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Client portfolio management
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- 2. TREYresearch • Portfolio Managementis defined as the art and science of making decisions about the investment mix and policy, matching investments to objectives, asset allocation for individuals and institutions, and balancing risk against performance. • Portfolio management refers to managing an individual’s investments in the form of bonds, shares, cash, mutual funds etc. so that he earns the maximum profits within the stipulated time frame. • It is the detailed SWOT analysis (strengths, weaknesses, opportunities, and threats) of an investment avenue, which could be in the form of debt/equity, domestic/international, with the goal of maximizing return at a given appetite for risk Introduction 2
- 3. TREYresearch Types Of PortfolioManagement There are majorly four types of portfolio management methods: Discretionary portfolio management • In this form, the individual authorizes the portfolio manager to take care of his financial needs on his behalf. Non discretionary portfolio management: • Here the portfolio manager can merely advise the client what is good or bad, correct / incorrect for him, but the client reserves the full right to take his own decisions. 3
- 4. TREYresearch Types Of PortfolioManagement Passive portfolio management • It is the form which involves only tracking the index. Active portfolio management • This includes a team of members who take active decisions based on hard core research before investing the corpus into any investment avenue. (e.g. close ended funds). 4
- 5. TREYresearch ObjectivesofPortfolio Management • Portfolio managementhelps in providing the best options for investments to individuals as per the defined criterions of their income, budget, age, holding period and risk taking capacity. • This is the method preferred by those who believe in having liquidity in investments so that one can get the money back when needed. • Some of the portfolio management schemes are also done for tax saving purposes. • It helps the investors maintain the purchasing power. • This is mainly done by the Portfolio managers who understand the investors’ financial needs and accordingly suggest the investment policy that would have maximum returns with minimum risks involved. Aptly put, it is risk reduction through diversification. 5
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- 8. TREYresearch ThankYou Sumit kumar singh PGDM2nd Year [email protected] Techno Institute of Management Sciences 8