credit.
2. TREASURY BILL: The Treasury bills are short-term money market instrument
that mature in a year or less than that. The purchase price is less than the face
value. The Treasury Bills are marketable, affordable and risk free. The security
attached to the treasury bills comes at the cost of very low returns.
3. CALL / NOTICE MONEY: The call/ notice/ term money market is a market
for trading very short term liquid financial assets that are readily convertible into
cash at low cost.
4. COLLATERALIZED BORROWING AND LENDING OBLIGATION: A
money market instrument that represents an obligation between a borrower and a
lender as to the terms and conditions of the loan. Collateralized borrowing and
lending obligations (CBLOs) are used by those who have been phased out of or
heavily restricted in the interbank call money market.

5. CERTIFICATE OF DEPOSIT: The certificates of deposit are basically time

deposits that are issued by the Commercial banks with maturity periods ranging
from 3months to five years. The return on the certificate of deposit is higher than
the Treasury Bills because it assumes a higher level of risk.

6. COMMERCIAL PAPER: Commercial Paper is short-term loan that is issued

by corporation use for financing accounts receivable and inventories. Commercial
Papers have higher denominations as compared to the Treasury Bills and the
Certificate of Deposit. The maturity periods of Commercial Papers are a maximum
of 9 months. They are very safe since the financial situation of the corporation can
be anticipated over a few months.

CHAPTER 3.

MUTUAL FUND

MEANING OF MUTUAL FUND.

CHARACTERISTICS OF MUTUAL FUND.
ADVANTAGES OF MUTUAL FUND.
DISADVANTAGES OF MUTUAL FUND.

MUTUAL FUND
Mutual Fund is a mechanism for pooling the resources by issuing units to the
investors and investing the funds in securities in accordance with objectives as
disclosed in other document. Investment in securities are spread across a wide
cross-section of industries and sectors and the thus the risk is reduced.
Diversification reduces the risk because all stocks may not move in the same
direction in the same proportion at the same time. Mutual Fund issues units to be
investors in accordance with quantum of money invested by them. Investors of
mutual funds are known as the unit holders.
The profit or losses are shared by the investors in proportion to their investments.
The mutual funds normally come out with a number of schemes with different
investment objectives which are launched from time to time. A mutual fund is
required to be registered with Securities and Exchange Board of India (SEBI)
which regulates securities markets before it can collect funds from the public.
A Mutual Fund is a trust that pools the savings of investors who share a common
financial goal. The money thus collected is then invested in capital market
instruments such a shares, debentures and other securities. The income earned
through these investments and the capital appreciations realized are shared by its
unit holders in proportion to the number of units owned by them. Thus Mutual
Fund is the most suitable investment for the common man as it offers an
opportunity to invest in a diversified, professionally managed basket of
securities at a relatively low cost. The flow chart below describes broadly the
working of a mutual fund.

CHARACTERISTICS OF MUTUAL FUND

 The Mutual Fund belongs to those investors who have invested their money for
future earning.
It is managed by professionally who charge the fees for their services, from the
fund.
Investors purchase Mutual Fund shares from the fund itself (or through a
broker for the fund) instead of from other investors on a secondary market).
The price that investors pay for Mutual Fund share is the funds per share NET
ASSET VALUE (NAV) which is updated everyday plus any shareholders fees
that the fund imposes at the time purchase (such as sales loads).

Mutual Fund shares REEDEMABLE, which means investors can sell their
shares back to the fund (or to a broker acting for the fund).

ADVANTAGES OF MUTUAL FUND

1. PROFESSIONAL MANAGEMENT
Qualified investment professionals who seek to maximize returns and minimize
risk monitor investors money. When a person buys in to a mutual fund, he/she is
handling his/her money to an investment professional who have experience in
making investment decisions.
2. DIVERSIFICATION
Mutual fund unit-holders can get the benefit from diversification techniques
usually available only to investors wealthy enough to buy significant positions in
a broad variety of securities. The diversification process may add to the stability
of the returns.
3. AFFORDABILITY
A mutual fund invests in a portfolio of assets, i.e. bonds, shares, etc.
depending upon the investment objective of the scheme. An investor can buy in to
a portfolio of equities, which would otherwise be extremely expensive. Each
unit holder thus gets an exposure to such portfolios with an investment as

modest as Rs.500/-. So, it would be affordable for an investor to build a portfolio

of investments through a mutual fund rather than investing directly in the stock
market.
4. FLEXIBILITY
An investor owns just one security rather than many, yet enjoy the benefits of a
diversified portfolio and a wide range of services. Fund managers decide what
securities to trade collect the interest payments and see that the dividends on
portfolio securities are received and investors rights exercised. It also uses the
services of a high quality custodian and registrar in order to make sure that the
convenience of investor remains at the top of the minds of AMCs.
5. LIQUIDITY
In open-ended mutual funds, investors can redeem or get their money back
either all or part of their units any time they wish. But in some schemes do have
a lock-in period where an investor cannot return the units until the completion of
such a lock-in-period.

