portfolio management services in mutual funds

PORTFOLIO MANAGEMENT SERVICES IN MUTUAL FUNDS

St. Francis Institute of Management and Research

SUMMER PROJECT REPORT


Prepared for the Mumbai University in the partial fulfillment of the

requirement for the award of the degree in

MASTERS OF MANAGEMENT STUDIES

Submitted By:

Name: BINU PAUL VILLAN

Roll No.: 68 Year: 2012

Under the guidance of

DR. S. P. DAS

SFIMAR

St Francis Institute of Management and Research, Mt. Poinsur,

S.V.P Road, Borivali (W) Mumbai.

Batch 2011-2013



DECLARATION

I hereby declare that the following project report titled "Portfolio Management

Services in Mutual Funds" is an authentic work done by me.

This is to declare that all the work indulged in the completion of this work such as

research, data collection, analysis is a profound and honest work of mine.

Binu Paul Villan Dr. S. P Das Student Project Guide

Date:

Place: Mumbai



ACKNOWLEDGEMENT

This project bears imprint of all those who have directly or indirectly helped and extended their

kind support in completing this project.

I would like to express my sincere gratitude to Mr. Sanjay Tari and Ms. Swapnila Shet, Director

at Acensure Financial Solutions Pvt. Ltd for giving me this opportunity to undergo this lucrative

project and for their encouraging and kind support throughout the project.

I am extremely thankful and obliged to Dr. S. P. Das (Project Guide) for practical tips,

encouragement to take on challenging assignments and constant guidance since inception, till

the completion of the project.

I would also thank Acensure Financial Solutions Pvt. Ltd employees and customers, whom I

met during the course of this project, for their support and for providing valuable information,

which helped me, complete this project successfully.

This project report is a collective effort of all and I sincerely remember and acknowledge all of

them for their excellent help and assistance throughout the project.

BINU PAUL VILLAN



EXECUTIVE SUMMARY

Investing money where the risk is less has always been risky to decide. The first factor, which

an investor would like to see before investing, is risk factor. Diversification of risk gave birth

to the phenomenon called Mutual Fund.

The Mutual Fund Industry is in the growing stage in India, which is evident from the flood of

mutual funds offered by the Banks, Financial Institutes & Private Financial Companies.

As a part of my study curriculum it is necessary to conduct a grand project. It provides me an

opportunity to understand the particular topic in depth and which leads to that topic.

My Project topic is Portfolio Management services in Mutual Funds which give special emphasis

on creation of Portfolio’s, Portfolio revision and Comparison of Mutual Funds with various

Performance measures.

In Portfolio Management it is very important to manage investor’s portfolio efficiently. By

efficient we mean which reduces the risk of investor and increases return on the other hand.

This project is all about how to manage an Investor’s portfolio in mutual fund. How to

diversify the investments into different schemes of funds

My First Phases covers mutual fund industry, current economic condition of the economy, brief

introduction to portfolio Management services, investor’s behavior and types, their objective, risk

appetite.

My Second Phase covers creation of Portfolio’s as per different type of Investor, Portfolio

revision and Comparison of Mutual Funds with various Performance measures.



TABLE OF CONTENTS

SR. NO PARTICULARS

PAGE NO

1 Introduction to Acensure Financial Solutions Pvt. Ltd 1

1.1 Organization chart 2

1.2 Products & Services 3

2 Need for the study 5

3 Objectives of the study 6

4 Research methodology 7

4.1 Research Design 7

4.2 Data collection method 7 4.3 Sample design 7

4.4 Null Hypothesis 7

5 5.1 Introduction to Mutual Funds 8

5.2 History of Mutual Funds 9

5.3 Organization of mutual funds 11

5.4 Types of Mutual funds 11

5.5 Fund Management 13

6 Introduction to Portfolio Management Services 14

6.1 Phases of Portfolio Management 14

6.2 Types of Portfolio Management 16

6.3 Managing Portfolio 17

6.4 Investor Types 18

6.5 SEBI Guidelines for PMS 20

7 Data Analysis 21

7.1 Interpretation 24

8 Portfolio creation 25

8.1 Aggressive Portfolio 25

8.2 Conservative Portfolio 26

8.3 Balanced Portfolio 27

9 Portfolio revision 28

9.1 Constant Rupee Plan 29

9.2 Constant Ratio Plan 35

9.3 Variable Plan 40

9.4 Calculation of returns 46

10 Mutual fund comparison & Rankings 47

11 Limitations & Future Scope 56

12 Findings & Suggestions 57

13 My Learning 58

14 Conclusion 59 15 References 60



LIST OF TABLES

SR. NO PARTICULARS PAGE NO

1 Aggressive Investor Portfolio 25

2 Conservative Investor Portfolio 26

3 Balanced Investor Portfolio 27

4 Portfolio Revision As Per Constant Rupee Plan 29

4.1 Portfolio as on May 2nd

2012 29

4.2 Revised Portfolio as on May 15th

2012 30

4.3 Revised Portfolio as on May 31th 2012 31

4.4 Revised Portfolio as on June 15th 2012 32

4.5 Portfolio as on June 29th

2012 34

4.6 Calculation of returns as per Constant rupee plan 34

5 Portfolio revision as per Constant ratio plan 35

5.1 Portfolio as on 2nd May 2012 35

5.2 Revised Portfolio as on may 15th 2012 36

5.3 Revised Portfolio as on May 31st 2012 37


5.5 Portfolio as on June 29th 2012 39

5.6 Calculation of Returns as Per Constant Ratio Plan 39

6 Portfolio Revision as per Variable plan 40

6.1 Portfolio as on 2nd May 2012 40

6.2 Revised Portfolio as on May 15th

2012 41

6.3 Revised Portfolio as on May 31th 2012 42


6.5 Portfolio as on June 29th

2012 45

6. 6.6 Calculation of returns as per Variable plan 45

7 Calculation of Portfolio Returns 46

8 Sharpe ratio 52

9 Treynor ratio 53 10 Standard Deviation 54

11 Rankings as per Sharpe ratio & Treynor Ratio 55

12 Rankings as per Standard deviation 55



LIST OF FIGURES

SR. NO PARTICULARS

PAGE NO

1 Corporate Logo 1

1.1 Information on department 2

1.2 Products &services 3

2 Mutual fund 8

2.1 History of mutual fund 10

2.2 Organization of a Mutual fund 11

2.3 Types of mutual funds 11

2.4 Types of Portfolio Management 16

3 3.1 Aggressive Investor Portfolio 19

3.2 Conservative Investor Portfolio 19

3.3 Balanced Investor Portfolio 19

4 4.1 Demographics 21

4.2 Age group 21

4.3 Monthly income 22

4.4 Expected liquidation period 22

4.5 Expected return 22

4.6 Decrease in Portfolio 23

4.7 Portfolio Allocation 23

4.8 Capital or Return preference 23

5 5.1 HDFC Top 200 return Performance 50

5.2 ICICI Prudential Focused Bluechip Equity Fund Return 50

5.3 DSP Blackrock Small and Midcap Fund Return 50

5.4 Franklin India Bluechip Return 51

5.5 Reliance Banking Fund Return 51



1. COMPANY PROFILE

Fig 1: Company Logo

Acensure is an integrated financial services group offering a wide range of services to a

significant clientele that includes Corporate, HNI’s and Retail Investors.

We have grown since inception and still growing in the financial field and the minds of our

clients. The value of integrity, team work, innovation, performance and partnership shape our

vision and drive us to our purpose. We are steadily but surely ascending the finance market.

AFFILIATIONS:

LIC the No.1 Life Insurer of India.

United India one of the topmost in Non-life Insurance Sector

iFAST financial Singapore’s No.1 Integrated Wealth Management platform

Karvy Stock Broking Ltd. – the No.1 Broking firm in India

Disha Direct – The Pioneers in the Second Home Segments

Apollo Munich – the topmost in Health Insurance Sector

Star health - the topmost in Health Insurance Sector

Bajaj Allianz – No.1 In Motor Insurance Sector



1.1 ORGANIZATION CHART

Fig 1.1: information on department

Credentials In Different Hues

Member Million Dollar Round Table (MDRT)– USA (Since last 5 years)

Member Chairman’s Club(CM) of LIC (since last 6 years)

Member Chartered Insurance Institute (CII)-UK(Since last 5 years)

Member Indian Financial Planners Association(IFPA)—Life Member

ACENSURE FINANCIAL SOLUTIONS PVT. LTD

Administration

Dept

Looks after the accounts of the clients and checks the account

Marketing

Dept

They pass the entry regarding collection of

premium. and also update the clients

database.

