Performance Evaluation of Portfolio

Presentation on IAPM Topic – Portfolio Performance Evaluation

PORTFOLIO EVALUATION
Last step in the process of Portfolio Management
The stage where we examine to what extent the objective has been achieved
The investor tries to find out how well the portfolio has performed
A study of the impact of investment decisions
Without PE, PM would be incomplete

Need for Evaluation
Evaluation is an appraisal of Performance
Whether Investment activity is carried out by individual investors/throughMFs & investment Co,different situations arise where PE becomes imperative. These situations are,

Self evaluation
Evaluation of Portfolio Managers
Evaluation of Mutual Funds

Self evaluation
Individual investors undertake the investment activity
They construct & manage their own Portfolio
The investor himself evaluates the performance of his Portfolio
To ID the mistakes committed
It enables the investor to improve his skills & achieve better performance in future

Evaluation of Portfolio Managers
A MF/investment Co creates different Portfolios with different objectives aimed at different sets of investors
Each Portfolio may be entrusted to different proffessional Portfolio Managers-responsible for the Investment decisions regarding…
Evaluate the performance of each Portfolio& the performance of concerned Portfolio Managers

Evaluation of Mutual Funds
Stiff competition for fund mobilisation
Offering Attractive returns,Min.risk,High safety & Prompt liquidity
Investors/Orgns intersted in placing their funds with MFs like to know their comparative performance
To select the BEST MF/Investment Co

Evaluation Perspective
Transaction View
Security View
Portfolio View

Transa ction View
Investor may evaluate every transaction of Purchase/Sale of securities
Transaction is evaluated as regards its Correctness & Profitability
Security View
• Evaluate the Profitability of holding each security

Portfolio View
A Portfolio is a combination carefully selected securities
Combined in a specific way to reduce risk of investment to the Min.
Investor may attempt to evaluate the performance of portfolio as a whole without examining the securities individually
Consider Return along with Risk involved
Risk is best defined in the Portfolio level
The BEST Perspective for evaluation

Portfolio Performance Evaluation
Addresses issues whether the performance was superior/inferior
Whether the performance was due to skill/luck

THANK YOU

Performance Evaluation of Portfolio

by AnoopSujatha on Oct 18, 2009

Accessibility

Categories

Upload Details

Usage Rights

1 Embed 28

Statistics

Performance Evaluation of Portfolio — Presentation Transcript