- The document describes the portfolio construction and management approach of Greenback Capital Advisors Private Limited fund.
- The fund aims to achieve high returns over the long run while minimizing risk through a combination of large-cap stocks (risky assets) and government bonds (riskless asset).
- Currently, the risky asset portfolio consists of 10 large-cap stocks from different sectors assigned weights based on their historical performance. The riskless asset is a government bond.
- An example investor profile is provided along with the fund's performance over 2 years, showing inflation-adjusted returns of 10.53%, meeting the investor's goals.
Assessment of Security Analysis and Portfolio Management in Indian Stock Marketijtsrd
A portfolio is an assortment of protections. Since it is infrequently alluring to contribute the whole assets of an individual or a foundation in solitary security, it is basic that each security is seen in the portfolio setting. Consequently, it appears to be sensible that the normal return of every one of the securities contained in the portfolio. Portfolio investigation thinks about the assurance of future danger and returns in holding different mixes of individual protections. Security Analysis in both customary sense and current sense includes the projection of future profit, or income streams, a figure of the offer cost later on, and assessing the natural estimation of security dependent on the conjecture of income or profits. The current examination is conscious to inspect the Risk and Return Analysis of Selected Stocks in India. Danger might be characterized as the opportunity of varieties in real return. Return is characterized as the addition in the estimation of speculation. The profit for a venture portfolio causes a speculator to assess the monetary presentation of the venture. Dr. Nalla Bala Kalyan | Dr. B. M. Raja Sekhar "Assessment of Security Analysis and Portfolio Management in Indian Stock Market" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-2 , February 2021, URL: https://www.ijtsrd.com/papers/ijtsrd38374.pdf Paper Url: https://www.ijtsrd.com/management/risk-management/38374/assessment-of-security-analysis-and-portfolio-management-in-indian-stock-market/dr-nalla-bala-kalyan
Assessment of Security Analysis and Portfolio Management in Indian Stock Marketijtsrd
A portfolio is an assortment of protections. Since it is infrequently alluring to contribute the whole assets of an individual or a foundation in solitary security, it is basic that each security is seen in the portfolio setting. Consequently, it appears to be sensible that the normal return of every one of the securities contained in the portfolio. Portfolio investigation thinks about the assurance of future danger and returns in holding different mixes of individual protections. Security Analysis in both customary sense and current sense includes the projection of future profit, or income streams, a figure of the offer cost later on, and assessing the natural estimation of security dependent on the conjecture of income or profits. The current examination is conscious to inspect the Risk and Return Analysis of Selected Stocks in India. Danger might be characterized as the opportunity of varieties in real return. Return is characterized as the addition in the estimation of speculation. The profit for a venture portfolio causes a speculator to assess the monetary presentation of the venture. Dr. Nalla Bala Kalyan | Dr. B. M. Raja Sekhar "Assessment of Security Analysis and Portfolio Management in Indian Stock Market" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-2 , February 2021, URL: https://www.ijtsrd.com/papers/ijtsrd38374.pdf Paper Url: https://www.ijtsrd.com/management/risk-management/38374/assessment-of-security-analysis-and-portfolio-management-in-indian-stock-market/dr-nalla-bala-kalyan
noorulhadi Lecturer at Govt College of Management Sciences, noorulhadi99@yahoo.com
i have prepared these slides and still using in mylectures, Reference: Portfolio management by S kevin and online sources
The activities of large, internationally active financial institutions have grown increasingly
Complex and diverse in recent years.This increasing complexity has necessarily been accompanied by a process of innovation in how these institutions measure and monitor their exposure to different kinds of risk. One set of risk management techniques that has attracted a great deal of attention over the past several years, both among practitioners and regulators, is "stress testing", which can be loosely defined as the examination of the potential effects on a firm’s financial condition of a set of specified changes in risk factors, corresponding to exceptional but plausible events. A concept of security analysis and portfolio management services has been very famous and old among various institutions. This report represents practices application of portfolio management techniques in the portfolio section. Portfolio management is an integrated and exhaustive of fundamental and technical methods which are used for calculation of annul return and earnings per share for the portfolio. Modern portfolio theory suggests that the traditional approach to portfolio analysis, selection and management may yield less than optimum results. Hence a more scientific approach is required, based on estimates of risk and return of the portfolio and the attitudes of the investor toward a risk-return trade-off stemming from the analysis of the individual Securities.