Backoffice

They bring new clients for the company and

conduct customer Relationship

Management activity



1.2 PRODUCT & SERVICES

Life Insurance Solutions

Mutual Funds

Fig 1.2 Products &services

Advisors For All The Below Mentioned Products

Investment and Advisory services



Non-Life Insurance Products

Specialised Services for NRI’s

Thorough Market Research Support to clients

IPO’s, Bonds, Company FD’s

Real Estate (1st Homes, 2nd Homes, Plots etc)

Loans (Home, Personal, Project etc….)

Holiday homes and Recreation Resorts

Share Trading and Broking

Projected Goals:

Making Acensure into Rs.5000 crores Group by 2020.

Setting up of 100+ offices.

Acquiring Corporate Broking License.

Investing in Real Estate in the form of Second Homes, Resorts And Holiday Homes.

And Creating an Earning Platform

Contact Details

Acensure Financial Solution Pvt Ltd

Mr. Sanjay Tari

No. 2, Sheetal Apartment, Kulupwadi, Borivali,( East)

Telephone +(91)-(22)-65350012

Mobile +(91)9821788989, 9870766657

Fax No +(91)-(22)-28846086

Website www.acensurefinance.com



2. NEED FOR THE STUDY

Portfolio management services is becoming a rapidly growing area serving a broad array of

investors both individual and institutional-with investment portfolios ranging in asset size from

thousands to cores of rupees.

Increased market volatility- risk and return parameters of financial assets are continuously

changing so your assets in the portfolio should be properly managed.

Portfolio’s created by portfolio manager should be as per investor’s behavior and their objective, risk

appetite. Portfolio creation is important and it should be as per investor class otherwise it would not

fulfill its financial needs

Portfolio revision is another vital aspect in an investor’s Portfolio because continuous revision is

needed to gain higher returns with manageable risk.

Acensure Financial Solutions Pvt. Ltd. is mainly into insurance and has started mutual funds and

has a tie up with IFAST Financial for PMS in mutual funds. CRM activity was conducted in order

to know the customer perception about Portfolio management Service.

Therefore a Detailed study on Portfolio management services in mutual funds specially focusing

on portfolio creation of different types of investor on the basis of risk, Portfolio revision and

mutual fund comparison.



3. OBJECTIVES OF THE STUDY

Primary objectives

The main objective of this study is doing an In-depth analysis of Mutual Fund

Portfolio by taking sample of funds and comparing it with it others

Secondary objectives

To understand the concept of portfolio management and its relation to Mutual funds.

To evaluate and create a portfolio’s consisting the best mutual fund schemes which will earn

highest possible returns and will minimize the risk.

To understand the process Portfolio revision using different types of plans

Also to analyze the performance of mutual fund schemes on the basis of various parameters.



4. RESEARCH METHODOLOGY

4.1 RESEARCH DESIGN

Exploratory Research & Analytical Research

Quantitative research

4.2 DATA COLLECTION METHOD

Primary data: The study was conducted through a Survey and involved, interviewing different age

group of people through the Survey, falling under three distinct Age – Brackets, being:

22- 35

35 – 50

Above 50

The information gives us an overall understanding of the respondent’s investment profile and

helps us to understand what investment mix and which mutual fund will be appropriate, or

inappropriate, in helping to achieve his financial goals.

Secondary data:

For data collection purpose the secondary source was used like mutual fund factsheet, books, websites

This data was used To Create Portfolio’s as per Investor type, Portfolio revision and comparison of

mutual funds schemes

1.3 SAMPLE DESIGN

Sample Size: 100 Samples

Type of sample: Convenience sampling

The sample size consist of clients of Acensure

customers taken Insurance policy and mutual funds

customers having PMS a/c

4.4 NULL HYPOTHESIS

Passive Management gives more return compared to Active Management.

Passive Management has better approach compared to Active Management



5.1 INTRODUCTION TO MUTUAL FUND

A mutual fund is just the connecting bridge or a financial intermediary that allows a group of

investors to pool their money together with a predetermined investment objective. The mutual

fund will have a fund manager who is responsible for investing the gathered money into

specific securities (stocks or bonds). When you invest in a mutual fund, you are buying units or

portions of the mutual fund and thus on investing becomes a shareholder or unit holder of the

fund.

Mutual funds are considered as one of the best available investments as compare to others they

are very cost efficient and also easy to invest in, thus by pooling money together in a mutual

fund, investors can purchase stocks or bonds with much lower trading costs than if they tried to

do it on their own. But the biggest advantage to mutual funds is diversification, by minimizing

risk & maximizing returns.

Fig 2 Mutual fund



5.1 HISTORY OF MUTUAL FUNDS

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the

initiative of the Government of India and Reserve Bank of India. The history of mutual funds in

India can be broadly divided into four distinct phases

First Phase – 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the

Reserve Bank of India and functioned under the Regulatory and administrative control of the

Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development

Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The

first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700

crores of assets under management.

Second Phase – 1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and

Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI

Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Canbank

Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund

(Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its

mutual fund in June 1989 while GIC had set up its mutual fund in December 1990.

At the end of 1993, the mutual fund industry had assets under management of Rs.47,004 crores.

Third Phase – 1993-2003 (Entry of Private Sector Funds)

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund

industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in

which the first Mutual Fund Regulations came into being, under which all mutual funds, except

UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with

Franklin Templeton) was the first private sector mutual fund registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and

revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual

Fund) Regulations 1996.

The number of mutual fund houses went on increasing, with many foreign mutual funds setting

up funds in India and also the industry has witnessed several mergers and acquisitions. As at the

end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The



Unit Trust of India with Rs.44, 541 crores of assets under management was way ahead of other

mutual funds.

Fourth Phase – since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated

into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets

under management of Rs.29, 835 crores as at the end of January 2003, representing broadly, the

assets of US 64 scheme, assured return and certain other schemes.

The Specified Undertaking of Unit Trust of India, functioning under an administrator and under

the rules framed by Government of India and does not come under the purview of the Mutual

Fund Regulations.

The second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC. It is registered with

SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI

which had in March 2000 more than Rs.76,000 crores of assets under management and with the

setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with

recent mergers taking place among different private sector funds, the mutual fund industry has

entered its current phase of consolidation and growth.

The graph indicates the growth of assets over the years.

Fig 2.1 History of mutual fund



5.2 ORGANIZATION OF A MUTUAL FUND

Fig 2.2 Organization structure

5.3 TYPES OF MUTUAL FUNDS

Fig 2.3 Types

Types of Mutual Fund

By Structure

Open ended Close ended

Interval

By Investment Objective

Equity

Debt

Balanced

Money MarketSchemes



1. Equity fund:

These funds invest a maximum part of their corpus into equities holdings. The structure of the fund

may vary different for different schemes and the fund manager’s outlook on different stocks. The

Equity Funds are sub-classified depending upon their investment objective, as follows:

Diversified Equity Funds

Mid-Cap Funds

Sector Specific Funds

Tax Savings Funds (ELSS)

Equity investments are meant for a longer time horizon, thus Equity funds rank high on the risk-

return matrix.

2. Debt funds:

. By investing in debt instruments, these funds ensure low risk and provide stable income to the

investors. Debt funds are further classified as:

Gilt Funds

Income Funds

MIP.

Short Term Plans (STP)

Liquid Funds:

3. Balanced funds:

They invest in both equities and fixed income securities, which are in line with pre-defined

investment objective of the scheme. These schemes aim to provide investors with the best of both

the worlds. Equity part provides growth and the debt part provides stability in returns.

Further the mutual funds can be broadly classified on the basis of investment parameter viz,

By investment objective:

Growth Schemes: Growth Schemes are also known as equity schemes. The aim of these schemes

is to provide capital appreciation over medium to long term.

Income Schemes: Income Schemes are also known as debt schemes. The aim of these schemes is

to provide regular and steady income to investors. These schemes generally invest in fixed income

securities such as bonds and corporate debentures.

Balanced Schemes: Balanced Schemes aim to provide both growth and income by periodically

distributing a part of the income and capital gains they earn. These schemes invest in both shares

and fixed income securities, in the proportion indicated in their offer documents (normally 50:50).



Money Market Schemes: Money Market Schemes aim to provide easy liquidity, preservation of

capital and moderate income. These schemes generally invest in safer, short-term instruments,

such as treasury bills, certificates of deposit, commercial paper and inter-bank call money.

