A STUDY ON PORTFOLIO MANAGEMENT

A Project Submitted to

University of Mumbai for partial completion of the degree of

Bachelor in Commerce (Accounting and Finance)

Under the Faculty of Commerce

By

POOJA SURESH GUPTA

Roll No. 15

Under the Guidance of

Prof. KAVITA JUIKAR

D.T.S.S. College of Commerce

Kurar Village, Malad (East)
Mumbai 400097
2019-2020
 Declaration by learner

I the undersigned Miss POOJA SURESH GUTA hereby, declare that the work
embodied in this project work titled “A STUDY ON PORTFOLO MANAGEMENT”

forms my own contribution to the research work carried out under the guidance of

Prof. KAVITA JUIKAR is a result of my own research work and has not been
previously submitted to any other Degree/ Diploma to this or any other University.

Wherever reference has been made to previous works of others, it has been clearly
indicated as such and included in the bibliography.

I, here by further declare that all information of this document has been obtained and
presented in accordance with academic rules and ethical conduct.

Name and Signature of the learner

POOJA SURESH GUPTA

Certified by

Name and signature of the Guiding Teacher

(Prof. KAVITA JUIKAR).

 Acknowledgment

To list who all have helped me is difficult because they are so numerous and the depth
is so enormous.

I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do
this project.

I would like to thank my Principal, Dr. Sussmita Daxini, for providing the necessary
facilities required for completion of this project.

I take this opportunity to thank our Coordinator Mr. Kanduri Nagraju for her moral
support and guidance.

I would also like to express my sincere gratitude towards my project guide

Prof. Kavita Juikar whose guidance and care made the project successful.

I would like to thank my College Library, for having provided various reference books
and magazines related to my project.

Lastly, I would like to thank each and every person who directly or indirectly helped
me in the completion of the project especially my Parents and Peers who supported
me throughout my project.
 Table of Contents

Serial No Particulars Page No

1 Declaration 2
2 Certificate --
3 Acknowledgement 3
4 Table of Content 4
5 Index 5
6 List of Tables 7
7 List of Graph / Diagram/ Chart 8
8 Chapter 1 Introduction 9-34
9 Chapter 2 Literature Review 35-37
10 Chapter 3 Research Methodology 38-41
11 Chapter 4 Data Analysis & Interpretation 42-60
Chapter 5 Finding, Conclusion and
12 Suggestions, 61-64
Bibliography 65
Annexure 66-68

Appendix - Questionnaire 66
 Index

Chapter Page
No Particulars
No.
1 Introduction 9-34
1.1 Introduction to the Topic 9
1.2 Evolution of portfolio management 12
1.2.1The origin of portfolio theory 12
1.3 Portfolio management process 12
1.3.1 Portfolio management process 13
1.3.2 Steps in portfolio management process 13
1.4 Phases of portfolio management 14
1.5 Objectives of portfolio management 16
1.6 Basic principle of portfolio management 18
1.7 Factors affecting investment decisions in portfolio
19
management
1.8 Advantages of portfolio management 20
1.9 Disadvantages of portfolio management 22

1.10 Need and importance of portfolio management 23

1.11 Portfolio manager 24
1.11.1 role of a portfolio manager 26
1.12 Types of portfolio management 27
1.13 Portfolio risk 28
1.13.1 types of portfolio risks 29

1.13.2 types of portfolio risk management 30

1.14 Portfolio management models 32
2 Literature Review 35-37

5
 2.1 Introduction 35
2.2 Published Research Paper / Articles 35
3 Research Methodology 38-41
3.1 Introduction 38
3.2 Objectives of the study 38
3.3 Selection of the problem 38
3.4 Research Methodology 38
3.4.1 Area of Research 39
3.4.2 Research Design 39
3.4.3 Sampling Method 39
3.4.4 Sample Size 39
3.4.5 Methods of data collection 40
3.4.6 Techniques of Data analysis 40
3.4.7 Research Tool 40
3.5 Scope and Significance of the Study 40
3.6 Limitation of the study 41
4 Data Analysis , Interpretation and presentation 42-60
5 Findings, Conclusion and Suggestion 61-64
5.1 Findings & Conclusion 61
5.2 Suggestions 64

6
 List of Tables

Table No. Particulars Page No.

4.1 Age of Respondents 42
Gender of Respondents
4.2 43
4.3 Occupation of Respondents 44
4.4 Income of Respondents 45
Percentage of Respondents know about Portfolio
4.5 Management 46
4.6 Financial Assets of Indian Households(2012-2018) 47
4.7 Percentage of Respondents investing in Portfolios 48
Percentage of Respondents prefer to invest in portfolio
4.8
securities 49
Percentage of Respondents know about portfolio
4.9
management 50
Percentage of Types of Portfolio Management
4.10
respondents know 51
Percentages of Respondents know about Portfolio
4.11 Manager 52
4.12 Respondents know about Portfolio Management Models 53
4.13 Reason for which respondent invest in Portfolios 54
4.14 The security from which respondent gets higher return 55
4.15 Respondent bear high risk in security 57
4.16 Respondent know about the benefit of portfolio 58
4.17 Reason for which respondents invest in portfolios 59

7
 List of Graphs /Diagrams / Charts

Diagram/
Particulars Page No.
Chart No.
1.5 Objectives of Portfolio Management 17
1.11 Portfolio Manager 25
1.12 Types of Portfolio Management 27
4.1 Age of Respondents 42

4.2 Gender of Respondents 43

4.3 Occupation of Respondents 44

4.4 Income of Respondents 45
Percentage of Respondents know about Portfolio
4.5 46
Management
4.6 Financial Assets of Indian Households(2012-2018) 47
4.7 Percentage of Respondents investing in Portfolios 48
Percentage of Respondents prefer to invest in portfolio
4.8 49
securities

Percentage of Respondents know about portfolio

4.9 50
management

Percentage of Types of Portfolio Management

4.10 51
respondents know
Percentages of Respondents know about Portfolio
4.11 52
Manager
Respondents know about Portfolio Management
4.12 53
Models

4.13 Reason for which respondent invest in Portfolios 54

4.14 The security from which respondent gets higher return 56
4.15 Respondent bear high risk in security 57
4.16 Respondent know about the benefit of portfolio 58
4.17 Reason for which respondents invest in portfolios 59

8
 CHAPTER 1

INTRODUCTION TO PORTFOLIO MANAGEMENT

1.1 INTRODUCTION

Portfolio refers to a combination of various assets in which investors can invest there
money instead of investing it in one single security. Portfolio consists of carefully
blended asset combination within a cohesive framework. Though portfolio consists of
a variety of asset, it is manage as one unit.

Portfolio means combined holding of many kinds of securities like shares, debentures,
government securities, units mutual funds, gold/oil bonds, etc. The securities to be
included in portfolio and their proportion are chosen carefully to achieve objectives of
investment.

Portfolio helps investors to reduce or manage the risk involved in investing funds. It
spreads the risk involved in an investment from one security to a group of different
types of securities. The concept can be understand from the phrase ‘don’t put all your
eggs in one basket’. By investing money in a portfolio of multiple securities instead of
one single security an investor can save himself from the danger of failure of a particular
security to perform as per desired level or even making losses. The loss incurred in one
security can be compensated against profit earned from some other security in the
portfolio.

Portfolio management refers to managing efficiently the investments held in portfolio.

Portfolio Management includes proper selection of securities, constant rebalancing/
reshuffling of securities and portfolio performance evaluation. It is an art and science
if selecting and revising the securities according to changing market situation and
changing objectives of investment, Since market condition change every movement
construction of portfolio is not an end, the constant review of portfolio is equally
important. Thus portfolio management is a dynamic process which involves portfolio
planning, construction, revision and evolution.

Portfolio management means selection of securities and constant shifting of the

portfolio in the light of varying attractiveness of the constituents of the portfolio. It is a
choice of selecting and revising spectrum of securities to it in with the characteristics
9
of an investor. Portfolio management includes portfolio planning, selection and
construction, review and evaluation of securities. The skill in portfolio management lies
in achieving a sound balance between the objectives of safety, liquidity and
profitability. Timing is an important aspect of portfolio revision. Ideally, investors
should sell at market tops and buy at market bottoms. Investors may switch from bonds
to share in a bullish market and vice-versa in a bearish market. 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 for risk. Portfolio
management is an art and science of making decisions about investment mix and policy,
matching investments to objectives, asset allocation for individuals and institutions, and
balancing risk against performance. Portfolio management in common parlance refers
to the selection of securities and their continuous shifting in the portfolio to optimize
the returns to suit the objectives of the 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 many western countries, portfolio
management service has assumed the role of specialized service now a days and a
number of professional merchant bankers compete aggressively to provide the best to
high net-worth clients, who have little time to manage their investments. The idea is
catching up with the boom in the capital market and an increasing number of people
are inclined to make the profits out of their hard earned savings. Markowitz analyzed
the implications of the fact that the investors, although seeking high expected returns,
generally wish to avoid risk. It is the basis of all scientific portfolio management.
Although the expected return on a portfolio is directly related to the expected returns
on component securities, it is not possible to deduce a portfolio riskiness simply by
knowing the riskiness of individual securities. The riskiness of portfolio depends upon
the attributes of individual securities as well as the interrelationships among securities.
A professional, who manages other people's or institution's investment portfolio with
the object of profitability, growth and risk minimization is known as a portfolio
manager. He is expected to manage the investor's assets prudently and choose particular
investment avenues appropriate for particular times aiming at maximization of profit.
Portfolio management includes portfolio planning, selection and construction, review
and evaluation of securities. The skill in portfolio management lies in achieving a sound
10
balance between the objectives of safety, liquidity and profitability. Timing is an
important aspect of portfolio revision. Ideally, investors should sell at market tops and
buy at market bottoms. They should be guarded against buying at high prices and selling
at low prices. Timing is a crucial factor while switching between shares and bonds.
Investors may switch from bonds to shares in a bullish market and vice-versa in a
bearish market. Portfolio management service is one of the merchant banking activities
recognized by Securities and Exchange Board of India (SEBI). The portfolio
management service can be rendered either by the SEBI recognized categories I and II
merchant bankers or portfolio managers or discretionary portfolio manager as defined
in clause (e) and (f) of rule 2 SEBI (portfolio managers) Rules 1993. According to the
definitions as contained in the above clauses, a portfolio manager means any person
who pursuant to contract or arrangement with a client, advises or directs of 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 or investment helps investors
in effective and efficient management of their investment to achieve their financial
goals. 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 investors should be able to effectively and efficiently manage
investments in order to keep maximum returns with minimum risk. A portfolio manager
by virtue of his knowledge, background and experience is expected to study the various
avenues available for profitable investment and advise his client to enable the latter to
maximize the return on his investment and at the same time safeguard the funds
invested.