Analysis and explanation of various investment options in Indiaumang22
To highlight key features of Investment avenue.
To examine knowledge and problem of available investment avenues.
To find the main bases of different investment avenues, an investor thinks before investing.
This deck consists of total of seventy slides. It has PPT slides highlighting important topics of Investment Portfolio Management Power Point Presentation Slides . This deck comprises of amazing visuals with thoroughly researched content. Each template is well crafted and designed by our PowerPoint experts. Our designers have included all the necessary PowerPoint layouts in this deck. From icons to graphs, this PPT deck has it all. The best part is that these templates are easily customizable. Just click the DOWNLOAD button shown below. Edit the colour, text, font size, add or delete the content as per the requirement. Download this deck now and engage your audience with this ready made presentation.
As part of my internship I worked at Shriram Fortune Solutions Limited.The title of my internship project was Portfolio Management. Here I'm sharing my Internship presentation
this power point includes some important topics in the stock market like ( criteria to invest on long term , volatility , stock market stages ,reducing risk )
noorulhadi Lecturer at Govt College of Management Sciences, noorulhadi99@yahoo.com
i have prepared these slides and still using in mylectures, Reference: Portfolio management by S kevin and online sources
The activities of large, internationally active financial institutions have grown increasingly
Complex and diverse in recent years.This increasing complexity has necessarily been accompanied by a process of innovation in how these institutions measure and monitor their exposure to different kinds of risk. One set of risk management techniques that has attracted a great deal of attention over the past several years, both among practitioners and regulators, is "stress testing", which can be loosely defined as the examination of the potential effects on a firm’s financial condition of a set of specified changes in risk factors, corresponding to exceptional but plausible events. A concept of security analysis and portfolio management services has been very famous and old among various institutions. This report represents practices application of portfolio management techniques in the portfolio section. Portfolio management is an integrated and exhaustive of fundamental and technical methods which are used for calculation of annul return and earnings per share for the portfolio. Modern portfolio theory suggests that the traditional approach to portfolio analysis, selection and management may yield less than optimum results. Hence a more scientific approach is required, based on estimates of risk and return of the portfolio and the attitudes of the investor toward a risk-return trade-off stemming from the analysis of the individual Securities.
Analysis and explanation of various investment options in Indiaumang22
To highlight key features of Investment avenue.
To examine knowledge and problem of available investment avenues.
To find the main bases of different investment avenues, an investor thinks before investing.
This deck consists of total of seventy slides. It has PPT slides highlighting important topics of Investment Portfolio Management Power Point Presentation Slides . This deck comprises of amazing visuals with thoroughly researched content. Each template is well crafted and designed by our PowerPoint experts. Our designers have included all the necessary PowerPoint layouts in this deck. From icons to graphs, this PPT deck has it all. The best part is that these templates are easily customizable. Just click the DOWNLOAD button shown below. Edit the colour, text, font size, add or delete the content as per the requirement. Download this deck now and engage your audience with this ready made presentation.
As part of my internship I worked at Shriram Fortune Solutions Limited.The title of my internship project was Portfolio Management. Here I'm sharing my Internship presentation
this power point includes some important topics in the stock market like ( criteria to invest on long term , volatility , stock market stages ,reducing risk )
6 reasons why companies choose IT outsourcingIntetics
Companies can greatly benefit from IT outsourcing. How do businesses benefit from outsourcing things such as software development? Here's a list of 6 top reasons companies outsouce, researched & presented by Intetics, The Remote In-Sourcing Company, specializing in custom software development and geospatial services.
Why do companies outsource?