Other schemes

Tax Saving Schemes:

Index Schemes:

Sector Specific Schemes

5.4 FUND MANAGEMENT

Actively managed funds:

Mutual Fund managers are professionals. They are considered professionals because of their

knowledge and experience. Managers are hired to actively manage mutual fund portfolios.

Instead of seeking to track market performance, active fund management tries to beat it. To do

this, fund managers "actively" buy and sell individual securities. For an actively managed fund,

the corresponding index can be used as a performance benchmark.

Actively managed fund styles:

Fund styles usually fall within the following three categories.

Fund Styles:

Value: The manager invests in stocks believed to be currently undervalued by the market.

Growth: The manager selects stocks they believe have a strong potential for beating the market.

Blend: The manager looks for a combination of both growth and value stocks.

Passively Managed Funds:

Passively managed mutual funds are an easily understood, relatively safe approach to investing in

broad segments of the market. They are used by less experienced investors as well as

sophisticated institutional investors with large portfolios.



6 PORTFOLIO MANAGEMENT SERVICES

What is Portfolio Management?

Portfolio Management Services, called, as PMS are the advisory services provided by corporate

financial intermediaries. It enables investors to promote and protect their investments that help

them to generate higher returns. It devotes sufficient time in reshuffling the investments on hand

in line with the changing dynamics. It provides the skill and expertise to steer through these

complex, volatile and dynamic times. It is a choice of selecting and revising spectrum of

securities to it with the characteristics of an investor. It prevents holding of stocks of depreciating-

value. It acts as a financial intermediary and is subject to regulatory control of SEBI.

6.1 PHASES OF PORTFOLIO MANAGEMENT

Security Analysis

Portfolio Analysis

Portfolio Selection

Portfolio Revision

Portfolio Evaluation

Security Analysis

(a) Fundamental analysis: This analysis concentrates on the fundamental factors

Affecting the company such as EPS (Earning per share) of the company, the dividend

Payout ratio, competition faced by the company, market share, quality of management

Etc.

(b) Technical analysis: The past movement in the prices of shares is studied to identify

trends and patterns and then tries to predict the future price movement. Current

market price is compared with the future predicted price to determine the mispricing.

Technical analysis concentrates on price movements and ignores the fundamentals of

the shares.

(c) Efficient market hypothesis: This is comparatively more recent approach. This

approach holds that market prices instantaneously and fully reflect all relevant

available information. It means that the market prices will always be equal to the

Intrinsic value.

Portfolio Analysis

A portfolio is a group of securities held together as investment. It is an attempt to



spread the risk all over. The return & risk of each portfolio has to be calculated

Mathematically and expressed quantitatively. Portfolio analysis phase of portfolio

Management consists of identifying the range of possible portfolios that can be

constituted from a given set of securities and calculating their risk for further

analysis.

Portfolio Selection

The goal of portfolio construction is to generate a portfolio that provides the highest

returns at a given level of risk. Harry Markowitzh portfolio theory provides both the

conceptual framework and the analytical tools for determining the optimal portfolio

in a disciplined and objective way.

Portfolio Revision

The investor/portfolio manager has to constantly monitor the portfolio to ensure that

it continues to be optimal. As the economy and financial markets are highly volatile

dynamic changes take place almost daily. As time passes securities which were once

attractive may cease to be so. New securities with anticipation of high returns and

low risk may emerge.

Portfolio Evaluation

Portfolio evaluation is the process, which is concerned with assessing the

performance of the portfolio over a selected period of time in terms of return & risk.

The evaluation provides the necessary feedback for better designing of portfolio the

next time around.



6.2 TYPES OF PORTFOLIO MANAGEMENT

Fig: 2.4 Types

The Discretionary portfolio management services (DPMS):

In this type of services, the client parts with his money in favor of manager, who in return,

handles all the paper work, makes all the decisions and gives a good return on the investment

and for this he charges a certain fees

The Non-discretionary portfolio management services:

The manager function as a counselor, but the investor is free to accept or reject the manager’s

advice; the manager for a services charge also undertakes the paper work. The manager

concentrates on stock market instruments with a portfolio tailor made to the risk taking ability

of the investor

Types of Portfolio Management

Discretionary portfolio management services

Non-discretionary portfolio management

services



6.3 MANAGING PORTFOLIO

ASSET ALLOCATION

The process of dividing a portfolio among major asset categories such as bonds, stocks or

cash. The purpose of asset allocation is to reduce risk by diversifying the portfolio. The ideal

asset allocation differs based on the risk tolerance of the investor.

To help determine which securities, asset classes and subclasses are optimal for

your portfolio; let's define some briefly:

Large-cap stock -These are shares issued by large companies with a market capitalization

generally greater than $10 billion.

Mid-cap stock - These are issued by mid-sized companies with a market cap generally between

$2 billion and $10 billion.

Small-cap stocks – These represent smaller-sized companies with a market cap of less than $2

billion. These types of equities tend to have the highest risk due to lower liquidity.

International securities These types of assets are issued by foreign companies and listed on a

foreign exchange. International securities allow an investor to diversify outside of his or her

country, but they also have exposure to country risk - the risk that a country will not be able to

honor its financial commitments.

Emerging markets – This category represents securities from the financial markets of a

developing country. Although investments in emerging markets offer a higher potential return,

there is also higher risk, often due to political instability, country risk and lower liquidity.

Money market - Money market securities are debt securities that are extremely liquid

investments with maturities of less than one year. Treasury bills make up the majority of these

types of securities.

Real-estate investment trusts (REITs) REITs trade similarly to equities, except the

underlying asset is a share of a pool of mortgages or properties, rather than ownership of a

company



6.4 INVESTOR TYPES

There are many different types of investors in the stock market, investors can be classified into

the following types: Aggressive, Conservative, and Balanced

Aggressive Investor

Aggressive investors tend to concentrate on equity investments such as individual stocks and

mutual funds. They are open to more risk, willing to see large short term swings in market

performance on an annualized basis. They aim for large growth in the market.

Balanced investors

Balanced investors will have a time horizon of 5 to 10 years and choose to diversify across both

aggressive growth-oriented investments and more conservative interest-earning investments.

They emphasize income over growth. Balanced investors are medium risk investors.

Conservative Investor

Conservative investors have a 2 to 5 year time horizon, typically because they are nearing

retirement or have a short-term need for their investment. They prefer a higher level of income

than does the stable investor. Conservative investors are low to medium risk investors.

Low High Risk



Fig 3.1: Conservative Portfolio

Fig 3.2 Aggressive portfolio

Fig3.3: Balanced portfolio

70%

20%10%

Conservative Portfolio

Fixed Income Securities

Equities

Cash and equivalents

15%

80%

5%

Aggressive Portfolio


Equities


55%35%

10%

Balanced Portfolio


Equities




6.6 SEBI GUIDELINE FOR PMS

For investment in listed securities, an investor is required to open a Demat account in his/her

own name

Minimum investment amount of clients for such schemes to Rs 25 lakh from the earlier Rs 5

lakh.

Portfolio manager will not be allowed to hold the unlisted securities, besides the listed

securities, belonging to the portfolio account, in its own name on behalf of its clients.

Portfolio manager cannot offer/ promise indicative or guaranteed returns to clients.

The portfolio manager is required to have a minimum net worth of Rs. 2 crore.



7 DATA ANALYSIS

The data collected through the Profiler provided for an Analysis of an Individual’s Risk – taking

capacity through the Risk – Analyzer. The Questionnaire, after being administered on the

Respondents categorizes each of them on the basis of their risk – taking, as Investors of the

following classes: Conservative, Balanced, and Aggressive

1. Demographic Analysis: The data of 100 respondents included 70 males and 30 females.

Fig 4.1 Demographics

2. Age Group

Fig 4.2 Age group

3. Income level Between 3,00,000 to 30,00,000

4. .What percentage of monthly income can be invested?