Portfolio manager is a professional who manages portfolio of other persons for certain
fee. He seeks to improve return on investor’s portfolio but at the same time he also has
reduce the risk. The skill in constructing optimum portfolios in balancing risk and

11
return, Modern portfolio theory is based in scientific approach and it seeks to estimate
risk and return though an analysis and screening of individual security and its behaviors
as compared to other securities in the portfolio.

1.2 EVOLUTION OF PORTFOLIO MANAGEMENT

The meaning of portfolio management explained above, today any educated investor is
very familiar with term ‘Portfolio’. However, this was not the case in early 20th century,
it is very surprising that something as basic as an investment portfolio didn’t exist until
the late 1960s. Today the idea of investment portfolios has become so obvious that the
world of investment is incomplete without it.

1.2.1 THE ORIGIN OF PORTFOLIO THEORY

Investors had ‘Portfolios’ before evolution of modern portfolio theory (MPT) in 1950s.
However investors has different perception of the portfolio and portfolio construction,
In 1938, John Burr Williams wrote a book titled “The Theory of Investment Value” he
focused on stocks paying high dividends and argued that stocks are valued based on
present value of all expected future dividends and not earnings, This led to most
investors to find a good stock paying high dividends and buy it at the best price.

Investing meant placing bets on stocks that investors thought were at their best price.
Information was still coming in slowly during this period and stock prices didn’t paint
the full picture about the company. The general public perception about the stock
markets was synonyms to gambling that it is meant fir wealthy or flamboyant
individuals betting on race horses.

In such wild markets, professional managers like Benjamin Graham tasted huge success
by first getting accurate information and then by analyzing it correctly to make
investment decisions. They were the pioneers in focusing on company’s fundamentals
and buy stocks available at cheaper prices to make profits.

1.3 PORTFOLIO MANAGEMENT PROCESS

Portfolio management process is a dynamic way of managing assets in a client’s

portfolio. Every client has unique of objectives which are ever changing, with the help
12
of various components and subcomponents of Portfolio management. A portfolio
manager ensures that such objectives are met well within client’s constraints. A
portfolio manager should always keep a proper balance between risk and returns while
trying to achieve such objectives.

1.3.1 DEFINITION OF PORTFOLIO MANAGEMENT PROCESS

The portfolio management process is an integrated compilation of steps implanted in a

consistent way to create and manage a suitable portfolio of assets to achieve client’s
specified goals.

1.3.2 STEPS IN PORTFOLIO MANAGEMENT PROCESS

The portfolio management process has the following steps and the sub-components:

1. Planning: This is the most important step; it is the foundation in which entire
portfolio management process built. It comprises of these tasks;
a) Identification of Objectives and Constraints: This task involves assessing
client’s return expectations along with his risk appetite. Client needs to be
updated here the type of returns he can expect keeping in mind their risk taking
anility. Here earning required returns become objectives and risk taking ability
becomes constraints.
b) Investment Policy Statement: Once the objectives and constraints are
identified, the next tasks is to draft an investment policy statement.
c) Asset Allocation Strategy: This is the last task in the planning stage.
i) Strategic Asset Allocation: A long term investment strategy is drawn
keeping is mind Investment policy statement and capital market expectation
such allocation is also referred as strategic asset allocation.
ii) Tactical Asset Allocation: Any short-term change in the portfolio strategy
as a result of the change in circumstances of the investor or the market
expectations is a tactical asset allocation. If the changes becomes permanent
and the policy statement is updated to reflect the changes, there is a chance
that the temporary tactical allocation becomes the new strategic portfolio
allocation.
2. Execution: After planning stage, execution of the plan is the next stage. This
consists of these decisions:
13
 a. Portfolio Selection: Here, specific assets are chosen for the client
keeping in mind capital market expectations and asset allocation
strategy. Generally, the portfolio managers use the portfolio managers
use the portfolio optimization technique while deciding the portfolio
composition.
b. Portfolio Implementation: Once the composition of portfolio is
finalized, the portfolio is executed. Here, transaction cost should be kept
in check as higher cost may lead to lower portfolio returns. Transaction
costs include both explicit costs like taxes, fees, commissions, etc. and
implicit cost like opportunity costs, etc. Hence, the execution of the
portfolio needs to be appropriately timed and well-managed.
3. Feedback: Regular feedback of client should be taken to understand changing
needs of clients. Following two activities are undertaken with the help of regular
client feedback.
a. Monitoring and Rebalancing: The portfolio manager needs to monitor
and evaluate risk exposures of the portfolio and compares it with the
objectives and constraints are being achieved. The manager monitors the
investor’s circumstances, economic fundamentals and market
conditions Portfolio rebalancing should also consider taxes and
transaction cost.
b. Performance Evaluation: The investment performance of the portfolio
must be evaluated regularly to measure the achievement of objectives
and the skill of the portfolio manager. Both absolute returns and relative
returns cab be used as a measure of performance while analyzing the
performance of the portfolio.

1.4 PHASES OF PORTFOLIO MANAGEMENT

Portfolio Management consists of many activities with a single goal of optimizing the
investment of client’s funds. There are five phases in the portfolio management forming
integral part of the Portfolio Management. The success of portfolio management
depends on the Portfolio Management. The success of portfolio management depends
on the effectiveness in implementing these phases.

14
1. Security Analysis: Capital and money markets offer varied type of securities
some traditional ones include equity shares, preference shares, debentures and
bonds, floating rate bonds, flexi bonds, zero coupon bonds, global depository
receipts, etc. are examples if recently developed securities. During this phase if
portfolio management every individual security is evaluated for risk and returns
it offers. A basic approach for investing in securities would be to sell the
overpriced securities and purchase underpriced securities. The security analysis
comprises of Fundamental Analysis and technical Analysis which will be
discussed in detail in chapters to follow.
2. Portfolio Analysis : As mentioned earlier a portfolio is a group of securities
that are kept together as an investment, Investors make investment in various
securities to diversify away their risk this is especially true for risk averse
investors. An investor can create multiple portfolios using the set of securities
obtained from initial phase of security analysis. By selecting the different sets
if securities and varying the amount of investments in each security, various
portfolios are designed. After identifying the range if possible portfolios, risk-
return characteristics of each portfolio is measured and expressed quantitatively.
3. Portfolio Selection: From various portfolios determined above a portfolio is
selected in the basis of input calculated. The main target if the portfolio selection
is to build a portfolio that offer highest returns at a given risk. Suck portfolio is
also called as efficient portfolios. The set of efficient portfolios is formed and
from this set of efficient portfolios, the optimal portfolio is chosen for
investment. The optimal portfolio is determined in an objectives and disciplined
way by using the analytical tools and conceptual framework provided by
Markowitz’s portfolio theory,
4. Portfolio Revision: After selecting the optimal portfolio, investor is required to
monitor it constantly to endure that the portfolio remains optimal with passage
of time. Due to dynamic changes in the economy and financial market, the
attractive securities may cease to provide profitable returns. These market
changes result in new securities that promises high returns at low risks. Such a
strategy is known as Active revision strategy. As against this, passive revision
strategy involves only minor & infrequent adjustments to the portfolio over
time. Investor needs to do portfolio revision by buying new securities and
15
 selling the existing securities As a result of portfolio revision, the mix and
proportion of securities in the portfolio changes.
5. Portfolio Evolution: This phase involves the regular analysis and assessment
if portfolio performances in terms of risk and returns over a period of time.
During this phase, the returns are measured quantitatively along with risk born
over a period of time by a portfolio, the performance of the portfolio is
compared with the objective norms. Moreover, this procedure assists in
identifying the weaknesses in the investment processes.

1.5 OBJECTIVE OF PORTFOLIO MANAGEMENT

The major objectives of portfolio management are:

1. Maximizing returns: Portfolio should be such that the returns are improved
as compared to individual securities in it. Every portfolio manager aims to
generate maximum profit/returns on his portfolio. Returns can be in the form
of current income or capital gains.
2. Minimizing portfolio risk: Portfolio should be such that the overall risk
involved in the portfolio is minimized as compare to individual securities of
the portfolio. This objective can usually be achieved through scientific
diversification of available funds in multiple securities rather than investing
money only in single or very securities.
3. Liquidity: Portfolio manager should keep certain proportion of the total
funds available in such securities that are easily convertible into cash. This
will help him to acquire new and portfolio or reduce the total risk involved

16
 or to achieve both the targets of improving returns and reducing also helps
the investor to get cash easily in case of urgent need for the same.

