Portfolio management
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This document discusses portfolio management. It defines a portfolio as a collection of financial assets and notes that portfolio managers invest money in diverse assets to maximize returns while minimizing risk. The document outlines the functions of portfolio management, which include framing investment strategies, hedging inflation, optimizing returns, and making timely investment decisions. It also distinguishes between discretionary and non-discretionary portfolio management services. Additional topics covered include the qualities of effective portfolio managers, the steps in portfolio management process, factors influencing investment decisions, and the code of conduct for portfolio managers.
Portfolio management
- 1. By- Prof. M.A.Tamboli Mob- 9766010560 [email protected] PORTFOLIO MANAGEMENT 1 Prof. M.A.Tamboli
- 2. Portfolio A portfolio is collection of asset. In portfolio management these assets are financial in nature According to SEBI portfolio is the total holdings of securities belonging to one person. Prof. M.A.Tamboli2
- 3. Portfolio Manager The portfolio manager invest the money id diverse assets with the aim of maximizing return and minimizing the risk. Portfolio manager means any person who pursuant to a contract with a client undertakes the management of a portfolio of securities or fund of the client Prof. M.A.Tamboli3
- 4. Functions of Portfolio Management 1. To frame investment strategy and select investment mix 2. Hedge against inflation and also optimize returns. 3. To make timely decision about sell and purchase of securities. 4. To maximize after tax return by investing part of the portfolio in tax savings investments. Prof. M.A.Tamboli4
- 5. 1.THE DISCRETIONARY PORTFOLIO MANAGEMENT SERVICE: The client gives his money for investment to the manager, who handle the paperwork, makes all investment decision and gives a good return to the investor and charges a fee for the service rendered. Prof. M.A.Tamboli5 Types of Portfolio Management
- 6. Types of Portfolio Management 2. THE NON-DISCRETIONARY PORTFOLIO MANAGEMENT SERVICE: In this type manager functions as a counselor, but investor is free to accept or reject the manager’s advise. The paperwork is also undertaken by the manager for a service charge. Prof. M.A.Tamboli6
- 7. Qualities of Portfolio Manager 1. Sound general knowledge 2. Analytical ability 3. Marketing skills 4. experience Prof. M.A.Tamboli7
- 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 Prof. M.A.Tamboli 8
- 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 Prof. M.A.Tamboli9
- 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. He shall not involved in unfair competition. 6. He should not disclose any confidential information about his client 7. A portfolio manager shall not be a party to : • Creation of false market in securities • Price manipulation of securities • Passing of price sensitive information to any participants in the market. Prof. M.A.Tamboli11
- 12. Thank You !!! Prof. M.A.Tamboli12