70%

30%

Demographic Analysis

males

females

40%

30%

30%Age

18 to 35

36 to 50

Above50



Fig 4.3: Monthly Income

5. When do you expect to liquidate your investment?

Fig 4.4 expected liquidation period

5. What is your expected rate of return from your investments

Fig 4.5: expected return

10%

60%

10%

20%

0%

0 to 10%

11% to 20%

21% to 30%

More than 30%

I currently have no income

0

20

40

60

80

less than 1yr 1 to 2yrs 3 to 5yrs 5 yrs and above

Series1 5 10 70 15

per

iod

0

20

40

60

6%p.a 10%-15 % p.a more than 15% p.a

Series1



6. I would start to worry about my investments if my portfolio value falls

Fig 4.6: Decrease in Portfolio

7. Maximum allocation in your current portfolio pertains to

Fig 4.7: Portfolio Allocation

8. I prefer to keep capital safe rather than have high return

Fig 4.8: capital or return preference

Less than 5% p.a

5%-10% p. a 10%-20% p.a 20%-30% p. a More than 30%

p. a

Series1 10 30 40 15 5

0

5

10

15

20

25

30

35

40

45

10%

15%

45%

25%

5%Savings and fixed deposits

Bonds

Equities

Mutual Funds

0102030405060

Strongly agree

Neutral Strongly disagree

Series1 60 10 30



7.1 INTERPRETATION

Out of 100 respondents 70 were male and 30 female with Income level between 3 lakhs to

30,00,000 Lakhs

60% of the respondents prefer investing monthly 11% to 20%

70% of the respondents are ready to liquidate their investments with range of 3 to 5years

45% of the investor’s portfolio consist of Equities

Age Group of 22 to 35 young working class with limited liability prefers to take higher risk and

get higher returns of 15% and more. They belong to Aggressive class of Investors. Equity funds

are most preferred by them.

Age group of 36 to 50 is those respondents who have dependents on them emphasize income

over growth. They are medium risk investors. They prefer to keep capital safe rather than having

high return. They belong to balanced class of Investors.

Age groups of 50 and above are those respondents nearing retirement or have a short-term need

for their investment. They are low to medium risk investors. They prefer a higher level of income

than does the stable investor. They belong to Conservative class of investors. Debt Funds are

most preferred by them.



8 PORTFOLIO CREATION

8.1 AGGRESSIVE INVESTOR PORTFOLIO (80%EQUITY AND 20%DEBT) Table 1

SCHEME NAME NATURE RETURNS BETA Rs

SBI MAGNUM SECTOR

FUNDS UMBRELLA -

PHARMA – GROWTH

EQUITY 23.09 1.01 400000

SBI MAGNUM SECTOR

FUNDS UMBRELLA - EMERG

BUSS FUND – GROWTH

EQUITY 22.73 1.03 200000

BIRLA SUN LIFE MNC FUND

– GROWTH

EQUITY 24.28 0.74 600000

RELIANCE PHARMA FUND –

GROWTH

EQUITY 29.65 0.91 800000

EQUITY 2000000

SUNDARAM BOND SAVER -

INSTITUTIONAL PLAN –

GROWTH

DEBT 9.41 1.17 125000

RELIANCE MONTHLY

INCOME PLAN – GROWTH

DEBT 9.40 1.14 125000

SAHARA SHORT TERM

BOND FUND – GROWTH

DEBT 9.24 1.03 125000

HDFC MONTHLY INCOME

PLAN - LONG TERM PLAN –

GROWTH

DEBT 9.14 1.28 125000

DEBT

TOTAL PORTFOLIO 25,00,000



8.2 CONSERVATIVE INVESTOR PORTFOLIO (80% DEBT 20% EQUITY)

Table 1.2

SCHEME NAME NATURE RETURNS BETA Rs

ICICI PRUDENTIAL

TECHNOLOGY FUND –

GROWTH

EQUITY 26.03 0.88 200000

FRANKLIN INFOTECH

FUND – GROWTH

EQUITY 20.18 0.89 50000

HDFC MID-CAP

OPPORTUNITIES FUND –

GROWTH

EQUITY 21.10 0.80 100000

RELIGARE MID N SMALL

CAP FUND – GROWTH

EQUITY

21.35

0.80

150000

EQUITY

HDFC MULTIPLE YIELD

FUND - PLAN 2005 –

GROWTH

DEBT 10.86 0.45 400000

HDFC MULTIPLE YIELD

FUND - GROWTH

DEBT

10.33

0.69

400000

SBI MAGNUM CHILDREN

BENEFIT PLAN

DEBT 9.39 0.76 400000

TEMPLETON INDIA STIP -

IP – GROWTH

DEBT 8.40 0.72 400000

UTI CRTS 81 – GROWTH DEBT 11.21 0.86 400000

DEBT 20,00,000




8.3 BALANCED INVESTOR PORTFOLIO (50% DEBT 50% EQUITY)

Table 3

SCHEME NAME NATURE RETURNS BETA

HDFC MID-CAP


GROWTH

EQUITY 21.10 0.80

200000

RELIANCE EQUITY


GROWTH

EQUITY 20.97 0.86

100000

UTI MNC FUND - GROWTH

EQUITY 22.46 0.71

400000

RELIGARE MID N SMALL CAP

FUND - GROWTH EQUITY 21.35 0.80

300000

EQUITY 1000000

UTI CRTS 81 – GROWTH DEBT 11.21 0.86

250000

HDFC MONTHLY INCOME

PLAN - LONG TERM PLAN -

GROWTH

DEBT 9.14 1.28

250000

UTI SHORT TERM INCOME

FUND - IP – GROWTH

DEBT 8.62 0.83

250000

SBI MAGNUM CHILDREN

BENEFIT PLAN DEBT 9.39 0.76

250000

DEBT 10,00,000




9 PORTFOLIO REVISION

Portfolio revision is done in this Project is done in 3 following ways in order to find out which of

give them higher returns in the span of 2months from May 2nd

2012 to June 30th

2012

Portfolios are revised every 15 days in span of two months

1. Constant Rupee Plan

The objective of this plan is to balance the division between the conservative and aggressive

components of the portfolio in terms of the target value.

The target value could be fixed initially by the investor in a desirable proportion

2. Constant Ratio Plan

In this plan, we maintain a ratio between the aggressive and conservative components of a

portfolio. The initial ratio is FIXED by the investor and could be, say, 1:1 or any other desirable

ratio.

3. Variable Plan

This plan gives more flexibility to the investors to revise the portfolio components.

When share price falls, the investor may shift major component of the conservative and aggressive

components

The desired ratio of investment holding between aggressive and conservative components of a

portfolio, hence, may vary according to the flexibility that an investor wishes to incorporate in the

portfolio revision decision



9.1 PORTFOLIO REVISION AS PER CONSTANT RUPEE PLAN

In Constant Rupee Plan, as it is an Aggressive Investor its Equity is kept Rs 20, 00,000 and Debt is

Rs 5, 00,000. Every 15th

day it’s revised as per constant rupee plan

PORTFOLIO AS ON MAY 1st 2012

Table 4.1

SCHEME NAME NAV as

on 2nd

May

Returns Market

return

Excess

return

Rank % Rs Units

SBI MAGNUM SECTOR

FUNDS UMBRELLA –

PHARMA – GROWTH

49.57 23.09

19 4.09 2 0.2 400000 8069

SBI MAGNUM SECTOR

FUNDS UMBRELLA –

EMERG BUSS FUND –

GROWTH

46.89

22.73

19 3.73 1 0.1 200000 4265

BIRLA SUN LIFE MNC

FUND – GROWTH

230.02 24.28 19 5.28 3 0.3 600000 2608

RELIANCE PHARMA

FUND – GROWTH

58.386 29.65 19 10.65 4 0.4 800000 13702

EQUITY 10 2000000

SCHEME NAME NAV as

on 2nd

May

Returns Market

return

Excess

return

Rank % Rs Units

SUNDARAM BOND

SAVER –

INSTITUTIONAL PLAN

– GROWTH

34.752 9.41 - - - - 125000 3597

RELIANCE MONTHLY

INCOME PLAN –

GROWTH

23.43

9.40 - - - - 125000

5336

SAHARA SHORT TERM

BOND FUND –

GROWTH

13.06

9.24 - - - - 125000

9572



HDFC MONTHLY

INCOME PLAN – LONG

TERM PLAN – GROWTH

24.35

9.14 - - - - 125000 5132

DEBT 500000

TOTAL PORTFOLIO 2500000

REVISED PORTFOLIO AS ON MAY 15TH

2012

Table 4.2

SCHEME NAME NAV as

on 15th

May

Rs Increase

Decrease

Revised

on May

15th

New units on

May 15th

SBI MAGNUM SECTOR

FUNDS UMBRELLA -

PHARMA – GROWTH

49.02

395561.83

-1.11%

395561.83

8069.40

SBI MAGNUM SECTOR

FUNDS UMBRELLA -

EMERG BUSS FUND –

GROWTH

45.21

192834.29

-3.58%

191274.17

4230.79

BIRLA SUN LIFE MNC

FUND – GROWTH

223.79

583749.24

-2.71%

583749.24

2608.47

RELIANCE PHARMA

FUND – GROWTH

56.392

772678.38

-3.42%

772678.38

13701.9

EQUITY 1944823 1943263

SUNDARAM BOND

SAVER - INSTITUTIONAL

PLAN – GROWTH

34.98 125820.10 125000 3573.47

RELIANCE MONTHLY

INCOME PLAN –

GROWTH

23.22 123879.64 125000 5383.29



In constant Rupee Plan the equity and Debt is to be kept constant throughout. Here both equity and

Debt value has fallen so we have sold some of the equity from Scheme giving higher loss of 3.58%

SBI MAGNUM SECTOR FUNDS UMBRELLA – EMERG BUSS FUND – GROWTH and have

maintained the total Debt value 5,00,000.