- 66% of companies saw increased flexibility in 2011 because of outsourcing activities
- 60% outsource because of growth
- 50% of companies outsource for cost-effectiveness — both long-term and short-term
- majority of companies (35%) want new innovations for tools and technologies, 16% want better processes, and 12% want automation innovations when they outsource
- 39% of companies outsource to get access to new skills
- 25% of companies outsource to get access to new markets
Read our white paper to learn more about reason to outsorce and outsourcing models - http://intetics.com/white-papers/why-and-what-do-companies-outsource/
I have given this presentation at the Amsterdam Business School, University of Amsterdam. It is a practical introduction for Master students in Financial Markets about the importance of Risk Management and the tools thereof.
Class assignment on an introduction to corporate finance which includes the following topics-
1. What is corporate finance?
2. Finance in the organizational structure of a firm
2.1 organization of finance function
2.2 financial manager
3. Finance functions
3.1 executive finance function
3.2 routine finance function
4. Goals of corporate finance
4.1 profit maximization
4.2 limitations of profit maximization
4.3 wealth maximization
4.4 limitations of wealth maximization
5. Corporate finance and related disciplines
5.1 relationship with economics
5.2 relationship with accounting
5.3 relationship with mathematics
6. The agency problem
6.1 agency
6.2 agency problems between shareholders and managers
6.3 resolving conflicts between shareholders and managers
6.4 agency problems between shareholders and creditors
6.5 resolving conflicts between shareholders and creditors
7. Development of corporate finance
Hope you guys find it helpful.
The current situation of overnight demonetisation of 500 and 1000 Rupee notes has created havoc in the country.
In one of the historical reforms of the economy of India, Rs 500 and Rs 1,000 notes were banned effective on 9th November , Tuesday midnight. This was one of the boldest movements by the Government of India.Overall, this scheme is going to impact the businesses, the common man, and financial institutions – all at some level or the other.
Why Mutual Fund
Sahi Hai?How do you get the Retu
rns in
Mutual Funds?
What is Systematic
Investment Plan (SIP)
in Mutual Fund ?
Nifty started with a dull note at 16887, on 3rd October 2022 but closed at 18012
SBI Emerging Business Fund: An Equity Mutual Fund Scheme - Nov 17SBI Mutual Fund
SBI Emerging Business Fund focuses on emerging businesses and invests in companies that are considered emergent. It has the flexibility to invests across market caps. SBI Emerging Business Fund may invests into large, mid and/or small cap stocks in any proportion based on the market conditions making the most of various market phases. Visit SBI Mutual Fund to know more this fund at https://www.sbimf.com/en-us/equity-schemes/sbi-emerging-businesses-fund
Looking for investment in small cap funds then L&T emerging businesses fund will be the best choice you will make. Before investing your money know about this scheme in detail with the help of this presentation.
SBI Magnum Balanced Fund: An Hybrid Mutual Fund Scheme - Sep 17SBI Mutual Fund
SBI Magnum Balanced Fund aims to provide investors long term capital appreciation, along with the liquidity of an open-ended mutual fund scheme by investing in a mix of debt and equity funds. The balanced mutual fund scheme will invest in a diversified portfolio of equities of high growth companies and balance the risk through investing the rest in a relatively safe portfolio of debt funds. To know more about SBI Magnum Balanced Fund, please visit https://www.sbimf.com/en-us/hybrid-schemes/sbi-magnum-balanced-fund
SBI Magnum Balanced Fund: Balance Between Growth And Stability - Feb 2016SBI Mutual Fund
One of the oldest funds in the Indian mutual fund industry, SBI Magnum Equity Fund was launched in 1995. Invest in a mix of Equity funds and Debt funds with SBI Magnum Balanced Fund.The fund intends to provide long-term capital appreciation by investing in high growth companies. For more information about this hybrid scheme check our website page https://www.sbimf.com/Products/HybridSchemes/Magnum_Balanced_Fund.aspx
SBI Magnum Balanced Fund: An Open Ended Balanced Fund - Dec 2015SBI Mutual Fund
