Portfolio management

Basics about Portfolio Management

1. By-Prof. M.A.Tamboli
Mob-9766010560
[email protected]
PORTFOLIO MANAGEMENT
1 Prof. M.A.Tamboli

2. Portfolio
Aportfolioiscollectionofasset.Inportfolio
managementtheseassetsarefinancialin
nature
AccordingtoSEBIportfolioisthetotal
holdingsofsecuritiesbelongingtoone
person.
Prof. M.A.Tamboli2

3. Portfolio Manager
Theportfoliomanagerinvestthemoneyid
diverseassetswiththeaimofmaximizing
returnandminimizingtherisk.
Portfoliomanagermeansanypersonwho
pursuanttoacontractwithaclientundertakes
themanagementofaportfolioofsecuritiesor
fundoftheclient
Prof. M.A.Tamboli3

4. Functions of Portfolio Management
1.Toframeinvestmentstrategyandselect
investmentmix
2.Hedgeagainstinflationandalsooptimize
returns.
3.Tomaketimelydecisionaboutselland
purchaseofsecurities.
4.Tomaximizeaftertaxreturnbyinvesting
partoftheportfoliointaxsavings
investments.
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5. 1.THE DISCRETIONARY PORTFOLIO
MANAGEMENT SERVICE:
Theclientgiveshismoneyforinvestmenttothe
manager,whohandlethepaperwork,makesall
investmentdecisionandgivesagoodreturnto
theinvestorandchargesafeefortheservice
rendered.
Prof. M.A.Tamboli5
Types of Portfolio Management

6. Types of Portfolio Management
2. THE NON-DISCRETIONARY PORTFOLIO
MANAGEMENT SERVICE:
Inthistypemanagerfunctionsasacounselor,but
investorisfreetoacceptorrejectthe
manager’sadvise.
Thepaperworkisalsoundertakenbythe
managerforaservicecharge.
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7. Qualities of Portfolio Manager
1.Sound general knowledge
2.Analytical ability
3.Marketing skills
4.experience
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8. Steps in Portfolio Management
Specification and quantification of investor objective, constraints and preference in the policy
statement
Determination of capital market expectation for the economy, market sectors, industries and individual securities
Allocation of assets and selection of individual securities
Performance measurement to ensure that investors objectives are attained
Responding to changes in investors objectives
Rebalancing the portfolio whenever necessary
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9. Factors That Influence Portfolio
Decisions
Investors Characteristics
Liquidity needs
Tax considerations
Safety of principal
Assurance of income
Investment risk
Interest rate risk
Business and market risk
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10. Code of Conduct for Portfolio
Manager
1.He shall observe high standards of integrity
and fairness in all dealings.
2.The client’s money should be deployed as
soon as possible and money due and payable
to client should be paid forthwith.
3.He shall render at all time high standards of
services.
4.Ensure proper care and exercise independent
professional judgement
Prof. M.A.Tamboli10

11. Code of Conduct for Portfolio
Manager
5.Heshallnotinvolvedinunfaircompetition.
6.Heshouldnotdiscloseanyconfidential
informationabouthisclient
7.Aportfoliomanagershallnotbeapartyto:
•Creationoffalsemarketinsecurities
•Pricemanipulationofsecurities
•Passingofpricesensitiveinformationtoany
participantsinthemarket.
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12. Thank You !!!
Prof. M.A.Tamboli12