Diagram 1.5 Objectives of Portfolio Management

4. Tax benefits: Portfolio managers should consider tax benefits which can be
availed, for e.g. investment in shares of Indian companies will yield
dividends that free in the hands of investor, even the capital gains on such
shares will be exempt from tax if they are sold after a specified time period,
as against this dividends on debentures is taxable in the hands of investor,
but there are some other securities like NSC, PPF which provide interest
income that is exempt from income tax in the hands of investor.
5. Stability of Income: So as to facilitate planning more accurately and
systematically the reinvestment consumption of income is important.
17
 6. Capital Growth: This can be attained by reinvesting in growth securities or
through purchase of growth securities. Capital appreciation has become an
important investment principle. Investors seek growth stocks which
provides a very large capital appreciation by way of rights, bonus and
appreciation in the market price of a share.
7. Marketability: It is the case with which a security can be bought or sold.
This is essential for providing flexibility to investment portfolio.
8. 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.
9. Security/Safety of Principal: Security not only involves keeping the
principal sum intact but also keeping intact its purchasing power intact.
Safety means protection for investment against loss under reasonably
variations. In order to provide safety, a careful review of economic and
industry trends is necessary. In other words, errors in portfolio are
unavoidable and it requires extensive diversification. Even investor wants
that his basic amount of investment should remain safe.
10. Other objective: Investors may demand some special features for e.g. an
old couple may have high priority monthly/ regular income in form of
retirement benefit to take care of their day to day living needs. As against
this a young couple earning high salaries may look for capital gains from
there portfolio instead of regular income, this because they may want to
utilize all or major part of the portfolio in one go for their child’s higher
education after certain years.

1.6 BASIC PRINCIPLE OF PORTFOLIO MANAGEMENT

Portfolio management is based on certain basic principles:

1. Portfolio matters far more than the individual security: Individual securities
in a portfolio are important only to the extent that they affect the aggregate
portfolio, For example a security’s risk should not be based on the uncertainty
of its return but, instead, on its contribution to the uncertainty of its return but
instead, on its contribution to the uncertainty of the total portfolio’s return.

18
 Moreover, other aspects such as investor’s career or home should be considered
together with the security portfolio. In short, a; decisions should focus on the
impact of a particular decision on the aggregate portfolio of all assets held.
2. Larger expected portfolio returns come only with larger portfolio risk: The
most important portfolio decision is the acceptable degree of risk to an investor,
which is determined by the asset allocation within the security portfolio. This is
not an easy decision, since it requires that we have since idea of the risks and
expected returns available in many different classes of assets. Nonetheless, the
risk/return level of the aggregate portfolio should be the first decisions any
investor makes.
3. Diversification Works: Diversification across various securities will reduce a
portfolio's risk. This is because in a diversified portfolio loss of one company
may be compensated by profit of another company this will reduce the overall
risk of the portfolio as compared a single security.
4. Each portfolio should be tailored as per the needs and requirements of it's
the investors: People have varying tax rates, knowledge transaction costs, etc.
One single strategy for portfolio construction will not work for all individuals.
Individuals who are in a high marginal tax bracket should stress portfolio
strategies which increase after tax return Individuals who lack strong knowledge
of investment alternatives should hire professionals to provide needed
counselling Young professional with les family responsibilities can take higher
risk, therefore they can select relatively risky security to increase his/her returns
as compared to married couple having children and old parents to take care of.

1.7 FACTORS AFFECTING INVESTMENT DECISIONS IN PORTFOLIO

MANAGEMENT

1. Return: Investment is done for earning returns from the same It is the
reward the investor deserves for foregoing current consumption in exchange
for future consumption Returns are earned in two forms viz. (a) Current
income (dividends, interest) & (b) a capital gains or appreciation in the value
of investment.

19
 2. Risk: Risk is a chance of loss due to variability in expected returns. Even
investment carries certain degree of risk which varies depending upon type
of investment. Returns and risk in an investment go hand-in-hand. Risk may
arise due to loss in current income or in form of capital losses. Risk can be
quantified using various statistical measures like Range. Variance
Deviation, etc. these measures are discussed in detail later on in this book.
3. Time: It is an important factor in any investment Returns are dynamic in
nature and keep on varying with changing time and scenario, therefore
investors need to keep on evaluating there investments as the time changes.
Time also plays an important role in selecting the type of investment. An
investor having short term investment objective may select a less profitable
short term investment against a long term high profit investment.

1.8 ADVANTAGES OF PORTFOLIO MANAGEMENT

Portfolio management helps an inventor in more ways than one some of which are
discussed below:

1. Correct Investment Choices: Often, investors accumulate assets or make

investments in an ad hoc or haphazard manner. A portfolio gives you a holistic
view of all assets of an investor and enables him to see the gaps in his investment
plan as against his financial goals. Portfolio management allows him to take
more informed decisions about the kind of investments he should make. For
example, he may have an over-exposure to equities which increases his risk.
2. Track Performance: Consolidating all his investments into one portfolio
enables an investor to track the performance of assets and compare them easily
investment is not performing as planned, the investor can sell it and reinvest the
funds in a more profitable investment. Also, portfolio management helps to
readjust funds based on life goals. For example, for a long-term goal of his
child's education, he can invest in equities and capitalize on their superior return.
As he comes closer to his goal, he can switch to safer debt instruments so that
he doesn't incur any losses.

20
3. Disciplined and Regular Investment: The goal of portfolio management is to
maximize return. On investment technique multiply your earnings is to invest
often. For example, if an investor has a small amount he wants to invest every
month, he can start a systematic investment plan (SIP) in a mutual fund. That
way, the investor will invest a dedicated amount every month. This disciplined
investment will help to grow his funds faster.
4. Manage Liquidity: Nobody can predict when the need for funds will arise.
Proper portfolio management can help plan investments in such a way that some
can be easily sold off in case of urgent need funds. For example, some money
can be invested in liquid funds, which can be sold off in a medical emergency.
5. Risk Reward Tradeoff: Not all assets are made equally. Some are riskier but
can be more rewarding (equities). Some are safe but illiquid (PPF). Others are
safe and liquid but deliver lower returns (liquid mutual funds). Portfolio
Management enables to strike balance between various investments depending
on your needs.
6. Evolve with Changing Needs: When an investor manages his portfolio
actively, he can ensure to stay true to his goal. For example, if an investor invests
his funds with 60% in equity and debt in a couple of years, equity does very
well. It's quite possible that in such a scenario, equity may comprise 70% of
your portfolio - which means he must readjust it to bring them back to your
original 60-40 ratio.
7. Improved Financial Understanding: One of the benefits of managing your
portfolio of investments actively is that the investor learns how financial
markets work. Even if someone else manages portfolio, just dealing with
professional can improve client's Knowledge about different investments and
their interactions.
8. Helps in avoiding disasters: Portfolio management helps an investor in
avoiding disastrous outcomes that arise from otherwise investing in a single
security. This can very well be illustrated by looking at an example. In the 1990s
Enron was one of the most respected companies in the USA. Suppose an
investor had USD 1000 to invest and bought 11 shares of Enron in August 2000
at USD 90.75 per share. Total investment is USD 998.25. In December 2001
the value of that investment of USD 998.25 would be USD 2.86 as the share
21
 price of Enron had fallen from USD 90.75 each to USD 0.26. The investor
directly went from a 1000 dollars to 3 dollars. This is disastrous, now imagine
had the investment been 10,000 dollars or 100,000 dollars? This helps us
understand the magnitude of the disaster. To avoid such disasters, investors
should never invest in only one security but should diversify portfolios.
9. Optimal allocation of funds: Any investor has limited funds to invest and
would like to maximize the returns on his investment. Portfolio management
aides in maximizing these returns. A haphazard investment methodology –
buying a few stocks here, some bonds there, some gold somewhere, is actually
not a good investor behavior. Portfolio management theory gives investors a
proper framework & many different calculation models to exactly decide how
much returns they want, and how to get it. This structured approach makes it
easy to allocate the limited funds availability & put it to optimum use.

1.9 DISADVANTAGES OF PORTFOLIO MANAGEMENT

1. Too Complicated: Many investors include so many assets in their portfolio

they don’t really understand what’s in them. Diversification in investing is
important, but keep your portfolio simple enough that you can stay on top of
your investments.
2. Indexing: If a portfolio manager have too many assets in his portfolio it
essentially becomes an index fund. If he want an index fund, buy an index fund;
don’t waste transaction fees on purchasing numerous assets that morph into an
index fund. The more stocks he own the more correlated his portfolio will be to
market returns. While passive management or indexing might work in bull
markets it does not work well in flat or bear markets. Most indices are skewed
toward stocks that have already risen and underweight stocks that have fallen,
and may be at bargain prices.
3. Market Risk: Before buy an index fund be sure you understand the
mathematics of how portfolio volatility lowers your portfolio performance. Few
investors ever achieve even close to “average” returns because of volatility
caused by market risk.

22
 4. Below Average Returns: Indexing and over diversification are
disadvantages of diversification because quality suffers when you own
inferior investments along with good investments. Below average
returns result from transaction fees or high mutual fund fees. In
addition to portfolio volatility lowering returns, many investors let their
emotions cause them to buy high and sell low.
5. Lack of Focus our Attention to Your Portfolio: If someone else is
managing your portfolio you probably don’t pay as much attention to it,
or you wait until it’s too late (i.e. after your quarterly statement arrives).