2012

Table 4.3

SCHEME NAME NAV as on

31h May

Rs Increase/

Decrease

Revised on

May 31th

New units

on May

31th

SBI MAGNUM

SECTOR FUNDS

UMBRELLA -

PHARMA – GROWTH

48.38

390397.42

-1.31

390397.42

8069.40

SBI MAGNUM

SECTOR FUNDS

UMBRELLA - EMERG

BUSS FUND –

GROWTH

44.81

189581.85

-0.88

189581.85

4230.79

BIRLA SUN LIFE

MNC FUND –

GROWTH

221.8

578558.39

-0.89

578558.39

2608.47

RELIANCE PHARMA

FUND – GROWTH

56.33

771828.86

-0.11

774167.84

13743.44

EQUITY 1930366.5 1932705.5

SAHARA SHORT TERM


13.1

125382.85

125000

9541.98

HDFC MONTHLY

INCOME PLAN - LONG


24.03

123357.29

125000

5201.83

DEBT 498439.88 500000




SUNDARAM BOND

SAVER -

INSTITUTIONAL

PLAN – GROWTH

125000

3558.21

125533.732

3558.21

RELIANCE MONTHLY

INCOME PLAN –

GROWTH

125000

5351.03

125588.613

5351.03

SAHARA SHORT

TERM BOND FUND –

GROWTH

125000

9505.70

125570.342

9505.70

HDFC MONTHLY

INCOME PLAN -

LONG TERM PLAN –

GROWTH

125000

5178.13

126190.969

5178.13

DEBT 500000 502883.656

TOTAL PORTFOLIO 2432705.5

2432705.5

On May31st 2012 even though the portfolio has fallen both equity and Debt have increased as

compared to revised portfolio as May 15th. Some of the Debt scheme have been sold, and is invested in

Equity giving least loss RELIANCE PHARMA FUND – GROWTH

REVISED PORTFOLIO AS ON June 15th

2012

Table 4.4

SCHEME NAME

NAV as

on 15th

June

Rs Increase

(Decrease)

Revised on

June 15th

New

units on

June 15th

SBI MAGNUM

SECTOR FUNDS

UMBRELLA - PHARMA

– GROWTH

47.65

384506.75

-1.51

384506.75

8069.40

SBI MAGNUM SECTOR

FUNDS UMBRELLA -

EMERG BUSS FUND –

GROWTH

45.49

192458.791

1.52

195342.44

4294.18

BIRLA SUN LIFE MNC

FUND – GROWTH

223.8 583775.324 0.90 583775.32 2608.47



RELIANCE PHARMA

FUND – GROWTH

56.698 779225.43 0.65 779225.43 13743.44

EQUITY 1939966.3 1942849.96

SUNDARAM BOND

SAVER -

INSTITUTIONAL PLAN

– GROWTH

35.28 125533.732 125000 3543.08

RELIANCE MONTHLY

INCOME PLAN –

GROWTH

23.47 125588.61 125000 5325.95

SAHARA SHORT TERM

BOND FUND –

GROWTH

13.21 125570.34 125000 9462.52

HDFC MONTHLY

INCOME PLAN - LONG

TERM PLAN –

GROWTH

24.37 126190.96 125000 5129.25

DEBT

502883.65

500000

TOTAL PORTFOLIO 2432705.50 2442849.96

On June 15th

2012 even though the portfolio has fallen both equity and Debt have increased as

compared to revised portfolio as May 31th.

Some of the Debt scheme have been sold and is invested in Equity giving least loss SBI

MAGNUM SECTOR FUNDS UMBRELLA - EMERG BUSS FUND – GROWTH



PORTFOLIO AS ON JUNE 29TH

2012

Table 4.5

SCHEME NAME NAV as on 15th

June

Rs

SBI MAGNUM SECTOR FUNDS UMBRELLA -

PHARMA – GROWTH

50.13 404518.862


EMERG BUSS FUND – GROWTH

46.86 201225.48

BIRLA SUN LIFE MNC FUND – GROWTH 232.85 607381.967

RELIANCE PHARMA FUND – GROWTH 58.478 803688.749

EQUITY

2016815.06

SUNDARAM BOND SAVER - INSTITUTIONAL

PLAN – GROWTH

35.38 125354.308

RELIANCE MONTHLY INCOME PLAN –

GROWTH

23.58 125585.854

SAHARA SHORT TERM BOND FUND – GROWTH 13.26 125473.126

HDFC MONTHLY INCOME PLAN - LONG TERM

PLAN – GROWTH

24.55 125923.26

DEBT

502336.55

TOTAL PORTFOLIO as May 29th

2012 2519152

CALCULATION OF RETURNS AS PER CONSTANT RUPEE PLAN

Table 4.6

PORTFOLIO AS

ON MAY 2ND

2012

PORTFOLIO

AS ON JUNE

29TH

2012

Excess

Returns Returns %

25,00,000 2519152 19,152 0.73%

Opting for Constant Rupee Plan would give return of 0.73% in the span of 2months



9.2 PORTFOLIO REVISION AS PER CONSTANT RATIO PLAN

In Constant ratio Plan a fixed ratio is kept between Debt and Equity 60% and 40%

Portfolio as on 2nd

May 2012

Table 5.1

SCHEME NAME

NAV as

on 2nd

May

Return Market

return

Excess

return

Rank % Rs Units

SBI MAGNUM

SECTOR FUNDS

UMBRELLA -

PHARMA –

GROWTH

49.57

23.09

19

4.09

2

0.2

300000

6052.05

SBI MAGNUM

SECTOR FUNDS

UMBRELLA -

EMERG BUSS

FUND – GROWTH

46.89

22.73

19

3.73

1

0.1

150000

3198.98

BIRLA SUN LIFE

MNC FUND –

GROWTH

230.02 24.28 19 5.28 3 0.3 450000 1956.35

RELIANCE

PHARMA FUND –

GROWTH

58.386

29.65

19

10.65 4 0.4 600000 10276.4

EQUITY 10 1500000

SUNDARAM BOND

SAVER -

INSTITUTIONAL

PLAN – GROWTH

34.752 250000 7193.83

RELIANCE

MONTHLY

INCOME PLAN –

GROWTH

23.43

250000

10670.0

SAHARA SHORT

TERM BOND FUND

– GROWTH

13.06 250000 19142.4



HDFC MONTHLY

INCOME PLAN -

LONG TERM PLAN

– GROWTH

24.35 250000 10266.9

DEBT 1000000

1000000

TOTAL

PORTFOLIO

2500000


2012

Table 5.2


15th

May

Rs Increase/

decrease

Revised on

May 15th

New units on

May 15th

SBI MAGNUM SECTOR

FUNDS UMBRELLA -

PHARMA – GROWTH

49.02

296671.37

-1.11

589319.41

12022.02

SBI MAGNUM SECTOR

FUNDS UMBRELLA -

EMERG BUSS FUND –

GROWTH

45.21

144625.72

-3.58

147329.85

3258.79

BIRLA SUN LIFE MNC

FUND – GROWTH

223.79 437811.93 -2.71 441989.56 1975.02

RELIANCE PHARMA

FUND – GROWTH

56.392 579508.79 -3.42 294659.71 5225.20

EQUITY 1458617.8 1473298.5

22481.03

SUNDARAM BOND


PLAN – GROWTH

34.98 251640.19 245549.76 7019.72

RELIANCE MONTHLY

INCOME PLAN –

GROWTH

23.22 247759.28 245549.76 10574.92

SAHARA SHORT TERM


13.1 250765.70 245549.76 18744.26

HDFC MONTHLY

INCOME PLAN - LONG


24.03 246714.58 245549.76 10218.47

DEBT 996879.75 982199.02



TOTAL PORTFOLIO 2455497.5

2455497.5

As on May 15th

2012 Portfolio has fallen, Debt and equity has fallen. Overall Portfolio has

been revised as Constant ratio Plan, fixed ratio of 60% equity and 40% debt. There Total