SBI Magnum Balanced Fund invests in a mix of equity and debt investments. It provides a good investment opportunity to investors who do not wish to be completely exposed to equity markets, but are looking for relatively higher returns than those provided by debt funds. This presentation highlights the asset allocation of this fund along with its characteristics and performance. For more information about this hybrid scheme check our website page https://www.sbimf.com/Products/HybridSchemes/Magnum_Balanced_Fund.aspx
SBI Emerging Business Fund: An Equity Mutual Fund Scheme - Sep 17SBI Mutual Fund
SBI Emerging Business Fund focuses on emerging businesses and invests in companies that are considered emergent. It has the flexibility to invests across market caps. SBI Emerging Business Fund may invests into large, mid and/or small cap stocks in any proportion based on the market conditions making the most of various market phases. Visit SBI Mutual Fund to know more this fund at https://www.sbimf.com/en-us/equity-schemes/sbi-emerging-businesses-fund
SBI Magnum Balanced Fund: Balance Between Growth And Stability - Jan 2016SBI Mutual Fund
SBI Magnum Balanced Fund invests in a mix of equity and debt investments. It aims to balance the risk & return of the portfolio by investing in more than one asset class.Equity funds provide capital appreciation and generate returns above inflation. Debt funds provide stability and generate consistent income. Balanced fund aims at striking a balance between both. For more information about this hybrid scheme check our website page https://www.sbimf.com/Products/HybridSchemes/Magnum_Balanced_Fund.aspx
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
Exploring Abhay Bhutada’s Views After Poonawalla Fincorp’s Collaboration With...beulahfernandes8
The financial landscape in India has witnessed a significant development with the recent collaboration between Poonawalla Fincorp and IndusInd Bank.
The launch of the co-branded credit card, the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card, marks a major milestone for both entities.
This strategic move aims to redefine and elevate the banking experience for customers.
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
how can i use my minded pi coins I need some funds.
Portfolio Construction and Management (Equity and Debt) using Efficient Frontier Hypothesis
1. Portfolio Construction and
Management
Investment Management Project
Himanshu Gupta – 12P138 Ishpreet Singh – 12P139
Karan Jaidka – 12P141 Shivendra – 12P169
Vikas Jain – 12P178
Investment Management (IM) – B – Group 7
PGPM 2012-2014
2. Portfolio Construction and Management
IM Section B – Group 7 – Project Report Page 1
Name of our Investment Management Fund
Greenback Capital Advisors Private Limited (Greenback Capital)
About the Fund
Greenback Capital Advisors Private Limited (Greenback Capital) was established in July, 2005 to
address the growing need of the different types of investors in the Indian capital markets. We
manage our investors’ capital with three fundamental ethos: expertise, accountability and
transparency.
Greenback Capital’s portfolio managers (belonging to IM-B Group 7, PGPM 2012-14, MDI
Gurgaon) have a lot of experience in the capital markets and this expertise has been developed
over multiple business cycles. While past performance is no guarantee of future success, the
funds managed by us have generally outperformed or, during times of recession, performed at
par with the markets. Accountability to us means a deep commitment to do what is right for
our investors. We also believe that transparency leads to trust which will create a long lasting
fiduciary relationship between us and our investors. We proactively invest in securities to
further propagate the three ethos.
Greenback Capital aims to achieve a high absolute rate of return over a business cycle while
minimizing risk of capital loss. We practice the established investment principles espoused by
the likes of Graham, and Warren Buffett.
3. Portfolio Construction and Management
IM Section B – Group 7 – Project Report Page 2
Investment Strategy followed at Greenback Capital
The primary focus is to invest in undervalued companies from the large-cap universe primarily
of the publicly traded Indian securities. The potential for aggressive expansion in large-cap
companies is small, but these stocks are relatively more stable. They are much more likely to
pay dividends and possess greater free cash flows. Historically, large-cap companies are known
to ride the storm and are relatively more stable when the market is undergoing a sustained
bear run. They are also more suited for long term investing, and since most of our investors stay
invested in our fund for many years, it aligns with our strategy of focusing on large-cap stocks.
