Summer Training Report On PORTFOLIO MANAGEMENT OF HIGH NETWORTH INDIVIDUALS IN EARTH INFRASTRUCTURES LIMITED Submitted In Partial Fulfillment of the

Requirement Of Masters of Business Administration

Corporate Mentor: Name: Mr. Sachin Jain Designation: General Manager 06161203912 Organization: Earth Infrastructures Ltd.

Submitted By: Name: Aayushi Jain Enrollment no:

Batch: 2012-2014

Submitted To: Banarsidas Chandiwala Institute of Professional Studies, Dwarka (Affiliated to Guru Gobind Singh Indraprastha University)

CERTIFICATE

This is to certify that the project work done on Portfolio Management of High Net worth Individual Investors in Earth Infrastructures Limited submitted to Banarsidas Chandiwala Institute of Professional Studies by Aayushi Jain in partial fulfillment of the requirement for the award of degree of Master Of Business Administration, is a bonafide work carried out by her under my supervision and guidance. The work was carried during 10th June, 2013 to 30th July, 2013 in Earth Infrastructures Limited.

During the training period her behavior & performance was satisfactory.

Date: July 2013 Seal/Stamp of the Organization

BONAFIDE CERTIFICATE

This is to certify that as per best of my belief the project entitled Portfolio Management of High Net worth Individual Investors in Earth Infrastructures Limited is the bonafide research work carried out by Aayushi Jain student of MBA, BCIPS, Dwarka, New Delhi during June-July 2013, in partial fulfillment of the requirements for the Summer Training Project of the Degree of Master of Business Administration.

She has worked under my guidance.

-------------------Name: Dr. Aparna Mishra Project Guide Date:

Counter signed by ------------Name:Dr. Satish Taneja Director Date:

DECLARATION

I hereby declare that this Project Report titled Portfolio Management of High Net worth Individual Investors in Earth Infrastructures Limited submitted by me to Banarsidas Chandiwala Institute of Professional Studies, Dwarka is a bonafide work undertaken during the period from June 10th, 2013 to August 30th, 2013 by me and has not been submitted to any other University or Institution for the award of any degree diploma / certificate or published any time before.

(Signature of the Student) Name: Aayushi Jain

Date: /

/ 2013

Enrollment No.: 06161203912

ACKNOWLEDGMENT

It is said no learning is possible without any proper guidance and no research endeavor is a solo exercise, some contribution is performed by various individual. By acknowledging the guidance, support and assistance, I pay my deepest sense of guidance to my mentor. I extend a sincere acknowledgment to Earth Infrastructures Limited for giving me the opportunity to work with this esteemed organization. I would like to thank Dr. Satish Taneja (Director, Banarsidas Chandiwala Institute of Professional Studies) who has been a constant source of inspiration. I am highly indebted to Dr. Aparna Mishra for her guidance and constant supervision as well as for providing necessary information and support in successful completion of the project. I would also like to thank my corporate mentor Mr. Sachin Jain for his kind co-operation and encouragement which helped me in completion of this project.

It has been a great honor and privilege to have been acquainted with them. Although there may be many who remain unacknowledged in this humble note of gratitude there are none who remain unappreciated.

Under the guidance: Dr. Aparna Mishra

Submitted by: Aayushi Jain MBA (Finance)

EXECUTIVE SUMMARY

The Title of Research Project is Portfolio Management of High Net worth Individuals at Earth Infrastructure Ltd. conducted at the Corporate Office of Earth Infrastructure Ltd, 1501 - 1503, 15th Floor, Tower-A, Signature Tower Gurgaon, Haryana.

Portfolio Management is a science for managing the varying combination of Portfolio elements. These elements are the sub-components, of which the larger portfolio is formed; say, the elements may be 'plans' for a portfolio of plans, or 'strategies' for portfolio of strategies. In general, we may say that the elements of a portfolio are different forms of assets and in essence, portfolio management is managing these assets. We shall henceforth refer to portfolio management as the management of these assets. This project undertaken at Earth Infrastructure Ltd was mainly to understand about what portfolio management is and why is it important to continuously follow it. Since the scenario keeps on changing every single day, it becomes important to evaluate it on a regular basis and make the required changes. The project as the title suggests, subjected to Portfolio Management of High Net worth Individuals. The methodology used for the Research is based on the collection of primary and secondary data and the sampling technique used for methodology was random sampling. The samples are collected from the various investors. The questionnaire designed was based on mainly three particulars which are risk appetite of the investors, the horizon for which they want to keep their investment and the liquidity they want from their investment. Pie charts were used for the visual display of the result. The main findings of the project are:

The investors seek the safe schemes to invest as most of the people are risk averse and prefer not to experiment with their hard earned money.

The investors prefer investing for a long term rather than short term in expectations of earning long term returns.

The investors want their money to be more liquid in the view that they can get the amount of their investment in hand as and when required.

INDEX

S.No.

TOPIC

Page No.

Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7

Introduction Literature Review Objectives and Scope of study Research Methodology Company Profile Data Analysis and Interpretations Findings, Suggestions & Conclusions Bibliography Annexure

CHAPTER I INTRODUCTION

CHAPTER 1- INTRODUCTION

1.1 Introduction: Portfolio Management is a science for managing the varying combination of Portfolio elements. These elements are the sub-components, of which the larger portfolio is formed; say, the elements may be 'plans' for a portfolio of plans, or 'strategies' for portfolio of strategies, or 'securities' for a portfolio of securities, and so on. In general, we may say that the elements of a portfolio are different forms of assets and in essence, portfolio management is managing these assets. We shall henceforth refer to portfolio management as the management of these assets.

1.1.1 Portfolio Management of High Net worth Individuals: Portfolio planning is a highly personalized exercise, involving a close examination of a persons needs and requirements. Often preparation of such investment portfolios differs on a case-to-case basis. The art of selecting the right investment policy for the individuals in terms of minimum risk and maximum return is called as portfolio management. Portfolio management refers to managing an individuals investments in the form of bonds, shares, cash, mutual funds etc so that he earns the maximum profits within the stipulated time frame. In a laymans language, the art of managing an individuals investment is called as portfolio management.

1.1.2 Need for Portfolio Management Portfolio management presents the best investment plan to the individuals as per their income, budget, age and ability to undertake risks. Portfolio management minimizes the risks involved in investing and also increases the chance of making profits. Portfolio managers understand the clients financial needs and suggest the best and unique investment policy for them with minimum risks involved. Portfolio management enables the portfolio managers to provide customized investment solutions to clients as per their needs and requirements.

1.1.3 Types of Portfolio Management

Portfolio Management is further of the following types: Active Portfolio Management: As the name suggests, in an active portfolio management service, the portfolio managers are actively involved in buying and selling of securities to ensure maximum profits to individuals. Passive Portfolio Management: In a passive portfolio management, the portfolio manager deals with a fixed portfolio designed to match the current market scenario. Discretionary Portfolio management services: In Discretionary portfolio management services, an individual authorizes a portfolio manager to take care of his financial needs on his behalf. The individual issues money to the portfolio manager who in turn takes care of all his investment needs, paper work, documentation, filing and so on. In discretionary portfolio management, the portfolio manager has full rights to take decisions on his clients behalf. Non-Discretionary Portfolio management services: In non discretionary portfolio management services, the portfolio manager can merely advise the client what is good and bad for him but the client reserves full right to take his own decisions.

Personal financial planning is a continuous process of assessing an individual profile and planning his finances so that he can attain his financial objective in and effective manner. This exercise involves deciding on the individual investment portfolio. In the other words, deciding upon the various investment avenues, the quantum that needs to be invested and the investment horizon for each of the investments are essential components of the personal financial planning process. Before suggesting any financial plan for the investor it is very important to consider certain basic factors. These factors are follows: The income level of the investor: This is one of the most important factors, which has a significant bearing on the investment portfolio of the investor. His investment plans should be in line with his income level and in proportion to the amount he is prepared to invest. Risk appetite: This differs from person to person and is a highly subjective phenomenon. For example in most of the cases a 65-year-old man who has retired from work will not have a very aggressive outlook toward s investments. Hence, recommending equity and equity related investments might not be appropriate. The investment plan that is drawn should be in sync with the persons risk appetite.

 Investment horizon: some investors tend to remain invested for long period of time. For such investors liquidity is not the main criteria. Hence, for such persons PPF, ELSS and NSC are the best bet. Investor, for whom liquidity is of paramount importance, recommending PPF may not be appropriate. Nevertheless, one point that needs to be highlighted is that there can be no fixed rule for any personal financial planning exercise. It differs from person to person.

1.1.4 Risk Profiling As the name suggests, Risk Profiling is a scientific approach to find out the attitude or the risk taking capability of an individual towards his/her investments. Risk profiling is an integral part to the investment process. It underpins decisions about making an investment. It plays an essential part in ensuring the suitability of investments for an individual. It gives a measure of how risk averse the individual is as an investor. This would be the corner stone to determine what securities will likely fit into the individuals investments or investment goals factors like age, life stage (single, married, etc.), income, savings, dependents and mindsets on investments and past experiences on your investments are the factors that would define your attitude towards investing. Risk Profiling combines two key areas: 1) Estimating an individuals financial risk-taking capacity 2) Understanding his psychological risk tolerance level. These two factors determine where and how one should ideally invest. This Risk profiling would give a Relationship Manager a clear understanding of the clients risk appetite, so that he can guide him and provide informed investment decisions.

1.1.5 The Portfolio Management Process Step One: Determining the Risk Profile The first step in portfolio construction is determining the client's risk profile. This is a very important part of the process. All the other aspects of portfolio construction feed off it. It is also important at this point to explain the risk-return tradeoff. Investors often want complete capital protection in market downturns and complete participation in market performance during upswings. This is not a realistic expectation and their misconceptions should be corrected.

There are five Risk Profiles:

Conservative Cautious Moderate Moderately Aggressive Aggressive

Where clients fall on this scale is one of the main determinants of their portfolio's final characteristics and performance. Investors have wildly differing attitudes toward risk and risk tolerance.