1.10 NEED AND IMPORTANCE OF PORTFOLI MANAGEMENT

Portfolio management is a process encompassing many activities of investment in

assets and securities. It is a dynamic and flexible concept and involves regular and
systematic analysis, judgment and action. The objective of this service is to help the
unknown and investors with the expertise of professionals in investment portfolio
management. It involves construction of a portfolio based upon the investor’s
objectives, constraints, preferences for risk and returns and tax liability. The portfolio
is reviewed and adjusted from time to time in tune with the market conditions. The
evaluation of portfolio is to be done in terms of targets set for risk and returns. The
changes in the portfolio are to be effected to meet the changing condition. Portfolio
construction refers to the allocation of surplus funds in hand among a variety of
financial assets open for investment. Portfolio theory concerns itself with the principles
governing such allocation. The modern view of investment is oriented more go towards
the assembly of proper combination of individual securities to form investment
portfolio. A combination of securities held together will give a beneficial result if they
grouped in a manner to secure higher returns after taking into consideration the risk
elements. The modern theory is the view that by diversification risk can be reduced.
Diversification can be made by the investor either by having a large number of shares
of companies in different regions, in different industries or those producing different
types of product lines. Modern theory believes in the perspective of combination of
securities under constraints of risk and returns.

23
1.11 PORTFOLIO MANAGER

Portfolio manager is a professional who manages portfolio of other persons for certain
fee. He seeks to improve return on investor’s portfolio but at the same time he also has
reduce the risk. The skill in constructing optimum portfolios in balancing risk and
return, Modern portfolio theory is based in scientific approach and it seeks to estimate
risk and return though an analysis and screening of individual security and its behaviors
as compared to other securities in the portfolio. A portfolio manager is a person who
makes investment decisions using money other people have placed under his or her
control. In other words, it is a financial career involved in investment management.
They work with a team of analysts and researchers, and are ultimately responsible for
establishing an investment strategy, selecting appropriate investments and allocating
each investment properly for a fund- or asset-management vehicle. Portfolio managers
are presented with investment ideas from internal buy side analysts and sell-side
analysts from investment banks. It is their job to sift through the relevant information
and use their judgment to buy and sell securities. Throughout each day, they read
reports, talk to company managers and monitor industry and economic trends looking
for the right company and time to invest the portfolio's capital. A team of analysts and
researchers are ultimately responsible for establishing an investment strategy, selecting
appropriate investments and allocating each investment properly for a fund or asset-
management vehicle. Portfolio managers make decisions about investment mix and
policy, matching investments to objectives, asset allocation for individuals and
institutions, and balancing risk against performance. A professional, who manages
other people's or institution's investment portfolio with the object of profitability,
growth and risk minimization, is known as a portfolio manager. They are expected to
manage the investor's assets prudently and choose particular investment avenues
appropriate for particular times aiming at maximization of profit.

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1.11.1 ROLE OF A PORTFOLIO MANAGER

Diagram 1.11 Portfolio Manager

A portfolio manager is an individual or group of individuals who help investors invest

in the best available investment plans for better returns in the future.

1. Understanding the Client: A Portfolio manager plays an important role in

deciding the best investment plan for an individual based on his income, age as
well as his risk appetite Investment is essential for every earning individual, but
not every individual may have same goals or ability to take same level of risk.
Accordingly a good portfolio manager cannot apply a common investment
strategy to every client.
2. Assist Client in Investment Decision: A portfolio manager is responsible for
making an individual aware of the various investment tools available in the
market and benefits associated with each plan Make him realize why he actually
need to invest and which plan would be the best for him.
3. Develop Customized Solution: A portfolio manager is responsible for
designing customized investment Solutions for the clients. No two individuals
can have the same financial needs. Portfolio manager is responsible to
recommend customized investment solutions to the client to fulfill such
financial needs.

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4. Always be Up-to-date: The world of investment is ever changing, a portfolio
manager must keep himself updated with the latest changes in the financial
market. Suggest the best plan for your client with minimum risks involved and
maximum returns. Make him understand the investment plans and the risks
involved with each plan in the most understandable language.
5. Maintain Transparency: A portfolio manager must be transparent with his
clients. Read out the terms and conditions and never hide anything from any of
your clients. Be honest to the client for a long term relationship.
6. Unbiased and Professional: A portfolio manager should be unbiased and a
thorough professional. He should put client's interest before his commission or
earnings. It is his responsibility to guide his client and help him choose the best
investment plan. He must design tailor made investment solutions for
individuals which guarantee maximum returns and benefits within a stipulated
time frame. It is the portfolio manager’s duty to set the individual where to
invest and where not to invest, keep a check on the market fluctuations and
guide the individual accordingly.
7. Prompt Action: A portfolio manager needs to be a good decision maker. He
should be prompt enough to finalize the best financial plan for an individual and
invest on his behalf.
8. Communicate with Client: The portfolio manager should communicate with
his client on regular basis. A portfolio manager plays a major role in setting
financial goals for an individual therefore he should be accessible to his clients.
9. Communicate with Client: The portfolio manager should communicate with
his client on regular basis A portfolio manager plays a major role in setting
financial goals for an individual therefore he should be accessible to his clients.
10. Patience: portfolio manager should be patient with his clients. He might need
to meet them twice or even thrice to explain them all the investment plans,
benefits, maturity period, terms and conditions, risks involved and so on.

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1.12 TYPES OF PORTFOLIO MANAGEMENT

Diagram 1.12 Types of Portfolio Management

1. Active Portfolio Management: The aim of the active portfolio manager

is to make better returns than what the market dictates. Those who follow
this method of investing are usually contrarian in their approach. Active
managers buy stocks when they are undervalued and start selling when
they climb above the norm. Active portfolio management involves the
quantitative analysis of companies to determine the cost of stock in
relation to its potential. To do this, the active manager shuns the efficient
market hypothesis and instead relies on ratios to support his claim. To
downsize risk, the active manager prefers to diversify investments
amongst the various sectors. The issue with active portfolio management
is that it all comes down to the manager's skill. But should you find one
with the necessary know how, the value investing method will likely bring
in good gains.
2. Passive Portfolio Management: At the opposite end of active
management comes the passive investing strategy. Those who subscribe
to this theory believe in the efficient market hypothesis. The claim is that
the fundamentals of a company will always be reflected in the price of the
stock. Therefore, the passive manager prefers to dabble in index funds
which have a low turnover, but good long-term worth. With index funds,
27
 your cash is invested percentage-wise in proportion to the market
capitalization. What this means is that if a company represented 2% of the
500 Index, then Rs. 2 would be invested into the company for every Rs.100
put into the 500 fund. The point of opting for the lower yield is to combat
the cost of management fees, while profiting through stability.
3. Discretionary Portfolio Management: A discretionary manager is given
full leeway to make decisions for the investor. While the individual goals
and time-frame are taken into account, the manager adopts whichever
strategy he thinks best. Once the cash has been handed to the professional,
the investor sits back and trusts that the profits will roll in.
4. Non-Discretionary Portfolio Management: The non-discretionary
manager is simply a financial counselor. He advises the investor in which
routes are best to take. While the pros and cons are clearly outlined, it is
up to the investor to choose his own path. Only once the manager has been
given the go ahead, does he make a move on the investor's behalf. Whether
you decide to use a portfolio manager or you choose to take on the role
yourself, it is important to opt for a viable strategy and ensure that it is put
forward in a logical way. The merit of maintaining a sensible portfolio is
that it cuts down the confusion while providing investments that fit the
individual's goals.

1.13 PORTFOLIO RISK

Portfolio risk is a chance that the combination of assets or units, within the investments
that you own, fail to meet financial objectives. Each investment within a portfolio
carries its own risk, with higher potential return typically meaning higher risk.

In theory, portfolio risk can be eliminated by successful diversification: holding

combinations of investments that do not depend on the same circumstances to return a
profit. In reality, though, it is more probable that risks will be minimized and not
eliminated entirely. Portfolio risk is just one of the risks that traders should be wary of.

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1.13.1 TYPES OF PORTFOLIO RISKS

Investors face several forms of risk to their investment portfolios. These risks are the
uncertainty that a portfolio can earn its expected rate of return. Risk can and will affect
all asset classes within a portfolio (i.e. stocks, bonds, real estate, commodities). The
causes of risk are varied.

1. Market risk: First is market risk. Market risk is the possibility that a portfolio
will be affected by the overall activity of the market as a whole. For example,
the financial crisis of 2008-2009 resulted in the market values (stock prices) of
even profitable businesses decreasing significantly.
2. Business risk: Business risk is another threat to an investor's
holdings. Business risk is when a particular business' management may be
incompetent or product and/or service becomes obsolete. As a result, they go
out of business.
3. Sovereign risk: Next is sovereign risk. Sovereign risk is associated with
changes in the environment that businesses operate in. These can be changes in
regulations, or laws or in extreme example a complete change (many times
violent) in the government. Any of the above can have an impact on business
and by extension those that invest in those businesses. In extreme situations
such as when a government nationalizes a particular industry (i.e. oil), investors'
investments can be made worthless.
4. Liquidity risk: Liquidity risk is the ability of an investor to convert their
investment(s) into cash when necessary. In short, it is the risk that when an
investor is ready to sell there is no one willing to buy.
5. Interest rate risk: Interest rate risk is the result of central banks such as the US
Federal Reserve attempting to manage their country's economy. Through
various mechanisms central banks can provide or reduce the amount of money
in an economy. These efforts generally cause interest rates to move up and
down. Changes in interest rates affect the value of income generating assets
such as bonds, CDs, real estate and the stock market.