6. TRANSPARENCY
Open-ended mutual funds release their Net Asset Value daily and the entire
portfolio monthly. By this investor can get regular information on the value of
the investment in addition to disclosure in the specific investments made by the
mutual fund scheme. This level of transparency, where the investor himself sees
the underlying assets bought with his money, is unmatched by any other
financial instrument.
7. TAX BENEFITS

Any income distributed after March 31, 2002 will be subject to tax in the
assessment of all Unit holders. However, as a measure of concession to Unit
holders of open-ended equity-oriented funds, income distributions for the year
ending March 31, 2003, will be taxed at a concessional rate of 10.05%. In case
of Individuals and Hindu Undivided Families (HUF) a deduction upto Rs. 9,000
from the Total Income will be admissible in respect of income from investments
specified in Section 80I, including income from Units of the Mutual Fund. Units
of the schemes are not subject to Wealth-Tax and Gift-Tax.
8. REGULATIONS
Securities Exchange Board of India (SEBI), the mutual funds regulator has
clearly defined rules, which govern mutual funds. These rules relate to the
formation, administration and management of mutual funds and also prescribe
disclosure and accounting requirements. Such a high level of regulation seeks to
protect the interest of investors.
DISADVANTAGES OF MUTUAL FUNDS:
1. LOWER-THAN-MARKET PERFORMANCE: Generally, most actively
managed mutual funds have not beaten benchmarks over the long-term. While in
some years actively managed funds outperform their fund counter parts, the
support for actively managed funds for longer periods of time is low.
2. HIGH COSTS: Unless you analyze funds carefully before you buy them, you
may inadvertently choose a mutual fund that charges significant management
fees, custodial fees, and transfer fees.
3. INABILITY TO PLAN FOR TAXES: Mutual funds distribute 95 percent of all
capital gains and dividends to shareholders at the end each year. Even if

shareholders do not sell their mutual fund shares, they may be required to pay a
significant tax bill each year.
4. PREMIUM OR DISCOUNTS: Shares purchased by new investors dilute the
value of the shares owned by current investors. When new money enters the
mutual fund at net asset value, the money must be invested, which costs roughly
0.5 percent in an average U.S. stock fund. Thus, the funds of current investors
are used to stabilize purchase of the new ones.

CHAPTER 4.

FUNDAMENTAL ANALYSIS
ECONOMIC ANALYSIS
INDUSTRIAL ANALYSIS
COMPANY ANALYSIS

FUNDAMENTAL ANALYSIS
A. ECONOMIC ANALYSIS
The level of economic activity has an impact on investment in many ways if
the economy grows rapidly the industry can also be expected to show rapid
growth and vice versa.
The commonly analyzed some factors under the economic analysis are as
follows:
1. GROSS DOMESTIC PRODUCT (GDP): GDP indicates the rate of
growth of the economy. GDP indicates the aggregate value of goods and
services are produced in the economy the high GDP growth rate is more
favorable to the stock market.
2. SAVING AND INVESTMENT: It obvious that growth required
investment and investment required savings, therefore savings and
investment pattern of the public affect the stock to a great extent.
3. INFLATION: Along with the growth of GDP if the inflation rate is
increases then the real rate of growth would be very little. Therefore high
inflation rate is harmful to stock market and low inflation rate is beneficial
for stock market.
4. INTEREST RATE: The interest rate affects the costs of financing to the
firm a decrease in interest rate implies lower cost of finance for firm and
have profitability more. Money is available at lower interest rate thereafter it
will create favorable environment to the stock market.

