Portfolio performance evaluation is the last step in the portfolio management process where the investor examines how well the portfolio objectives have been achieved. It allows the investor to evaluate their own portfolio performance to identify mistakes and improve. Portfolio managers of mutual funds and investment companies also undergo evaluation to assess the performance of the portfolios they manage and their skills. Investors in mutual funds want to evaluate fund performance to select the best performing and lowest risk funds. Portfolio evaluation looks at performance from a transaction, security, or portfolio level perspective with the portfolio level being the best since it considers overall return and risk.

1. Presentation on IAPM Topic – Portfolio Performance Evaluation

2. 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

3. 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,

4. Self evaluation Evaluation of Portfolio Managers Evaluation of Mutual Funds

5. 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

6. 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

7. 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

8. Evaluation Perspective Transaction View Security View Portfolio View

9. 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

10. 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

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

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