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 6. Inflation risk: Next, as most of investors have a long-term time horizon, there
is inflation risk. Inflation risk is when the purchasing power of an investment
can be significantly reduced. Fixed income assets such as bonds are more
susceptible to inflation risk than stocks are.
7. Duration risk: The last form of risk is duration (time until maturity)
risk. Duration risk is associated with fixed income producing investments, such
as bonds. Because bonds prices have an inverse relationship with their yield,
meaning as the price of a bond goes up its yield goes down. The longer the
duration of a bond the greater its yield and a result these longer duration bonds
have a greater sensitivity to price movements.

1.13.2 TYPES OF PORTFOLIO RISK MANAGEMENT

1. Establish a Probable Maximum Loss Plan: A probable maximum loss plan
is the first step in avoiding losing a large chunk of your portfolio. Bear markets
can destroy portfolios for years to come. Many investors just give up and avoid
equities after their portfolio is decimated. If you have a probable maximum loss
plan it may cause you to invest more conservatively. Hopefully, it will cause
you to take only risks that are prudent and fit into your long term plan. This
means valuation should be a major consideration in your asset allocation. It does
not make sense to have a fixed asset allocation with no regard for the valuation
of the asset. An adaptive asset allocation should be used for portfolio risk
management.
2. Implement a Tactical Asset Allocation: Studies show that close to 90% of
investment returns are determined by portfolio asset allocation. Yet most value
oriented guidance focuses on choosing individual investments. Different
valuation levels should require a different investment allocation of your capital.
One of the most important concepts in investing is to be careful or prudent about
the price you pay. It’s not possible to do this without changing your allocation
to asset categories after they make large price swings. The value oriented
investor would want to allocate more to assets that were priced the farthest
below their real or intrinsic value. Assets that are priced above their real worth
can be completely avoided or minimized. We know from history that when
30
 valuations are high the expected long term (7 – 10 years) rate of return is lower
than average. But when valuations are low the expected long term rate of return
is much higher than average. Consider your investment allocation during the
first decade of this century. Should your portfolio have held the same percentage
of equities when valuations were sky high (i.e. 2000) compared to after they fell
57% in 2008-09? Of course not. We live in the best era in history for investing.
Competition has reduced transaction costs on individual investments and
produced new investment vehicles (i.e. ETFs). This allows investors to move
from overvalued assets to undervalued assets with relative ease. It no longer
makes sense to maintain positions in grossly overvalued assets. A tactical asset
allocation is an effective means to portfolio risk management. During time
periods when investment assets are overvalued an adaptive allocation allows an
investor to increase cash positions. Cash can help protect your portfolio in bear
markets. You cannot buy low and sell high by allocating money to assets that
are expensive. At the same time, having cash available when market valuations
are low provides investors the ability to take advantage of favorable
opportunities. Think about how much better you would do if you bought more
when prices are low and less when prices were unfavorable. Many investors do
just the opposite and wonder why long term returns suffer. You should expect
volatility and take advantage of it. Make it a point to understand how volatility
affects performance. Here is a post that will help you understand why you
MUST control your portfolio losses and reduce your portfolio volatility.
3. Require a Margin of Safety: Require a margin of safety for each individual
investment. Margin of safety is the difference between the fundamental or
intrinsic value and the price of your investment. “Price is what you pay. Value
is what you get.” (Warren Buffett) The larger the margin of safety the less risk
you assume, the greater your potential capital gains, and the higher your income
percentage (i.e. dividend yield). A margin of safety leaves room for judgment
errors, mistakes, or unforeseen adverse conditions. Finding bargains is not
always enough. Ideally we want to find stocks with the characteristics of quality
companies: good management, strong balance sheets, innovation, competitive
advantages, returns to shareholders, earnings stability, and efficient operations.
When a company is deficient in quality we have to 1) analyze the probability of
31
 the deficiency being rectified and adjust the price we are willing to pay by
increasing the required margin of safety. Be certain the company has one or
more sustainable competitive advantages, otherwise your bargain may be a
value trap. Competitive advantages can be key company assets, attributes, or
abilities that are difficult to duplicate. These could include being a low cost
provider, pricing power, powerful brands, strategic asset, barriers to entry,
adapting product line, product differentiation, strong balance sheet, or
outstanding management/employees.
4. Avoid Portfolio Volatility: Portfolio volatility has a large negative effect on
long term returns. If you have a positive return of 50% and a negative return of
50%, the arithmetic average is 0%. But you have actually lost 25%, or one-
quarter, of your portfolio. This means that it’s in your long term interest to lower
the volatility of your investment portfolio. The mathematics of compounding
make it compelling to avoid downside volatility. In a previous post we
established portfolio volatility (see post below) lowers portfolio returns. I
demonstrated how 3 portfolios with the identical arithmetic average returns (i.e.
5%) can provide different portfolio total returns, depending on their volatility.
The more volatile portfolios underperform the less volatile portfolios. You must
comprehend this concept to understand why you need to control portfolio
volatility or suffer the consequences. Two portfolios, with the same average rate
of return can produce dramatically different portfolio values because of
portfolio volatility.

1.14 PORTFOLIO MANAGEMENT MODELS

1. Capital Asset Pricing Model: Capital Asset Pricing Model also abbreviated
as CAPM was proposed by Jack Treynor, William Sharpe, John Lintner and Jan
Mossin.

When an asset needs to be added to an already well diversified portfolio, Capital

Asset Pricing Model is used to calculate the asset’s rate of profit or rate of return
(ROI).

32
 In Capital Asset Pricing Model, the asset responds only to:

 Market risks or non-diversifiable risks often represented by beta

 Expected return of the market
 Expected rate of return of an asset with no risks involved

Non Diversifiable Risks: Risks which are similar to the entire range of assets and
liabilities are called non diversifiable risks.

Where is Capital Asset Pricing Model Used?

Capital Asset Pricing Model is used to determine the price of an individual security
through security market line (SML) and how it is related to systematic risks.

What is Security Market Line?

Security Market Line is nothing but the graphical representation of capital asset
pricing model to determine the rate of return of an asset sensitive to non-
diversifiable risk (Beta).

2. Arbitrage Pricing Theory: Stephen Ross proposed the Arbitrage Pricing

Theory in 1976. Arbitrage Pricing Theory highlights the relationship between
an asset and several similar market risk factors. According to Arbitrage Pricing
Theory, the value of an asset is dependent on macro and company specific
factors.

3. Modern Portfolio Theory: Modern Portfolio Theory was introduced by Harry

Markowitz.

According to Modern Portfolio Theory, while designing a portfolio, the ratio of

each asset must be chosen and combined carefully in a portfolio for maximum
returns and minimum risks.

33
 In Modern Portfolio Theory emphasis is not laid on a single asset in a portfolio,
but how each asset changes in relation to the other asset in the portfolio with
reference to fluctuations in the price.

Modern Portfolio theory proposes that a portfolio manager must carefully

choose various assets while designing a portfolio for maximum guaranteed
returns in the future.

4. Value at Risk Model: Value at Risk Model was proposed to calculate the risk
involved in financial market. Financial markets are characterized by risks and
uncertainty over the returns earned in future on various investment products.
Market conditions can fluctuate anytime giving rise to major crisis. The
potential risk involved and the potential loss in value of a portfolio over a certain
period of time is defined as value at risk model. Value at Risk model is used by
financial experts to estimate the risk involved in any financial portfolio over a
given period of time.

5. Jensen’s Performance Index

Jensen’s Performance Index was proposed by Michael Jensen in 1968.Jensen’s
Performance Index is used to calculate the abnormal return of any financial asset
(bonds, shares, securities) as compared to its expected return in any portfolio.
Also called Jensen’s alpha, investors prefer portfolio with abnormal returns or
positive alpha.

Jensen’s alpha = Portfolio Return – [Risk Free Rate + Portfolio Beta * (Market
Return – Risk Free Rate)

6. Treynor Index: Treynor Index model named after Jack.L Treynor is used to
calculate the excess return earned which could otherwise have been earned in a
portfolio with minimum or no risk factors involved.

Where T-Treynor ratio

34
 CHAPTER 02

REVIEW OF LITERATURE

2.1 Introduction

Portfolio Management is defined as the art and science of making decisions about the
investment mix and policy, matching investments to objectives, asset allocation for
individuals and institutions, and balancing risk against performance. (Source:
Investopedia). Simply put it, someone has given you their hard earned money and you
need to help them increase the capital in the best of diversified ways. This should be in
a way in which the risk-return ratio is aptly maintained considering the profits in mind
and the holding period of investments.

Portfolio management refers to managing an individual’s investments in the form of

bonds, shares, cash, mutual funds etc. so that he earns the maximum profits within the
stipulated time frame. It is the art of managing the money of an individual under the
expert guidance of portfolio managers. It is the detailed SWOT analysis (strengths,
weaknesses, opportunities, and threats) of an investment avenue, which could be in the
form of debt/equity, domestic/international, with the goal of maximizing return at a
given appetite for risk.

2.2 Published Research Paper / Articles

By Adam Hayes (2019)1 in their research paper the researcher has explained
Portfolio management is the act of building and maintaining an appropriate investment
mix for a given risk tolerance. The key factors for any portfolio management strategy
involve asset allocation, diversification, and rebalancing rules. Active portfolio
management seeks to 'beat the market' through identifying undervalued assets, often
through short-term trades and market timing. Passive (indexed) portfolio management
seeks to replicate the broader market while keeping costs and fees to a minimum.