portfolio as on May 15th

2012 ie, Rs 24, 55,497.56 is allocated to equity 60% and Debt 40%

REVISED PORTFOLIO AS ON MAY 31st 2012

Table 5.3

SCHEME NAME NAV as

on 31st

May

RS Increase

decrease

Revised on

May 31st

New

units on

May 31st

SBI MAGNUM SECTOR

FUNDS UMBRELLA -

PHARMA – GROWTH

48.38

581625.32

-1.31

146810.42

3034.53

SBI MAGNUM SECTOR

FUNDS UMBRELLA -

EMERG BUSS FUND –

GROWTH

44.81 146026.34 -0.88 440431.27 9828.86

BIRLA SUN LIFE MNC

FUND – GROWTH

221.8 438059.27 -0.89 293620.85 1323.81

RELIANCE PHARMA FUND

– GROWTH

56.33 294335.74 -0.11 587241.69 10425.03

EQUITY 1460046 1468104.2

SUNDARAM BOND SAVER

- INSTITUTIONAL PLAN –

GROWTH

35.13 246602.71 244684.04 6965.10

RELIANCE MONTHLY


23.36 247030.25 244684.04 10474.49

SAHARA SHORT TERM


13.15 246486.97 244684.04 18607.15

HDFC MONTHLY INCOME

PLAN - LONG TERM PLAN

– GROWTH

24.14 246673.79 244684.04 10136.04

DEBT 986793.72 978736.16

TOTAL PORTFOLIO 2446840.3 2446840.3

As on May 31st 2012 Portfolio has fallen, Debt has increased and equity has fallen. Overall



Portfolio has been revised as Constant ratio Plan, fixed ratio of 60% equity and 40% debt. There

Total portfolio as on May 31st2012 ie, Rs 2446840.39 is allocated to equity 60% and Debt 40%

REVISED PORTFOLIO AS ON June 15th

2012

Table 5.4

SCHEME NAME

NAV as

on June

15th

Rs Increase/

decrease

Revised on

June 15th

New

units on

June 15th

SBI MAGNUM SECTOR

FUNDS UMBRELLA -

PHARMA – GROWTH

47.65 144595.22 -1.51 147806.2 3101.92

SBI MAGNUM SECTOR

FUNDS UMBRELLA -

EMERG BUSS FUND –

GROWTH

45.49 447114.90 1.52 591225 12996.81

BIRLA SUN LIFE MNC

FUND – GROWTH

223.8 296268.47 0.90 443418.7 1981.32

RELIANCE PHARMA

FUND – GROWTH

56.698 591078.10 0.65 295612.50 5213.81

EQUITY 1479056.6 1478062

SUNDARAM BOND


PLAN – GROWTH

35.28 245728.80 246343.75 6982.53

RELIANCE MONTHLY


23.47 245836.23 246343.75 10496.11

SAHARA SHORT TERM


13.21 245800.47 246343.75 18648.28

HDFC MONTHLY

INCOME PLAN - LONG


24.37 247015.33 246343.75 10108.48

DEBT 984380.84 985375.01

TOTAL PORTFOLIO 2463437.52 2463437.52

As on June 15th

2012 Portfolio has increased, Debt equity has increased. Overall Portfolio has

been revised as Constant ratio Plan, fixed ratio of 60% equity and 40% debt. There Total

portfolio as on June 15th

2012 ie, Rs 2463437.52is allocated to equity 60% and Debt 40%




2012

Table 5.5


29th June Rs


PHARMA – GROWTH

50.13 155499.00



46.86 609030.64

BIRLA SUN LIFE MNC FUND – GROWTH

232.85 461349.67

RELIANCE PHARMA FUND – GROWTH

58.478 304893.08

EQUITY 1530772.39

SUNDARAM BOND SAVER - INSTITUTIONAL

PLAN – GROWTH

35.38 247042.01

RELIANCE MONTHLY INCOME PLAN – GROWTH

23.58 247498.32

SAHARA SHORT TERM BOND FUND – GROWTH

13.26 247276.17

HDFC MONTHLY INCOME PLAN - LONG TERM

PLAN – GROWTH

24.55 248163.28

DEBT 989979.77


2012 2520752.17

CALCULATION OF RETURNS AS PER CONSTANT RATIO PLAN

Table 5.6

PORTFOLIO AS

ON MAY 2ND

2012

PORTFOLIO

AS ON JUNE

29TH

2012

Excess

Returns Returns %

25,00,000 2520752.17 20752.17

0.83%

Opting for Constant Ratio Plan would give return of 0.83% in the span of 2month



9.3 PORTFOLIO REVISION AS PER VARIABLE PLAN

A s p e r Va r i ab l e P l an , t h e r a t i o s a r e v a r i ed wh en ev e r t h e r e is a change in the

economic or market index. As on May 2nd

, Portfolio is divided into 60% equity 40% debt. In

Equity, Schemes are allocated on basis of comparing its returns with market returns. Scheme giving

higher returns are given more weightage

PORTFOLIO AS ON 2ND MAY 2012

Table 6.1

SCHEME NAME NAV as

on 2nd

May

Return Market

return

Excess

return

Rank % Rs Units

SBI MAGNUM SECTOR

FUNDS UMBRELLA -

PHARMA – GROWTH

49.57

23.09 19 4.09 2 0.2 300000 6052.05

SBI MAGNUM SECTOR

FUNDS UMBRELLA -

EMERG BUSS FUND –

GROWTH

46.89 22.73 19 3.73 1 0.1 150000 3198.98

BIRLA SUN LIFE MNC

FUND – GROWTH

230.02 24.28 19 5.28 3 0.3 450000 1956.35


– GROWTH

58.386 29.65 19 10.65 4 0.4 600000 10276.4

EQUITY 10 1500000

SUNDARAM BOND SAVER


GROWTH

34.752 250000 7193.83

RELIANCE MONTHLY


23.43 250000 10670

SAHARA SHORT TERM


13.06 250000 19142

HDFC MONTHLY INCOME

PLAN - LONG TERM PLAN

– GROWTH

24.35 250000 10266

DEBT 10,00,000





2012

Table 6.2

SCHEME NAME NAV as

on 15th

May

RS Increase/

decrease

Revised

on May

15th

New

units

on

May

15th

SBI MAGNUM SECTOR

FUNDS UMBRELLA -

PHARMA – GROWTH

49.02 296671.4 -1.11 40% 491099.51 10018.35

SBI MAGNUM SECTOR

FUNDS UMBRELLA -

EMERG BUSS FUND –

GROWTH

45.21 144625.7 -3.58 10% 122774.88 2715.658

BIRLA SUN LIFE MNC

FUND – GROWTH

223.79 437811.9 -2.71 30% 368324.63 1645.849

RELIANCE PHARMA

FUND – GROWTH

56.392 579508.8 -3.42 20% 245549.76 4354.337

EQUITY 1458618 1227749

SUNDARAM BOND

SAVER -

INSTITUTIONAL PLAN

– GROWTH

34.98 251640.2 306937.2 8774.648

RELIANCE MONTHLY

INCOME PLAN –

GROWTH

23.22 247759.3 306937.2 13218.66

SAHARA SHORT TERM

BOND FUND –

GROWTH

13.1 250765.7 306937.2 23430.32

HDFC MONTHLY

INCOME PLAN - LONG

TERM PLAN –

GROWTH

24.03

246714.6

306937.2 12773.08

DEBT

996879.8 1227749


2455498

As on May 15th

2012 Portfolio has fallen, Debt has fallen by 0.31% and equity has fallen by



2.75%. Therefore Overall Portfolio has been revised given equal allocation of Portfolio to Debt

and equity. There Total portfolio as on May 15th

2012 ie, 50% Debt Rs 1227749 and 40% equity

Rs 12, 27,749

REVISED PORTFOLIO AS ON MAY 31st 2012

Table 6.3

SCHEME NAME

NAV as

on 31st

May

RS Increase

decrease

rank Revised

on May

31st

New units

on May

31st

SBI MAGNUM

SECTOR FUNDS

UMBRELLA -

PHARMA –

GROWTH

48.38 484687.8 -0.01 0.1 98007.91 2025.79

SBI MAGNUM

SECTOR FUNDS

UMBRELLA -

EMERG BUSS

FUND – GROWTH 44.81 121688.6 -0.01 0.2 196015.82 4374.38

BIRLA SUN LIFE

MNC FUND –

GROWTH 221.8 365049.4 -0.01 0.3 294023.73 1325.63

RELIANCE

PHARMA FUND –

GROWTH 56.33 245279.8 0.00 0.4 392031.63 6959.55

EQUITY 1216706 980079.08

SUNDARAM

BOND SAVER -

INSTITUTIONAL

PLAN – GROWTH 35.13 308253.4 367529.66 10462

RELIANCE

MONTHLY

INCOME PLAN –

GROWTH 23.36 308787.8 367529.66 15733.3

SAHARA SHORT

TERM BOND

FUND – GROWTH 13.15 308108.7 367529.66 27949

HDFC

MONTHLY

INCOME PLAN - 24.14 308342.2 367529.66 15224.9



LONG TERM

PLAN – GROWTH

DEBT 1233492 1470118

TOTAL

PORTFOLIO

2450198 2450198

As on May 31st 2012 overall Portfolio has fallen, Debt has increased by 0.004% and equity has

fallen by 0.89%. Therefore Overall Portfolio has been revised given more allocation of

