19-02-2013, 11:37 AM
A STUDY ON PORTFOLIO MANAGEMENT USING MARKOWITZ THEORY AT INDIA INFOLINE
A STUDY ON PORTFOLIO.doc (Size: 376.5 KB / Downloads: 41)
INTRODUCTION:
The financial market is the driver of the economic growth and development of any country. A sound financial market can take the country to the apex. Financial resources were by allocating the resources through one of the ways such as portfolios, which are combinations of various securities. Portfolio analysis includes analyzing the range of possible portfolios that can be constituted from a given set of securities.
A combination of securities with different risk- return characteristics will constitute the portfolio of the investor. A portfolio is a combination of various assets and/or instruments of investments. The portfolio is also built up out of the wealth or income of the investor over a period of time with a view to suit his risk and return preferences to that of the portfolio that he holds. The portfolio analysis is an analysis of the risk-return characteristics of individual securities in the portfolio and changes that may take place in combination with other securities due to interactions among themselves and impact of each one of them on others.
As individuals are becoming more and more responsible for ensuring their own financial future, portfolio or fund management has taken on an increasingly important role in banks ranges of offerings to their clients.
INDUSTRY PROFILE:
Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich heritage. Popularly known as "BSE", it was established as "The Native Share & Stock Brokers Association" in 1875. BSE has played a pioneering role in the Indian Securities Market - one of the oldest in the world. Much before actual legislations were enacted, BSE had formulated comprehensive set of Rules and Regulations for the Indian Capital Markets. It also laid down best practices adopted by the Indian Capital Markets after India gained its Independence.
BSE is the first stock exchange in the country to obtain permanent recognition in 1956 from the Government of India under the Securities Contracts (Regulation) Act, 1956. The base year of SENSEX is 1978-79. From September 2003, the SENSEX is calculated on a free-float market capitalization methodology. The "free-float Market Capitalization-Weighted" methodology is a widely followed index construction methodology on which majority of global equity benchmarks are based.
The Exchange has a nation-wide reach with a presence in 417 cities and towns of India. The systems and processes of the Exchange are designed to safeguard market integrity and enhance transparency in operations. During the year 2004-2005, the trading volumes on the Exchange showed robust growth.
COMPANY PROFILEL:
About Us
We are a one-stop financial services shop, most respected for quality of its advice, personalized service and cutting-edge technology.
India Infoline Group
The India Infoline group, comprising the holding company, India Infoline Limited and its wholly-owned subsidiaries, straddle the entire financial services space with offerings ranging from Equity research, Equities and derivatives trading, Commodities trading, Portfolio Management Services, Mutual Funds, Life Insurance, Fixed deposits, GoI bonds and other small savings instruments to loan products and Investment banking. India Infoline also owns and manages the websites www.indiainfoline.com and www.5paisa.com
The company has a network of 596 branches spread across 345 cities and towns. It has more than 500,000 customers.
NEED FOR PORTFOLIO MANAGEMENT:
The Portfolio Management deals with the process of selection securities from the number of opportunities available with different expected returns and carrying different levels of risk and the selection of securities is made with a view to provide the investors the maximum yield for a given level of risk or ensure minimum risk for a level of return.
Portfolio Management is a process encompassing many activities of investment in assets and securities. It is a dynamics and flexible concept and involves regular and systematic analysis, judgment and actions. The objectives of this service are to help the unknown investors with the expertise of professionals in investment Portfolio Management. It involves construction of a portfolio based upon the investor’s objectives, constrains, preferences for risk and return and liability. The portfolio is reviewed and adjusted from time to time with the market conditions. The evaluation of portfolio is to be done in terms of targets set for risk and return. The changes in portfolio are to be effected to meet the changing conditions.
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 towards the assembly of proper combinations held together will give beneficial result if they are grouped in a manner to secure higher return after taking into consideration the risk element.