35
Dr.G.Brindha Associate Professor, Dept Of Mba, Bharath University, Chennai –
73, India (Issue 6, 2013)2 : He explained in his research pepper that, Portfolio refers to
combination securities such as shares, debentures…etc. Portfolio Management refers
to diversification of investment with a view to minimizeng the risk and maximizing the
returns. It serves as platform for the investors to diversify their portfolio among various
investment avenues.

According to him the definition of portfolio management is as follows: The art and
science of making decisions about investment mix and policy, matching investments 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 for risk.

Sam Bourgi ( 2019)3 in their research pepper He explained in his that Portfolio
management is the science of decision-making about how to invest our money. The
concept includes strategies and policies for matching investment selection to an
individual’s objectives, risk tolerance, and asset allocation requirements. All portfolio
management strategies seek to balance risk against performance. Whether we are
investing in equities, bonds or some other type of asset, portfolio management is
concerned with determining the strengths and weaknesses of our investment selection
methodology to maximize returns relative to our risk appetite.

Although portfolio management strategies vary, they generally fall under four
categories:

1. Active
2. Passive
3. Discretionary
4. Non-discretionary

Justin Kuepper ( 2019)4 : He studied in his article that There are literally thousands of
different securities available to investors, including stocks, bonds, funds, commodities,
real estate, and other niche assets. The process of matching combinations of these
36
investments to an investor’s investment objectives and constraints is known as portfolio
management.

Portfolio management is a complex process that’s usually done by a financial

professional on behalf of an individual client. Often times, individuals use a financial
advisor to make investment decisions and build a portfolio on their behalf in exchange
for a fee or commission.

Daniel Cross (2020)5: Portfolio management is a combination of science and analysis

and an art form to be able to read markets, predict behavior, and find investment
opportunities that others might have missed. From mathematical models that are used
to analyze investment trends to professional traders who have the required skills to
anticipate market behavior, portfolio management isn’t a one-size-fits-all service.
Before you invest, you’ll want to know what kind of portfolio management style works
best to meet your financial needs. The goal of portfolio management is to maximize
gains, but also minimize risks. It’s a balancing act in order to generate the kind of
returns that investors need without taking on excess risks. This is accomplished through
careful analysis of a portfolio’s asset allocation, diversification, and regularly scheduled
rebalancing in some management styles. Other techniques use a hands-off approach in
order to mimic an index’s performance and volatility.

Gaurav Akrani. (2011)6 In his research paper he stated that 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. Management is the organization and coordination of the
activities of an enterprise in accordance with well-defined policies and in achievement
of its pre-defined objectives. Portfolio Management (PM) guides the investor in a
method of selecting the best available securities that will provide the expected rate of
return for any given degree of risk and also to mitigate (reduce) the risks. It is a strategic
decision which is addressed by the top-level managers.

Edupristine (2016)7 He explained in his research pepper A portfolio can be defined as

different investments tools namely stocks, shares, mutual funds, bonds, cash all
combined together depending specifically on the investor’s income, budget, risk
37
appetite and the holding period. It is formed in such a way that it stabilizes the risk of
nonperformance of different pools of investments.

CHAPTER 03

RESEARCH METHODOLOGY

3.1 INTRODUCTION

Research is not only concerned to the revision of the facts and building up to date
knowledge but discover new facts involved through the process of dynamic changes in
the society Methodology is the systematic, theoretical analysis of the methods applied
to a field of study. It comprises the theoretical analysis of the body of methods and
principles associated with a branch of knowledge. Typically, it encompasses concepts
such as paradigm, theoretical model, phases and quantitative or qualitative techniques.

3.2 OBJECTIVES OF THE STUDY

1. To find out portfolio management concept.

2. To study about Portfolio Management Process.
3. To examine the risk and return.
4. To observe the role of Portfolio Manager.
5. To securities with Portfolio Management.

3.3 SELECTION OF THE PROJECT

The research was selected to know about the Portfolios and Portfolio Management.
From this research I was able to know about Portfolio Manager. To know more about
the models and types of Portfolio Management.

3. 4 RESEARCH METHODOLOGY

The Researcher adopted convenient sampling techniques for the selection of study area.
A sample of 50 respondents was taken well Structured questionnaire was used for
collecting primary data by survey method. The study is designed to gather descriptive
information for conducting study in more practical manner. Therefore the study makes

38
use of quantitative research approach. There are two basic research methods Qualitative
and Quantitative research. Qualitative research provides insight and understanding of
the problem setting In this study Qualitative research was used with a goal of getting
insight into the effect of eliminating and reducing the wastage of material.

The Qualitative research method involving the collection of variety of empirical papers,
literature and knowing personal experience of the users.

Quantitative Research seeks to quantify the data and typically, applies some forms of
statistical analysis. In this research, more emphasis is laid on Quantitative data.

3.4.1 AREA OF RESEARCH

The research data was collected from the area of Mumbai city.

3.4.2 RESEARCH DESIGN

Research design is a framework or blueprint for conducting the marketing research

projects. It explains the procedure necessary for obtaining the information needed to
structure or solve research problem. The present research design was the combine of
tabular and exploratory in addition of some verified and quantified by conclusive
research. The form of conclusive research design adopted for the study.

The Objective of tabular and exploratory research is to explore or search through a

problem or situation with Tabular Presentation to provide insight and understanding
Descriptive studies involve collection of data through structured design and survey
method is followed in order to get the needed information. It is typically based on
representative sample which was used to description and define the behaviour of the
respondents.

3.4.3 SAMPLING METHOD

The researcher adopted convenient sampling method. In this sampling Questionnaire

was distributed to individual by making forms. To understand the problems a selected
research was done by the researcher based on the knowledge and personal judgment.

39
3.4.4 SAMPLE SIZE

The sample in the study was restricted to 50 respondents keeping in the mind the
objectives and constraints.

3.4.5 METHODS OF DATA COLLECTION

To fulfil the specific objectives both Primary and Secondary sources were used to
collect the data. Primary data is the core methodology used by the researcher to conduct
the research.

A structured questionnaire was the main tool for collecting the primary data. There was
Primary and secondary data Collection from respondents to understood the problem of
wastage in material.

Relevant and Variable data was collected from various Secondary data for reports,
journals and research papers etc., updated information was gathered from authentic
website.

3.4.6 TECHNIQUES OF DATA ANALYSIS

For the purpose of research the data was analyzed with the help of Bar /Graph/ Pai
Chart.

3.4.7 RESEARCH TOOL

For completion of this project “QUESTIONARIE” was selected as a research tool.

3.5 SCOPE AND SIGNIFICANCE OF THE STUDY

Portfolio management is a process encompassing many activities of investment in

assets and securities. It is a dynamic and flexible concept and involves regular and
systematic analysis, judgment and action. The objective of this service is to help the
unknown and investors with the expertise of professionals in investment portfolio
management. It involves construction of a portfolio based upon the investor’s

40
objectives, constraints, preferences for risk and returns and tax liability. The portfolio
is reviewed and adjusted from time to time in tune with the market conditions. The
evaluation of portfolio is to be done in terms of targets set for risk and returns. The
changes in the portfolio are to be effected to meet the changing condition. Portfolio
construction refers to the allocation of surplus funds in hand among a variety of
financial assets open for investment. Portfolio theory concerns itself with the principles
governing such allocation. The modern view of investment is oriented more go towards
the assembly of proper combination of individual securities to form investment
portfolio. A combination of securities held together will give a beneficial result if they
grouped in a manner to secure higher returns after taking into consideration the risk
elements. The modern theory is the view that by diversification risk can be reduced.
Diversification can be made by the investor either by having a large number of shares
of companies in different regions, in different industries or those producing different
types of product lines. Modern theory believes in the perspective of combination of
securities under constraints of risk and returns.

3.6 LIMITATION OF THE STUDY

The limitation of the study are as follows:

1. Time:

There is limitation of time for the research study, which is only 3 months. It is not
possible to collect the data from respondents for this research within 3 months

2. Respondents Bias:

There are 100 respondents for this research. Some respondent were not given there
accurate response of the question for collecting the data. This became a major
limitation of the study.

3. Area of research:

The area of research was restricted to only Mumbai city, because the limitation of
time which is for three months.

41
 CHAPTER 04
DATA ANALYSIS AND INTERPRETATION
PERSONAL DATA
Q.2 Age
 18-25
 26-35
 36-45
 45 & Above

Particulars Percentage
18-25 54.5
26-35 20.8
36-45 16.8
45 & above 7.9
TOTAL 100

Table 4.1 Age of Respondents

\

8%

17%
18-25
26-35
36-45
54%
45 & above
21%

Chart 4.1 Ages of Respondents

42
From the above Table 4.1 and Chart 4.1 it is observe that out of 100 respondents 54%
people are in 18-25 age group, 21% of people are in 26-35 age group, 17%of people are in
36-45 age group and 8% of people are 45 & above age group.

Q.3 Gender

 Female
 Male

Particulars Percentage
Female 45.5
Male 55.5
Total 100

Table 4.2 Gender of Respondents

45%
FEMALE
MALE
55%

CHART 4.2 Gender of Respondents

There are 100 Respondents. From the above Table 4.2 and Chart 4.2 it is indeed that out
of 100 respondents 45% of people are FEMALE and 55% of people are MALE.

43
Q.4 Occupation:
 Business
 Profession
 Employee
 Other

Particulars Percentage
Business 14.9
Profession 16.8
Employee 36.6
Other 31.7
TOTAL 100

Table 4.3 Occupation of Respondents

15%

32%
· Business
17% · Profession
· Employee
· Other

36%

Chart 4.3 Occupation of Respondents

From the above Table 4.3 and Chart 4.3 it is observe that there are 100 respondents out of
which 15% of people are Businessman, 17% of people are professional, 36% of people are
employees and 15% of people are comes under other occupation.