Portfolio to Debt 70% and equity 30%. There Total portfolio as on May 31st 2012 ie, 70% Debt

Rs 1470118.63 and 40% equity Rs 980079.08.\

REVISED PORTFOLIO AS ON JUNE 15th 2012

Table 6.4

SCHEME NAME

NAV as

on15th

June

Rs Increase

decrease

Revised on

May 31st

New units

on 15th

June

SBI MAGNUM SECTOR

FUNDS UMBRELLA -

PHARMA – GROWTH

47.65 96529.08 -1.51 0.1 147923.1 3104.37

SBI MAGNUM SECTOR

FUNDS UMBRELLA -

EMERG BUSS FUND –

GROWTH

45.49 198990.4 1.52 0.4 591692.3 13007.1

BIRLA SUN LIFE MNC

FUND – GROWTH

223.8 296675 0.90 0.3 443769.2 1982.88


– GROWTH

56.698 394592.7 0.65 0.2 295846.1 5217.93

EQUITY 986787.2 1479231

SUNDARAM BOND SAVER


GROWTH

35.28 369099 246538.4 6988.05

RELIANCE MONTHLY


23.47 369260.3 246538.4 10504.4

SAHARA SHORT TERM


13.21 369206.6 246538.4 18663

HDFC MONTHLY

INCOME PLAN - LONG

24.37 371031.4 246538.4 10116.5




DEBT 1478597 986153.8

TOTAL PORTFOLIO 2465384 2465384

As on June 15th 2012 overall Portfolio has increased, Debt has increased by 0.68% and equity

has increased by 0.57%. Therefore Overall Portfolio has been revised given more allocation of

Portfolio to equity 60% and Debt40% because equity is giving more returns than Debt.. There

Total portfolio as on May 31st 2012 ie Rs 24, 65,384, 40% Debt Rs 986153.8 and 60% equity

Rs 1479230.67

\




2012

Table 6.5

SCHEME NAME NAV as on 15th

June

Rs

SBI MAGNUM SECTOR FUNDS UMBRELLA –

PHARMA – GROWTH

50.13 155621.90

SBI MAGNUM SECTOR FUNDS UMBRELLA –


46.86 609511.98

BIRLA SUN LIFE MNC FUND – GROWTH 232.85 461714.29

RELIANCE PHARMA FUND – GROWTH 58.478 305134.05

EQUITY 1531982.21

SUNDARAM BOND SAVER – INSTITUTIONAL

PLAN – GROWTH

35.38 247237.25

RELIANCE MONTHLY INCOME PLAN –

GROWTH

23.58 247693.93

SAHARA SHORT TERM BOND FUND – GROWTH 13.26 247471.60

HDFC MONTHLY INCOME PLAN – LONG TERM

PLAN – GROWTH

24.55 248359.41

DEBT 990762.19


2012 2522744.40

CALCULATION OF RETURNS AS PER VARIABLE PLAN

Table 6.6

PORTFOLIO AS

ON MAY 2ND

2012

PORTFOLIO

AS ON JUNE

29TH

2012

Excess

Returns Returns %

25,00,000 2522744.40

22744.40

0.90%

Opting for Variable would give return of 0.90% in the span of 2months



9.4 CALCULATION OF PORTFOLIO RETURNS

Table 7

PLAN NAME RETURNS RANKINGS

CONSTANT RUPEE 0.73% 3

CONSTANT RATIO 0.83% 2

VARIABLE PLAN 0.90% 1

Variable Plan gives highest returns of 0.90% compared to other two plans in span of 2months

2nd

May 2012 to 29th

June2012 because in variable plan continous revision is done according to

market Fluctuation.

Therefore Null hypothesis of the project has been proved wrong through analysis done above.

Here in variable plan active management style is adopted where continous revision is required

to get higher returns. of 0.90%.



10 MUTUAL FUND COMPARISON

The Five mutual funds taken for comparison are open ended funds and equity in nature.

HDFC TOP 200 – GROWTH

Objective: To generate long term capital appreciation by investing in a portfolio of equities and

equity linked instruments drawn from the BSE 200 Index.

Type of Scheme Open Ended

Nature Equity

Option Growth

Inception Date Sep 11, 1996

Face Value (Rs/Unit) 10

MEAN STANDARD

DEVIATION SHARPE TREYNOR BETA

0.38 3.64 0.08 0.31 0.87

ICICI PRUDENTIAL FOCUSED BLUECHIP EQUITY FUND - INSTITUTIONAL -

GROWTH

Objective: Seeks to generate long-term capital appreciation and income distribution to unit holders

from a portfolio that is invested in equity and equity related securities of about 20 companies

belonging to the large cap


Nature Equity

Option Growth

Inception Date May 23, 2008


Minimum Investment (Rs) 10000000

Exit Load If redeemed bet. 0 Year to 1 Year; Exit load is 1%.

MEAN STANDARD

DEVIATION

SHARPE TREYNOR BETA

0.44 3.62 0.09 0.38 0.87



DSP BLACKROCK SMALL AND MIDCAP FUND - GROWTH

Objective: The primary investment objective is to seek to generate long term capital appreciation

from a portfolio that is substantially constituted of equity related securities

FRANKLIN INDIA BLUECHIP - GROWTH

Objective: Aims to achieve a high degree of capital appreciation through investments is well-

established, large size blue chip companies


Nature Equity

Option Growth

Inception Date Nov 14, 2006



Exit Load If redeemed bet. 0 Months to 12 Months; Exit load is 1%

Fund Manager Anup Maheshwari, Apoorva Shah .

Mean Standard

Deviation SHARPE TREYNOR BETA

0.49 3.74 0.10 0.44 0.87


Nature Equity

Option Growth




Exit Load If redeemed bet. 0 Months to 12 Months; Exit load is 1%

Fund Manager Sanjay Parekh , Shrey Loonkar, Sunil Singhania .

MEAN STANDARD

DEVIATION SHARPE TREYNOR BETA

0.36 3.40 0.07 0.31 0.81



RELIANCE BANKING FUND – GROWTH

Objective: The primary investment objective of the Scheme is to seek to generate continuous

returns by actively investing in equity and equity related or fixed income securities of

companies in the banking sector.


Nature Equity

Option Growth




Exit Load If redeemed bet. 0 Months to 12 Months; Exit load is

1%

Fund Manager Sanjay Parekh , Shrey Loonkar, Sunil Singhania .

Mean Standard

Deviation SHARPE TREYNOR BETA

0.52 4.63 0.09 0.49 0.84



RETURNS OF 5 MUTUAL FUNDS


Fig 5.1

ICICI PRUDENTIAL FOCUSED BLUECHIP EQUITY FUND

Fig 5.2

DSP BLACKROCK SMALL AND MIDCAP FUND - GROWTH

Fig 5.3

1 Month 3 Months 6 Months 1 Year 3 Years 5 YearsSince

Inception

RETURNS 3.45 -0.82 13.36 -6.97 10.19 10.37 20.67

-10-505

10152025

1 Month 3 Months 6 Months 1 Year 3 YearsSince

Inception

RETURNS 3.46 -0.42 8.66 -3.06 14.12 12.89

-5

0

5

10

15

1 Month 3 Months6

Months1 Year 3 Years 5years

Since Inception

RETURNS 0.43 -1 18.11 -6.36 16.44 7.21 9.21

-10

-5

0

5

10

15

20



FRANKLIN INDIA BLUECHIP – GROWTH

Fig 5.4


Fig 5.5

1 Month 3 Months6

Months1 Year 3 Years 5years

Since Inception

RETURNS 6.7 4.22 28.35 -5.84 16.08 15.93 28.22

-10

-5

0

5

10

15

20

25

30

35

1 Month 3 Months 6 Months 1 Year 3 Years 5yearsSince

Inception

RETURNS 5.14 0.26 12.06 -2.09 10.73 8.02 22.44

-5

0

5

10

15

20

25



SHARPE RATIO

Table 8

SCHEMES 2011-2012


0.08

ICICI PRUDENTIAL FOCUSED BLUECHIP EQUITY

FUND - INSTITUTIONAL I – GROWTH

0.09

DSP BLACKROCK SMALL AND MIDCAP FUND –

GROWTH

0.10


0.07


0.09

The above table shows the Sharpe ratio of various schemes for the financial year 2011-12,

Sharpe ratio is a measure of the excess return per unit of risk in an investment asset of a trading

strategy. The Sharpe ratio is used to characterize how well the return of an asset compensates

the investor for the risk taken.