These companies have businesses in multiple geographical locations and hence, diversify the
risk associated with domestic problems. Also, the fundamentals and business models of large-
cap companies are believed to be better for investments in the long run.
Apart from investing in securities, we also invest in riskless assets, which we keep changing
from time to time. This riskless asset, combined with the risky asset portfolio, makes up our
complete portfolio. The weights assigned to the risky assets are fixed at a given point of time.
These weights are assigned in such a way that we offer the maximum return at the minimum
possible variance at that level of return, i.e. the highest possible Sharpe Ratio in our portfolio at
a given point of time. Our investors are not given an option of changing the composition and/or
weights of our risky assets. This composition is evaluated from time to time by our competent
asset managers and the best possible combination at that point of time is determined and
frozen. After this step is complete, different weights are assigned to the riskless asset and the
combined risky assets and are offered to our investors based on their requirements risk
appetite, expected returns, etc.
4. Portfolio Construction and Management
IM Section B – Group 7 – Project Report Page 3
Current Composition of the Portfolio
The current offerings of Greenback Capital include a combination of risky assets (equity) and
riskless asset (bonds issued by Government of India enterprises) as described below:-
Risky Assets
10 Large-cap stocks (blue-chip companies) listed on the S&P BSE Sensex make-up Greenback
Capital’s risky asset portfolio. These stocks have been selected from various sectors and they
have historically been good performers in their respective businesses and in the stock market.
Their fundamentals remain strong and our asset managers expect them to continue offering
good levels of returns in future as well. The securities have been chosen from different sectors
in order to mitigate the industry-specific risks which a particular industry may face from time to
time. Details of the stocks comprising our risky-asset portfolio are:-
Company Name Sector
Rationale for including in the
portfolio
Mahindra and Mahindra Ltd. Auto and Auto Ancillaries
Market leadership in SUV
segment, Fastest growing in
Vehicle industry
ITC Ltd. FMCG and Retail
Strong presence in rural market
(Fast growing)
Godrej Consumer Products
Ltd.
FMCG and Retail
Revitalizing company with Focus
on global market
HCL Technologies Information Technology
Core strengths in engineering and
R&D services and infrastructure
management
Reliance Industries Limited Oil and Gas
Continuity of positive results
from Cauvery basin adding to
long term profitability of the
company
Axis Bank
Banking and Financial
Services
Best Bank (CNBC-TV18),
Profitability
Dr. Reddy’s Laboratories
Pharmaceuticals and
Healthcare
Focus on new markets,
Developing new products
through partnership route
Container Corporation of
India Limited
Logistics and Transportation
Market share of more than 75%
5. Portfolio Construction and Management
IM Section B – Group 7 – Project Report Page 4
ACC Limited Metals and Cement
Super brand status, nationwide
presence
Coal India Limited Metals and Cement
Largest coal producer in world,
Majority owned by Govt.
Riskless Asset
In order to mitigate the overall market and systematic risk and to cater to the varying risk
appetites of our investors, we have currently included the tax-free secured bond issued by
Rural Electrification Corporation Limited (a Government of India enterprise). Some important
details of the bond are as follows:-
Issue Size ` 1,000 crore with an option to retain oversubscription up to the shelf limit
of ` 4,500 crore
Instrument Tax Free Secured Redeemable Non-Convertible Bonds of face value of ` 1,000
each in the nature of Debentures having tax benefits under the Section
10(15)(iv)(h) of the Income Tax Act, 1961
Credit
Rating
‘CRISIL AAA/Stable’ by CRISIL, ‘CARE AAA’ by CARE, ‘IND AAA’ by IRRPL &
‘*ICRA+ AAA’ by ICRA
Face Value ` 1,000/- per bond
Minimum
Subscription
Minimum Subscription - 5 Bonds (` 5,000) across both the series
Coupon Rate 7.22% p.a for Category I, II and III Applicants
Weights assigned to Stocks in the Risky Portfolio
As mentioned above, the weights assigned to individual stocks were determined by our asset
managers based on historical data. The current weights assigned are as follows:-
ACC Axis Bank Coal India CONCOR Dr. Reddy's GCPL
0.0934 0.0000 0.0000 0.0000 0.1438 0.0000
HCL Tech. ITC M&M RIL Mean Variance Standard
Deviation
Sharpe
Ratio
0.0797 0.6667 0.0162 0.0000 0.0520 0.0019 0.0443 1.1713
6. Portfolio Construction and Management
IM Section B – Group 7 – Project Report Page 5
Investor Profile
Client Name– Mr. Ajay Chauhan
Age – 36 years
Place of Residence – Mumbai
Investment Start Date – 1st
July, 2011
The client’s family consists of four members – his wife who is working as an event manager in a
company and two children of ages 5 and 7. The client works as a project manager in Microsoft.