44
Q.5 Income

 10000-15000
 16000-25000
 26000-35000
 36000 & ABOVE

Particulars Percentage
10000-15000 36.7
16000-25000 26.7
26000-35000 13.3
36000 & Above 23.3
TOTAL 100

Table 4.4 Income of Respondents

23%

37%
· 10000-15000
· 16000-25000
· 26000-35000
13%
· 36000 & ABOVE

27%

Chart 4.4 Income of Residents

It is indeed that there are 100 respondents. From the above Table 4.4 and Chart 4.4 it is
observe that out of 100 respondents 37% of people earn Rupees 10000-15000, 27% of

45
people earn Rupees 16000-25000, 13% of people are in the category of income Rupees
26000-35000 and 23%of people are comes under 36000 & above income group.

Q.6 Respondents know about Portfolio Management

 Yes
 No

Particulars Percentage

YES 88.1

NO 11.9

Total 100

Table 4.5 Percentage of Respondents know about Portfolio Management

12%

YES
NO

88%

Chart 4.5 Percentage of Respondents know about Portfolio Management

There are 100 respondents .From the above Table 4.5 and Chart 4.5 it is observe that out
of 100 respondents 88% of people know about Portfolio Management and remaining 12%
of the respondents don’t know about Portfolio Management.

46
Q.7 Respondents investing in Portfolios
 Yes
 No

Particulars Percentage

YES 67.3

NO 32.7

Total 100

Table 4.6 Percentage of Respondents investing in Portfolios

33%

YES
NO

67%

Chart 4.6 Percentage of Respondents investing in Portfolios

From the above Table 4.6 and Chart 4.6 it is observe that out of 100 respondents 67% of
people are investing in Portfolios and 33% people of respondents are not interested in
investing Portfolios

47
Q.8 Respondents prefer to invest in portfolio securities

 Bank
 Post office
 Shares
 Life Insurance
 Other

Particular Percentage
Bank 33.2
Post office 26
Shares 22.5
Life Insurance 11
Other 7.3
Total 100

Table 4.7 Percentage of Respondents prefer to invest in portfolio securities

7%

11%
33% Bank
Post office
Shares
23% Life Insurance
Other

26%

Chart 4.7 Percentage of Respondents prefer to invest in portfolio securities

48
From the above Table 4.7 and Chart 4.7 it is indeed that out of 100 respondents 33% of
people are prefer to invest in Bank, 26% of people prefer to invest in Post Office, 23% of
people prefer to invest in Shares and 11%of people are prefer to invest in Life Insurance
and remaining 7% of people are prefer to invest in other securities.

Q.9 Respondents know about types of portfolio management

 Yes
 No

Particulars Percentage

YES 74.3

NO 25.7

Total 100

Table 4.8 Percentage of Respondents know about portfolio management

26%

· Yes
· No
74%

Chart 4.8 Percentage of Respondents know about portfolio management

49
From the above Table 4.8 and Chart 4.8 it is observe that out of 100 respondents 74% of
people know about Types of Portfolio Management and 26% people of respondents don’t
know about Types of Portfolio Management.

Q.10 Types of Portfolio Management respondents know

 Active
 Passive
 Discretionary
 Non-Discretionary

Particular Percentage
Active 45.4
Passive 27.8
Discretionary 15.5
Non-Discretionary. 11.3
Total 100

Table 4.9 Percentage of Types of Portfolio Management respondents know

11%

16% · Active
45%
· Passive
· Discretionary
· Non-Discretionary.

28%

Chart 4.9 Percentage of Types of Portfolio Management respondents know

50
There are four types of Portfolio Management i.e. Active, Passive, Discretionary and Non-
Discretionary. From the above Table 4.9 and Chart 4.9 it is observe that out of 100
respondents 45% of people know about Active Portfolio Management, 28% of people
know about Passive Portfolio Management, 16% of people know Discretionary Portfolio
Management and only 11% of people know about Non-Discretionary Portfolio
Management.

Q.11 Percentages of Respondents know about Portfolio Manager

 Yes
 No

Particulars Percentage

YES 57.4

NO 42.6

Total 100

Table 4.10 Percentages of Respondents know about Portfolio Manager

43%
· Yes
· No
57%

Chart 4.10 Percentages of Respondents know about Portfolio Manager

51
There are 100 respondents. From the above Table 4.10 and Chart 4.10 it is indeed that only
57% of people are aware about Portfolio Manager and remaining 43% of people don’t
know about Portfolio Manager who manage Portfolios to get higher returns.

Q.12 The source from which Respondent know about Portfolio Management
 Magazines/News Peppers
 Advertisement
 Social Network
 Other

Particulars Percentage
Magazines/News Peppers 29.3
Advertisement 23.9
Social Network 45.7
Other 1.1
Total 100

Table 4.11 Percentage of Respondent know about Portfolio Management

1%

29%
· Magazines/News Peppers
46%
· Advertisement

· Social Network

24% · Other

Chart 4.11 Percentage of Respondent know about Portfolio Management

52
From the above Table 4.11 and Chart 4.11 it is indeed that out of 100 respondents 29% of
people know about Portfolio Management from the source of Magazines/News Peppers,
24% of people know about Portfolio Management from the source of Advertisements, and
mostly 46% of people from Social Network and only 1% of people know about Portfolio
Management from the other source.

Q.13 The respondents know about Portfolio Management Models

 Capital Assets Pricing Model
 Arbitrage Pricing Theory
 Modern Portfolio Theory
 Other

Particulars Percentage
Capital Assets Pricing Model 54.9
Arbitrage Pricing Theory 10
Modern Portfolio Theory 23.1
Other 12
Total 100

Table 4.12 Respondents know about Portfolio Management Models

12%

· Capital Assets Pricing Model

· Arbitrage Pricing Theory

23%

55% · Modern Portfolio Theory

· Other
10%

Chart 4.12 Respondents know about Portfolio Management Models

53
From the above Table 4.12and Chart 4.12 it is observe that out of 100 respondents 55% of
people know about Capital Assets Pricing Model of Portfolio Management, 10% of people
know about Arbitrage Pricing Theory of Portfolio Management, 23% of people know about
Modern Portfolio Theory of Portfolio Management and only 12% of people know about
other theory of Portfolio Management. 

Q.14 The reason for which respondent invest in Portfolios

 Return
 Risk
 Time
 All

Particulars Percentage
Return 37
Risk 22.2
Time 16.2
All 24.2
Total 100

Table 4.13 Reason for which respondent invest in Portfolios

25%

37% · Return
· Risk
· Time
16% · All

22%

Chart 4.13 Reason for which respondent invest in Portfolios

54
There are 100 respondents. From the above Table 4.13 and Chart 4.13 it is observe that for
getting higher return from portfolios 37% of people invest in portfolios, 22% of people for
bearing risk, 16% of people invest in portfolios because of long term investment, 25% of
people invest in portfolios for all this reasons.

Q.15 The security from which respondent gets higher return

 Bank
 Post office
 Shares
 Life Insurance
 Other

Particular Percentage
Bank 36.1
Post office 27.8
Shares 28.9
Life Insurance 7.2
Other 00
Total 100

Table 4.14 The security from which respondent gets higher return

55
 7%

36% · Bank
29%
· Post office
· Shares
· Life Insurance

28%

Chart 4.14 The security from which respondent gets higher return

From the above Table 4.14 and Chart 4.14 it is observe that out of 100 respondents 36% of
people gets higher returns in Bank, 28% of people gets higher returns in Post Office
securities, 29% of people gets higher returns in Shares and only 7% of people gets return
in Life Insurance securities.

Q.16 Respondent bear high risk in security

 Bank
 Post office
 Shares
 Life Insurance
 Other

56
 Particular Percentage
Bank 30.5
Post office 26.3
Shares 33.7
Life Insurance 9.5
Other 00
Total 100

Table 4.15 Respondent bear high risk in security

10%

30%
· Bank
· Post office
34% · Shares
· Life Insurance

26%

Chart 4.15 Respondent bear high risk in security

From the above Table 4.15 and Chart 4.15 it is observe that out of 100 respondents 30% of
people bear higher risk in Bank, 26% of people bear risk in Post Office securities, 34% of
people bear higher risk in Shares and only 10% of people bear risk in Life Insurance
securities.

57
Q.17 Respondent know about the benefit of portfolio
 Yes
 No
 Maybe

Particulars Percentage

YES 38

NO 22

Maybe 40

Total 100

Table 4.16 Respondent know about the benefit of portfolio

40% 38%
· Yes
· No
· Maybe

22%

Chart 4.16 Respondent know about the benefit of portfolio

From the above Table 4.16 and Chart 4.16 it is observe that there are total 100 respondents.
Out of 100 respondents only 38% of people know the benefits of Portfolios and think that
it is helpful for future, 22% of people don’t know about the benefits of Portfolios and only
40% of people think that portfolios have benefit and it helps in future.

58
Q.18 Reason for which respondents invest in portfolios

 Career
 Marriage
 Children's education
 Retirement
 Other

Particular Percentage
Career 42.6
Marriage 13.8
Children's education 25.5
Retirement 17
Other 1.1
Total 100

Table 4.17 Reason for which respondents invest in portfolios

1%

17%

· Career
43% · Marriage
· Children's education
· Retirement
25%
· Other

14%

Chart 4.17 Reason for which respondents invest in portfolios

59
From the above Table 4.17 and Chart 4.17 it is observe that out of 100 respondents 43% of
people invest in portfolios for the purpose of better career, 14% of people invest in
portfolios for Marriage, 25% of people invest in portfolios for their children’s education
and 17% of people for their Retirement and only 1% of people invest in portfolios for other
reasons.