5. BUDGET: Budget consists of government revenue and expenditure. A

deficit budget can adversely affect the stock market and surplus budget may
also harm to the stock market but balanced budget is highly favorable to the
stock market.
6. TAX STRUCTURE: Tax reliefs are given to encourage savings therefore
ten years of tax holiday should be given to new industries for there set up.
High tax structure may give bad impact on profitability of the business
therefore this will be harmful for the stock market.
7. BALANCE OF PAYMENT: The balance of payment is the record of
countries money receipts and payments from abroad. The difference between
receipts and payments may be surplus or deficit. A surplus balance of
payments gives a positive effect on stock market but deficit balance of
payment gives a negative effect on stock market.
8. INFRASTRUCTURE: Infrastructure facilities are essential for growth of
industrial and agriculture sector. A wide network of communication system
is must for the growth of economy. Good infrastructure facilities affect the
stock market in positive ways and vice-versa.

B. INDUSTIRAL ANALYSIS
There are some factors under industry analysis so that investor has to analysis
before the investment they also listed below:

1. GROWTH OF THE INDUSTRY: The historical performance of the industry

in terms of grown profitability should be analyzed before the investment.

2. COST STRUCTURE AND PROFITABILITY: The cost structure that is fixed

and variable cost affects the cost of production and profitability of the firm. Higher
the fixed cost component, greater sales volume is required to reach the breakeven
point.

3. NATURE OF PRODUCT: It is also considered under the industry analysis

because products produced by the industry are demanded by the consumers and
other industries.

4. NATURE OF COMPETITION: It is essential factor that determines for the

demand for particular product, its profitability and price of the concern company
shares.

5. GOVERNMENT POLICY: The government policy affects the very nerve of

the industry and the effects differ from industry to industry. Tax subsidies and tax
holidays are provided for export oriented products, government also regulates the
size of production and pricing of certain products. If policy is favorable to the
industry then industry should be selected.

6. LABOUR: The analysis of labour scenario is of great importance. The number

of trade unions and there operating made an impact on the labour productivity and
modernization of the industry. The industry which have skilled labour and nonoccurring of strikes they should be selected.

7. RESEARCH AND DEVELOPMENT: For any industry to survive the

completion in the national and international market, depends on the research and
development department so that industry which is having active and innovative
research and development department should be selected before making an
instrument.

C. COMPANY ANALYSIS
Company analysis on the basis of following factor:
1. COMPETITIVE EDGE OF THE COMPANY:
The competitiveness of the company is being analyzed under this factor.
The competitiveness of the company can be study with the help of;
a) Market share.
b) Growth of annual sales.
c) The stability of annual sales.

2. EARNINGS OF THE COMPANY: Sales alone do not increase the earnings

but the cost and expenses of the company also influence the earning of the
company. Therefore, if the company is having low cost and low expenses can be
selected.

3. CAPITAL STRUCTURE: The equity holders return can be increased with the
help of financial leverage that is using debt financing along with equity financing.
The effects of the financial leverage ratio. The debt ratios indicate the positioning
long term and short term debt ratios indicate the positioning long term and short
term in the company finance. Before selection of company, for investment we
should overlook. On the capital structure should be proper mix of equity and debt
(balanced).

4. MANAGEMENT: Goods and capable management generates profit to the

investors the management of the firm should efficiently plan organize and control
the activities of the company. Therefore investors should not ignore the
management of a company in the time of investment.

5. OPERATIONAL EFFICIENCY: It is one of the most important factors which

are being considered by investors for investment because operating efficiency by a
company directly effects the earning of the company. If the company maintaining
high operating efficiency of a company will have low breakeven point and then
low breakeven point company can generate profit in a very short span of time.

6. FINANCIAL STATEMENT: It is an important factor for analysis before

investment because best source of financial information of a company is its own
financial statements.

CHAPTER 5.

RISK RETURN
ANALYSIS

RISK ON PORTFOLIO.
TYPES OF RISK.
RISK RETURN ANALYSIS.
RETURNS ON PORTFOLIO.

RISK ON PORTFOLIO

The expected returns from individual securities carry same degree of risk.
Risk on the portfolios is different from the risk on individual securities. The risk is
reflected in the variability of the returns from zero to infinity. Risk of the
individual assets or a portfolio is measured by the variance of its return. The
expected return depends on the profitability of the returns and their weighted
contribution to the risk of the portfolio. These are two measures of risk in this
context one is the absolute deviation and other standard deviation. Most investors
invest in a portfolio of assets, because as to spread risk by not putting all eggs in
one basket. Hence, what really matters to them is not the risk and return of stocks
in isolation, but the risk and return of the portfolio as a whole. Risk is mainly
reduced by Diversification.