His annual compensation is INR 32 Lakhs.
Financial Goals
The client has planned to have a family trip to Europe once his children attain an age of around
10 years. He has some savings whose value he does not want to erode in the meantime. So, he
was looking out for a good investment opportunity which could give him good returns over and
above market risk. His aim is to have at least annual inflation adjusted, after-tax cash flow of
around INR 14-15 lakh
Investment Objective
To get at least 10% inflation adjusted returns on a highly diversified portfolio so that the risk
can be minimized. He wants to invest money both in risk-free assets and risky assets since his
risk appetite does not allow him to have full exposure to equity market. The client wants to
invest 20% of his portfolio in risk free assets.
Volatility Tolerance
The client’s financial position is quite sound. He also has a good knowledge about securities and
he understands the risks associated with them. Due to his financial capacity and future
prospects, he is quite tolerant towards interim fluctuations in portfolio market value and rates
of returns.
7. Portfolio Construction and Management
IM Section B – Group 7 – Project Report Page 6
Investment Time Horizon
Investment horizon is 5 years. Afterwards, it would depend on the client if he wants to continue
or not. The client does not have short term need for liquidity.
Portfolio Performance in 2 Years (1st July, 2013 – 16th August, 2013)
The point at which the Sharpe Ratio is maximum is mentioned in the graph above. By investing
20% of the total investment in riskless assets, our investor has slid slightly lower along the
Capital Allocation Line (CAL) to the point mentioned in the graph. He has effectively lowered his
risk, but at the same time, his expected return has also reduced from 5.2% quarterly to 4.521%
quarterly.
8. Portfolio Construction and Management
IM Section B – Group 7 – Project Report Page 7
Expected Quarterly Returns Standard
Deviation
Weight of risk-less asset 0.2 0.01805 0.0
Weight of risky asset 0.8 0.05200 0.044
Total Return 0.04521 0.0352
Expected quarterly return of
portfolio
4.521 (in %
terms)
Total Standard Deviation of
portfolio
0.03520
Hence, by investing 20% of the total invested amount in the riskless REC Bond and 80% in the
risky equity portfolio our investor’s portfolio has provided him with 4.521% quarterly returns
and with a risk of 0.0352. He expects the same return-risk relationship in future as well.
In the 2 years (approximately 8 quarters) which the investor has remained invested, he has
unrealized gains of INR 4,24,388 (without inflation) (assuming the gains are re-invested). If we
take inflation into account, the gain reduces to INR 2,21,827 (CPI in 2011 = 6.4% and CPI in 2012
= 11.17%).
Effective Annual Rate (EAR) for quarterly returns of 4.521% = 19.347%
Year CPI (in %) EAR – CPI (in %) Investment at the end of period
2011 6.4 12.947 1129470
2012 11.17 8.177 1221827
Total inflation adjusted value of portfolio at the end of two years = INR 12,21,827
Total inflation adjusted return at the end of two years = 10.53%
Conclusion
When the client viewed his portfolio over the past 2 years and observed that he is getting
returns of 10.53% after adjusting for inflation, he was quite happy with the performance and
decided to remain invested.