Portfolio management

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Portfolio management

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Abstract

The financial market plays a crucial role in the economic development of the country by facilitating the allocation of scarce resources. The allocation function of financial market essentially involves the allocation of resources. One of the proper ways of the allocation of resources is portfolio. Portfolio analysis considers the determination of future risk and return in holding various blends of individual securities. Portfolio analysis includes analyzing the range of possible portfolio that can be constituted from a given set of securities.

Portfolio management and investment decision as a concept became familiar with the conclusion of Second World War when things in the stock market had liberally ruined the fortunes of individuals, companies and even Government.

It was then discovered that investing in various scripts instead of pouring all the money in a single security yielded better return with low risk percentage. The credit goes to HARTMERKOWITZ who is known to have pioneered the concept of combining high yielded securities with these low but steady yielding securities to achieve optimum correlation coefficient of shares.

Introduction.
What is portfolio management?
Meaning and definition of portfolio management.
Need and importance.
Objectives.
Scope of the study.
1. Primary data.
2. Secondary data.
Limitations.
Industry profile.
1. What is insurance?
2. Insurance industry.
3. History.
4. Insurance regulatory authority.
Riders and options.
1. Personal accident benefits.
2. Terminal illness.
3. Dreaded disease benefit.
4. Major surgical assistance.
5. Waviver of premium.
6. Hike sumassurance.
Taxbenefits.
Benefits of insurance.
Company profile.
1. Background.
2. Business objectives.
3. Organizational goals.
4. Achievements.
5. Future.
HDFC Standard Life Insurance Company Ltd.
Accolades and recognation.
1. Financial expertise.
2. Range of solutions.
3. Track record so far.
4. Products.
5. Customer service.
Standard Life Assurance Company.
1. About the products.
A study of information systems adopted at HDFC to cater to the needs of customers.
1. Impact of liberalization.
2. Customer service.
3. Production innovation.
4. Information technology and insurance.
Some areas of future growth in HDFC.
1. Life insurance.
2. Health insurance.
3. Pension.
Topic of the study.
1. Portfolio management.
2. Importance of portfolio management.
3. Objectives of portfolio management.
Portfolio management in India.
Who can be a portfolio manager?
1. Functions of portfolio manager.
2. Methods of operations.
3. Returns on portfolio.
4. Risk-return analysis.
SEBI guidelines to the portfolio managers.
Portfolio selection.
1. Markowitz model.
2. The specific model.
3. Efficient frontier.
Concept of efficient portfolio.
Modification to the efficient frontier.
Capital asset pricing model.
Dow Jones theory.
Random Wald Theory.
Assumptions.
Data analysis and interpretation.
Average returns of the company.
Standard deviation of the company.
Calculations of correlations.
Correlation between HDFC and Satyam.
Correlation between ITC and Satyam.
Portfolio weights.
Calculation of portfolio risks.
Calculation of portfolio returns.
Suggestions.

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Extract

[...] Thirdly, the evaluation of portfolio management performance is to be done by stage manager in terms of targets set for risk and return and changes in the portfolios are to be affected to meet the changing conditions, this is known as portfolio evaluation. OBJECTIVES: Port folio management services help investors to make a wise choice between alternative investments without a post trading shares. This service renders optimum return to the investors by proper selection and continuous shifting of portfolio from one scheme to another scheme or from, one plan to other plan within the same scheme. [...]

[...] According to his research study a low correlation level between securities in the portfolio will show less risk. According to hic, investment in a large number of securities is not the right method of investment. It is the right kind of security, which brings the maximum results. EFFICIENT FRONTIER To construct an efficient portfolio, we have to conceptualize. Various combinations of investments in a basket and designate them as portfolio 1 and n. The expected returns from these portfolios are too worked out. [...]

[...] There is improvement is response and turnaround times in specific areas such as delivery of first policy document, premium notice, final maturity payment, settlement of claims etc. how ever, there is long way to go and various customers surveys indicate that the standards are still below customers expectation levels. TOPIC OF THE STUDY PORTFOLIO MANAGEMENT: Portfolio is a combination of assets or it consists of collection of securities. These holdings are the result of individual preferences, decisions of the holders regarding risk, return and a host of other considerations. Portfolio management concerns the construction and maintenance of a collection of investment. [...]

[...] In equilibrium each security or portfolio lies on the SML. In the above figure that the return expected from portfolio or investment is a combination of risk free return plus risk premium. An investor will come forward to take risk only if the return on investment also includes risk premium. The CAPM has shown the risk and return relationship of a portfolio in the following formula. E = Rr + BI (Rm Rr) Where E = Expected rate of return on any individual security (or portfolio of security) Rr = Risk free rate of return Rm = Expected rate of return on the market portfolio. [...]

[...] In financial year 20003-04 its assets under management crossed Rs cr. As at march outstanding deposits stood at Rs crores. The depositor base now stands at around 1 million depositors. Rated ‘AAA' by CRISIL and ICRA for the 10th consecutive year Stable and experienced management High service standards Awarded the economic times corporate citizen of the year award for its long-standing commitment to community development. Presented the ‘Dream home' award for the best housing finance provider in 2004 at the third annual outlook money awards. [...]

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