TYPES OF RISK:
1. INTEREST RATE RISK:

This arises due to the variability in the

interest rates from time to time. A change in the interest rate establishes an inverse
relationship in the price of the security i.e. price of the security tends to move
inversely with change in rate of interest, long term securities show greater
variability

in the price with respect to interest rate changes than short term

securities.
Interest rate risk vulnerability for different securities is as under:

TYPES
Cash Equivalent

RISK EXTENT
Less vulnerable to interest rate risk.

Long Term Bonds

More vulnerable to interest rate risk.

2. PURCHASING POWER RISK: It is known as inflation risk also

eliminates from the very fact that inflation affects the purchasing power adversely.
Nominal return contains both the real return component and an inflation premium
in a transaction involving risk of the above type to compensate for inflation over an
investment holding period. Inflation rates vary over time and investors are caught
unaware when rate of inflation changes unexpectedly causing erosion in the value
of realized rate of return and expected return. Purchasing power risk is more in
inflationary conditions especially in respect of bonds and fixed income securities.
It is not desirable to invest in such securities during inflationary periods.
Purchasing power risk is however, less in flexible income securities like equity

shares or common stock where rise in dividend income off-sets increase in the rate
of inflation and provides advantage of capital gains.

3. BUSINESS RISK: Business risk emanates from sale and purchase of

securities affected by business cycles, technological changes etc. Business cycles
affect all types of securities i.e. there is cheerful movement in boom due to bullish
trend in stock prices of all types of securities during depression in their market
price.

4. FINANCIAL RISK: It arises due to changes in the capital structure of the

company. It is also known as leveraged risk and expressed in terms of debt-equity
ratio. Excess of risk vis--vis equity in the capital structure indicates that the
company is highly geared. Although a leveraged companys earnings per share are
more but dependence on borrowings expenses it to risk of winding up for its
inability to honor.

5. Its commitments towards lender or creditors. The risk is known as leveraged or

financial risk of which investors should be aware and portfolio should be aware
portfolio managers should be very careful.

6. SYSTEMATIC RISK OR MARKET RELATED RISK:

Systematic risks affected from the entire market are (the problems, raw material
availability, tax policy or government policy, inflation risk, interest risk and
financial risk). It is managed by the use of Beta of different company shares.

7. UNSYSTEMATIC RISKS: The unsystematic risks are mismanagement,

increasing inventory, wrong financial policy, defective marketing etc, this is
diversifiable or avoidable because it is possible to eliminate away this component
of risk to a considerable extent by investing in a large portfolio of securities. The
unsystematic risk stems from inefficiency magnitude of those factors different
from one company to another.

RISK RETURN ANALYSIS

All investment has some risk. Investment in shares of companies has its own risk
or uncertainty; these risks arise out of vulnerability of yields and uncertainty of
appreciation or depreciation of share prices, losses of liquidity etc.
The risk over time can be represented by the variance of the returns while the
return over time is capital appreciation plus payout, dividend by the purchase price
of the share.

Normally, the higher the risk that the investor takes, the higher is the return. There
is, however, a risk less return on capital of about 12% which is the bank, rate
charged by the R.B.I or long term, yielded on government securities at around 13%
to 14%. This risk less return refers to lack of variability of return and no
uncertainty in the repayment or capital. But other risks such as loss of liquidity due
to parting with money etc., may however remain, but are rewarded by the total
return on the capital.
Risk-return is subject to variation and the objectives of the portfolio manager are to
reduce that variability and thus reduce the risk by choosing an appropriate
portfolio.
Traditional approach advocates that one security holds the better, it is according to
the modern approach diversification should not be quantity that should be related
to the quality of scripts which leads to quality of portfolio.
Experience has shown that beyond the certain securities by adding more securities
expensive.

RETURNS ON PORTFOLIO

Each security in a portfolio contributes return in the proportion of its investments

in security. Thus the portfolio expected return is the weighted average of the
expected return, from each of the securities, with weights representing the
proportions share of the security in the total investment. Why does an investor have
so many securities in his portfolio? If the security ABC gives the maximum return
why not he invests in that security all his funds and thus maximize return? The
answer to this questions lie in the investors perception of risk attached to
investments, his objectives of income, safety, appreciation, liquidity and hedge
against loss of value of money etc. would all be described under the caption of
diversification, which aims at the reduction or even elimination of non-systematic
risks and achieve the specific objectives of investors.