60
 CHAPTER 05
FINDINGS, CONCLUSION AND SUGGESTION
5.1 FINDINGS AND CONCLUSION
Findings
Analysis 1: From the Table 4.1 and Chart 4.1 it is observe that out of 100 respondents 54%
people are in 18-25 age group, 21% of people are in 26-35 age group, 17%of people are in
36-45 age group and 8% of people are 45 & above age group.

Analysis 2: There are 100 Respondents. From the above Table 4.2 and Chart 4.2 it is indeed
that out of 100 respondents 45% of people are FEMALE and 55% of people are MALE.

Analysis 3: From the Table 4.3 and Chart 4.3 it is observe that there are 100 respondents
out of which 15% of people are Businessman, 17% of people are professional, 36% of
people are employees and 15% of people are comes under other occupation.

Analysis 4: It is indeed that there are 100 respondents. From the Table 4.4 and Chart 4.4
it is observe that out of 100 respondents 37% of people earn Rupees 10000-15000, 27% of
people earn Rupees 16000-25000, 13% of people are in the category of income Rupees
26000-35000 and 23%of people are comes under 36000 & above income group.

Analysis 5: There are 100 respondents .From the Table 4.5 and Chart 4.5 it is observe that
out of 100 respondents 88% of people know about Portfolio Management and remaining
12% of the respondents don’t know about Portfolio Management.

Analysis 6: From the Table 4.6 and Chart 4.6 it is observe that out of 100 respondents 67%
of people are investing in Portfolios and 33% people of respondents are not interested to
invest Portfolios.

Analysis 7: From the Table 4.7 and Chart 4.7 it is indeed that out of 100 respondents 33%
of people are prefer to invest in Bank, 26% of people prefer to invest in Post Office, 23%
of people prefer to invest in Shares and 11%of people are prefer to invest in Life Insurance
and remaining 7% of people are prefer to invest in other securities.

61
Analysis 8: From the Table 4.8 and Chart 4.8 it is observe that out of 100 respondents 74%
of people know about Types of Portfolio Management and 26% people of respondents
don’t know about Types of Portfolio Management.

Analysis 9: There are four types of Portfolio Management i.e. Active, Passive,
Discretionary and Non-Discretionary. From the Table 4.9 and Chart 4.9 it is observe that
out of 100 respondents 45% of people know about Active Portfolio Management, 28% of
people know about Passive Portfolio Management, 16% of people know Discretionary
Portfolio Management and only 11% of people know about Non-Discretionary Portfolio
Management.

Analysis 10: There are 100 respondents. From the above Table 4.10 and Chart 4.10 it is
indeed that only 57% of people are aware about Portfolio Manager and remaining 43% of
people don’t know about Portfolio Manager who manage Portfolios to get higher returns.

Analysis 11: From the Table 4.11 and Chart 4.11 it is indeed that out of 100 respondents
29% of people know about Portfolio Management from the source of Magazines/News
Peppers, 24% of people know about Portfolio Management from the source of
Advertisements, and mostly 46% of people from Social Network and only 1% of people
know about Portfolio Management from the other sources.

Analysis 12: From the Table 4.12and Chart 4.12 it is observe that out of 100 respondents
55% of people know about Capital Assets Pricing Model of Portfolio Management, 10%
of people know about Arbitrage Pricing Theory of Portfolio Management, 23% of people
know about Modern Portfolio Theory of Portfolio Management and only 12% of people
know about other theory of Portfolio Management.

Analysis 13: There are 100 respondents. From the Table 4.13 and Chart 4.13 it is observe
that for getting higher return from portfolios 37% of people invest in portfolios, 22% of
people for bearing risk, 16% of people invest in portfolios because of long term investment,
25% of people invest in portfolios for all this reasons.

Analysis 14: From the Table 4.14 and Chart 4.14 it is observe that out of 100 respondents
36% of people gets higher returns in Bank, 28% of people gets higher returns in Post Office

62
securities, 29% of people gets higher returns in Shares and only 7% of people gets return
in Life Insurance securities.

Analysis 15: From the Table 4.15 and Chart 4.15 it is observe that out of 100 respondents
30% of people bear higher risk in Bank, 26% of people bear risk in Post Office securities,
34% of people bear higher risk in Shares and only 10% of people bear risk in Life Insurance
securities.

Analysis 16: From the Table 4.16 and Chart 4.16 it is observe that Out of 100 respondents
only 38% of people know the benefits of Portfolios and think that it is helpful for future,
22% of people don’t know about the benefits of Portfolios and only 40% of people think
that portfolios have benefit and it helps in future.

Analysis 17: From the Table 4.17 and Chart 4.17 it is observe that out of 100 respondents
43% of people invest in portfolios for the purpose of better career, 14% of people invest in
portfolios for Marriage, 25% of people invest in portfolios for their children’s education
and 17% of people for their Retirement and only 1% of people invest in portfolios for other
reasons.

Conclusion:

From detailed study and analysis it is concluded that Portfolio helps investors to reduce or
manage the risk involved in investing funds. It spreads the risk involved in an investment
from one security to a group of different types of securities. The concept can be understand
from the phrase ‘don’t put all your eggs in one basket’. By investing money in a portfolio
of multiple securities instead of one single security an investor can save himself from the
danger of failure of a particular security to perform as per desired level or even making
losses. The loss incurred in one security can be compensated against profit earned from
some other security in the portfolio.

Portfolio management means selection of securities and constant shifting of the portfolio
in the light of varying attractiveness of the constituents of the portfolio. It is a choice of
selecting and revising spectrum of securities to it in with the characteristics of an investor.

63
Portfolio manager is a professional who manages portfolio of other persons for certain fee.
He seeks to improve return on investor’s portfolio but at the same time he also has reduce
the risk. The skill in constructing optimum portfolios in balancing risk and return, Modern
portfolio theory is based in scientific approach and it seeks to estimate risk and return
though an analysis and screening of individual security and its behaviors as compared to
other securities in the portfolio.

5.2 SUGGESTIONS:

Various techniques were used like questionnaire tool, and pie chart to complete this project
report. From this project work it is suggested to the company that so many investor are not
aware about Portfolios and Portfolio Management. This problem can be solve with the help
of advertisement to aware the investors about Portfolio Management.

64
 BIBLIOGRAPHY

Books:

 Dr. Sandeep Chopde. (2018-2019) Security Analysis and Portfolio Management.

Mumbai-400031 Sheth Publishers Private ltd. PP 7 - 13
 Sood Abhishek (2018-2019) Investment Analysis and Portfolio Management. Mumbai-
400031 Sheth Publishers Private ltd. PP 85 - 89.

Websites:

https://www.edupristine.com/blog/all-about-portfolio-management

https://www.investopedia.com/terms/p/portfoliomanagement.asp

https://www.moneyworks4me.com/about-stock-market/portfolio-management

https://corporatefinanceinstitute.com/resources/careers/jobs/what-does-a-portfolio-manager-
do/

https://www.karvy.com/growth-hub/portfolio-management/advantages-of-portfolio-
management-services

https://efinancemanagement.com/investment-decisions/benefits-drawbacks-of-portfolio-
management

https://www.investopedia.com/terms/p/portfoliomanager.asp

https://www.managementstudyguide.com/role-of-portfolio-manager.htm

https://www.managementstudyguide.com/portfolio-management-models.htm

https://www.ig.com/uk/investments/support/glossary-investment-terms/portfolio-risk-
definition

http://www.ijirset.com/upload/2015/january/82_KC_NARAYANA_1__16_pgs_.pdf

65
 QUESTIONNAIRE

PERSONAL DATA
Q.1 Name: ___________________________________
Q.2 Age:
 18-25
 26-35
 36-45
 45 & Above
Q.3 Gender:
 Female
 Male
Q.4 Occupation:
 Business
 Profession
 Employee
 Other
Q.5 Income
 10000-15000
 16000-25000
 26000-35000
 36000 & ABOVE
PORFOLIO MANAGEMENT SURVEY DATA
Q.6 Do you know about Portfolio Management?
 Yes
 No
Q.7 Are you investing in Portfolios?
 Yes
 No

66
Q.8 If yes, in which kind of portfolio securities you prefer to invest?
 Bank
 Post office
 Shares
 Life Insurance
 Other

Q.9 Do you know about the types of portfolio management?

 Yes
 No
Q.10 From which type you manage your portfolios?
 Active
 Passive
 Discretionary
 Non-Discretionary.
Q.11 Do you know about Portfolio Manager?
 Yes
 No
Q.12 From which source you know about Portfolio Management?
 Magazines/News Peppers
 Advertisement
 Social Network
 Other
Q.13 Which kind of Portfolio Management Models you know?
 Capital Assets Pricing Model
 Arbitrage Pricing Theory
 Modern Portfolio Theory
 Other
Q.14 According to you which kind of factor affecting investment decision in Portfolio
Management?
 Return
 Risk
 Time
 All

67
Q.15 From which security you get higher returns?
 Bank
 Post office
 Shares
 Life Insurance
 Other
Q.16 According to you in which security you bear higher risk?
 Bank
 Post office
 Shares
 Life Insurance

Q.17 Do you know the benefit of Portfolio Management and does it help in future?
 Yes
 No
 Maybe
Q.18 For which purpose you invest in Portfolios?
 Career
 Marriage
 Children's education
 Retirement
 Other

68