Among them, DSP BLACKROCK SMALL AND MIDCAP FUND – GROWTH was

considered as the best one with a ratio of 0.10. The least performance was shown by

FRANKLIN INDIA BLUECHIP – GROWTH which has a ratio of 0.07.

The performance of all selected mutual fund schemes was really low during the financial year

2011-2012.



TREYNOR RATIO

Table 9

SCHEMES 2011-2012


0.31



0.38


GROWTH

0.44


0.31


0.49

Treynor’s ratio measures the fund’s performance in relation to the market’s performance. The

table shows the Treynor’s ratio of selected mutual fund schemes for financial year 2011-12.

Among them RELIANCE BANKING FUND – GROWTH was top performing fund with a

maximum Treynor ratio of 0.49. It means that the scheme has a better risk adjusted performance

as compared to other schemes.

The least performing fund was HDFC TOP 200 – GROWTH and FRANKLIN INDIA

BLUECHIP – GROWTH with Treynor ratio of 0.31 which shows that the fund is having a

low risk adjusted performance.



STANDARD DEVIATION

Table 9

SCHEMES 2011-2012


3.64



3.62


GROWTH

3.74


3.40


4.63

Standard Deviation of a fund depicts, that how much the returns of the fund have deviated from

the mean level. The higher the value of standard deviation, the greater will be the volatility in

the fund's returns. In financial year 2011-12 , RELIANCE BANKING FUND – GROWTH

had standard deviation of 4.63% meaning that the fund's return fluctuated in either direction

(up or down) by 4.63% from its average return ,whereas FRANKLIN INDIA BLUECHIP –

GROWTH showed minimum deviation of 3.40%.



RANKINGS Table 10

RANK SHARPE RATIO TREYNOR RATIO

1

DSP BLACKROCK SMALL AND

MIDCAP FUND – GROWTH

RELIANCE BANKING FUND –

GROWTH

2

ICICI PRUDENTIAL FOCUSED

BLUECHIP EQUITY FUND –

INSTITUTIONAL I – GROWTH

DSP BLACKROCK SMALL AND

MIDCAP FUND – GROWTH

3

RELIANCE BANKING FUND –

GROWTH

ICICI PRUDENTIAL FOCUSED

BLUECHIP EQUITY FUND –

INSTITUTIONAL I – GROWTH

4 HDFC TOP 200 – GROWTH


5

FRANKLIN INDIA BLUECHIP –

GROWTH

FRANKLIN INDIA BLUECHIP –

GROWTH

Table 11

Rank STANDARD DEVIATION

1 RELIANCE BANKING FUND – GROWTH

2


GROWTH

3 HDFC TOP 200 – GROWTH

4

ICICI PRUDENTIAL FOCUSED BLUECHIP

EQUITY FUND - INSTITUTIONAL I – GROWTH

5 FRANKLIN INDIA BLUECHIP – GROWTH



LIMITATION TO THE STUDY

Although the report has been made on the relevant facts and figures but certain problems have

been faced, which are as follows: -

The respondents were sometimes biased while answering the questions

The study only covers the particular area of Borivali and Dahisar

The time constraint was one of the major problems.

To get an insight in the process of portfolio allocation and deployment of funds by

Fund manager is difficult.

The portfolio of mutual fund investments can change according to the market Conditions. This

project is carried out and evaluated on the basis of the market conditions from 1st May 2012 to

31st June 2012

SCOPE OF THE STUDY

Portfolio including other Financial Assets.

Portfolio Managers should try to bring in untapped market of age group of 22 to 35 age as this

group is wide and also earn high income with limited Liability



FINDINGS

Active Management of funds are far better approach than passive management of Funds because

Portfolio’s are continuously checked and revised to take into account the effect market fluctuations

on Investors Portfolio and take appropriate measure.

Variable plan in portfolio revision gives higher returns in short term period

Beta is useful tool in measuring risk in mutual funds.

Less affordable by Middle class Investor as minimum investment needed is 25 lakhs.

Sharpe and Treynor ratio are mostly preferred to ascertain the risk and values of investment

Portfolio Diversification is necessary in order to manage the risk

Portfolio created as per Investor class and risk is more preferable.

SUGGESTIONS

Portfolio managers should reanalyze their portfolios as similar funds of different companies

have better performance than their competitors.

Before investing the past performance of several years should be considered and consistency

should be checked rather going for higher returns in recent period

Active management style should be adopted for short term period



MY LEARNING

I have learnt many things analyzing the stocks and thereby deducing about their performance and

thus designing the portfolio on the basis of their performances.

Revising Portfolio as per different types of plans

Comparison of mutual funds with performance measures

I learnt about mutual funds as well as other products like Life insurance, Health Insurance, IPO

and transactions and some financial services offered by Acensure Financial Solutions Pvt. Ltd



CONCLUSION

After studying & analyzing different portfolio’s the following conclusions can be made:

Winning with stocks means performing at least as well as a major market index over the long

haul. If one can sidestep the common investor mistakes, then one has taken the first and

biggest step in the right direction.

Portfolio Management services in mutual funds reduces risk without sacrificing returns.

PMS involves a proper investment decision with regards to what to buy and sell. It involves

proper money management. It is also known as Investment Management

If you wish to reap substantial benefits from your various investments & want your small pile

of investment to grow, the right portfolio management service (PMS) is a prerequisite for it

Diversified stock portfolios have offered superior long term inflation protection.

To understand stock funds, one needs to be familiar with the characteristics of the different

types of companies they hold.

PMS could end up being a well paying affair if you get this one right. So if you are ready to

put your nest egg & step into this world, put each step with a fine-toothed comb.



REFERENCES

WEBLIOGRAPHY

http://www.amfiindia.com/showhtml.aspx?page=mfconcept

http://finance.wikia.com/wiki/Portfolio_Management_Services_-

_a_customized_investing_option_for_HNI_individuals

http://www.mbaknol.com/investment-management/portfolio-investment-process/

http://www.mutualfundsindia.com/

http://www.valueresearchonline.com/

http://www.moneycontrol.com/mf/portfolio/portupmore.php

BIBLIOGRAPHY

Mutual funds in India by Nalini Prava Tripathy

http://www.amfiindia.com/showhtml.aspx?page=mfconcept

http://finance.wikia.com/wiki/Portfolio_Management_Services_-_a_customized_investing_option_for_HNI_individuals

http://finance.wikia.com/wiki/Portfolio_Management_Services_-_a_customized_investing_option_for_HNI_individuals

http://www.mbaknol.com/investment-management/portfolio-investment-process/

http://www.mutualfundsindia.com/

http://www.valueresearchonline.com/

http://www.moneycontrol.com/mf/portfolio/portupmore.php



ANNEXURE

What is your current age?

18 to 35 years old

35 to50 years old

Above 50 years old

What percentage of monthly income can be invested?

0 to 10%

11% to 20%

21% to 30%

More than 30%

I currently have no income

When do you expect to liquidate your investment?

Less than 1 year

1 to 2 years

3 to 5 years

6 to 7 years

More than 7 years

In order to achieve high returns I am willing to choose high risk investments.

Strongly agree

Neutral

Strongly disagree

What is your expected rate of return from your investments?

Potential return of 6% per annum

Potential return of 10% to 15% p. a

Potential return of more than 15% per annum

I would start to worry about my investments if my portfolio value falls

Less than 5% per annum

5%-10% per annum

10%-20% per annum

20%-30% per annum

More than 30% per annum



Maximum allocation in your current portfolio pertains to

Savings and fixed deposits

Bonds

Equities

Mutual Funds

Derivatives options, swaps and futures

I prefer to keep capital safe rather than have high returns

Strongly agree

Neutral

Strongly disagree

portfolio management services in mutual funds

Economy & Finance