CHAPTER 6.

DATA
ANALYSIS

DATA ANALYSIS
COMPARISON BETWEEN SECURITIES:
RETURN
Equity

High

SAFETY
Low

VOLATILITY

LIQUIDIT

High

Y
High

Moderate

Low

Corporate

Moderate

Low

Low

Low

Debentures
Company Fixed

Moderate

Low

Low

Low

Deposits
Bank Deposits
PPF

Low High
Moderate

High
High

High
High

High
Moderate

Life Insurance

High
Low

High

High

Low

Financial

Moderate
Moderate

High

Moderate

Moderate

Institutions bonds
Gold

High
Moderate

High

Moderate

Moderate

Real Estate
Mutual Fund

Low
Low
High

Moderate
High

High
Moderate

Low
High

From the above chart we get information about the instruments of securities and
their features and also we can compare these instruments on the basis of our
interest.

CONCLUSION

Project portfolio management is aimed at reducing inefficiencies that occur when

undertaking a project and eliminating potential risks which can occur due to lack of
information or systems available.
It helps the organization to align its project work to meet the projects whilst
utilizing its resources to the maximum.
Therefore, all the project managers of the organization need to have an awareness
of the organizational project portfolio management in order to contribute to the
organizational goals when executing respective projects.
Portfolio Management is a viable process for business today, if there is a need to
address one or more of the following situations in the business environment:
1. Resources are limited.
2. Investments need to be printed.
3. Budgets have been, or are being slashed.
4. Investments projects, programs and initiatives need to be treated holistically,
including funding and tracking.
The PM Process may be appropriate for use in prioritizing and monitoring
investments charged with the responsibility, accountability and authority for level
of the enterprise.

Basically, we found that portfolios exist in multiple tiers throughout the company.
The differentiator between portfolios is dictated by screening criteria that supports
the company, group and organizational business strategies. Not all investments
need to be approves and monitored at the highest levels of the company. Rather,
with the various levels of the company. Rather, with the various levels of
accountability, authority and responsibility come the either recognized, or
unrecognized, portfolio of investments in their various cycle phases.
I can conclude from this project that portfolio management has become an
important service for the investors to identify the companies with growth potential.
Portfolio management can provide the professional advice to the investors to make
an intelligent and informed investment.
Portfolio management role is still not identified in the recent time but due it
expansion of investors market and growing complexities of the investors the
services of the portfolio managers will be in great demand in the near future.

FINDINGS

Based on the analysis and evaluation of the project, it can be concluded that:

The investor can know the risk and returns of the shares using this analysis.
The analysis is useful for investors who to invest in long, short & medium
term.
Technical analysis is used to predict short-term share price movement.

SUGGESTIONS
SUGGESTIONS TO THE COMPANY:
As it is clear from the observation to overcome this painful situation the
following is suggestion:
1. Educate the Customer about your term and condition briefly.
2. Improvement can come by market survey.
3. Visit College/University and teach them (college student) about share
market and other investment alternative that can student aware about Share
market.
4. Company has very limited interaction with people. So interact with your
customer as well as people who visit your company.
5. Be up-to-date about full information about share market.
6. Your induction manual was not out-to-date which is provided by you.
7. Dont

misbehave with your customer and student if he/she is not

understanding about share market. Because share market is very complicated

than other market.
8. Dont invest or squire off the product without permission of concern
customer. Inform them before the investment or any other activity.

9. Your brokerage charge is variable than other brokerage house. It should

not be negotiable. In this condition you should set your plan and policy
regarding brokerage charge. Lack of this small investor de-motivate by this
activity.
10. Suggest about low risk investment like Commodity Market.
These suggestions improve the present condition of bonanza Portfolio
Ltd, and become a biggest brokerage house in Ranchi city also in National
level. These suggestions prevent from losses and move forward to profit.
And become trustful company in eye of customer.

SUGGESTIONS TO INVESTORS:
1. Start earlier to savings.
2. Select stocks across of broad spectrum of market categories.
3. Invest with discount brokerage firm.
4. Make sure that you put money into your investment on a regular,
discipline basis.
5. Assign a certain percentage of your portfolio to growth stocks, dividend
paying stocks, index funds and stocks with a higher risk but a better return.
6. While investing, investors should consider the tax policy.
7. Smart portfolio management can deal significant nest egg for retirement.

THANK YOU