Step Two: Strategic Asset Allocation Armed with a risk profile, the next step is strategic asset allocation. Simply put, this is your long term asset allocation. Research has shown that up to 90% of a portfolio's performance can be explained by the

composition

of

asset

classes.

There

are

five

main

asset

classes

to

consider:

Equities (Local South African) Property Bonds Foreign (Includes equities and fixed interest) Money Market (Short term cash instruments)

The amount of exposure a client should have to each asset class depends almost solely on his risk profile. The table above details the asset allocation of the various risk profiles. In order to populate the asset bands we suggest using a building block approach. This involves appointing specialist investment managers to each manage a part of the asset allocation. In other words, an assertive investor could invest his money as follows.

Equity exposure could be split between two general equity funds. Select one or two offshore funds to make up the foreign portion of the assets A Property manager to manage the property portion A bond manager for the bond portion A money market fund for the cash portion

This is just one way to populate the asset bands. Instead of using a pure property fund, you could use a

fixed interest varied specialist fund to take care of bonds, cash and property exposure and then only allocate a small portion to a money market fund. Another option is to use a core-satellite approach. Select a single core fund that has an asset allocation mandate to make up the largest part of the portfolio. Then add one or two other funds as satellites in keeping with the risk profile. Step Three: Tactical Asset Allocation Where strategic asset allocation determines the basic construction of the investment over the long term, tactical asset allocation has a much shorter focus. It involves actively over-or underweighting asset classes to take advantage of short term market movements. For example an Assertive investor who is bullish on foreign assets and bearish on property, would allocate assets closer to the top of the band (35%) in foreign and the bottom of the band in property (0%). If the investor is neutral towards an asset class he will be somewhere in the middle. There is a big chance of getting tactical asset allocation wrong, so instead of adding value you reduce it. That is why we recommend you restrict the changes in asset allocation to within the bounds of the specified asset bands. If the investor feels neutral towards an asset class or doesn't want to use tactical asset allocation, staying in the middle of the bands will still enable him to reach his goals.

Step Four: Fund Selection Fund selection is the next step in the process. How do you choose funds from the hundreds in the market? When selecting funds from the Shopping List it is important to remember what risk profile the client has. This will play a large role in determining which funds you select. Choosing three equity funds for the 20% equity exposure of a Conservative client, or two Money Market funds for an Assertive investor is unnecessary. Apart from complicating the portfolio it doesn't really add any value.

Step Five: Constructing the Portfolio Once the client has selected the funds it's time to place them into a portfolio. Remember that the total risk of the portfolio is less than the average risk of the separate funds. This is due to the benefits of diversification. By combining asset classes and different management styles you significantly reduce risk.

Step Six: Rebalancing the portfolio The portfolio must be rebalanced at least every 6 months. Due to market movements and the inherent differences in the funds, they will grow at different rates. This could change the weightings in the portfolio, moving it out of its specified risk profile or asset bands. For this reason we advocate that you look at the asset and fund allocations on at least a half yearly basis, to keep the portfolios true to their original risk profile. Following these 6 steps will ensure that your clients receive a portfolio that matches their risk profile and will meet the requisite investment goals. This will give you, the financial advisor and the client, peace of mind. 1.1.6 Real Estate as an Investment Script

Real Estate refers to investment in immovable properties which includes land, buildings, flats etc. Investing in real estate involves the purchase of real estate and selling it for a profit. Basically investment in real estate involves a substantial investment and for a long period of time. Majority of the investors invest in real estate in the form of buying a house. But real estate investment is beyond this and the objective behind the investment is to make profits. Before making a real estate investment, the investor should evaluate the risk appetite and investment amount. The different types of real estate investments are as follows 1) Rental The aim of this form of investment is to rent out property to a tenant and earn a continuous stream of rent from the tenant. The value of the property also increases over a period of time. The risk in this form of investment is the owner of the property has to find out a tenant and also need to pay for the maintenance expenses. 2) Trading Basically traders in real estate in order to make a quick profit buy properties for a short tem ( six months) and sell them at a profit. Traders look out for buying undervalued properties/very hot properties and sell them at a profit. 3) Long Term Investment There is a certain group of investors who invests in real estate basically plot of land from a long term perspective. The objective is over a period of time the value of the property will rise and the owner will make a profit by selling it. The biggest flaw in this investment is money is blocked for an indefinite period.

1.1.7 Risk Analysis

Although there is a difference in the specific definitions of risk and uncertainty, for our literature the two terms are used interchangeably. In fact, one way to define risk is the uncertainty of future outcomes. An alternative definition might be the probability of an adverse outcome. Composite risks involve the different risk as explained below:-

Systematic Risk - Systematic risk influences a large number of assets. A significant political event, for example, could affect several of the assets in your portfolio. It is virtually impossible to protect yourself against this type of risk.

Unsystematic Risk - Unsystematic risk is sometimes referred to as "specific risk". This kind of risk affects a very small number of assets. An example is news that affects a specific stock such as a sudden strike by employees. Diversification is the only way to protect you from unsystematic risk. (We will discuss diversification later in this tutorial).

Interest Rate Risk - Interest rate risk is the risk that an investment's value will change as a result of a change in interest rates. This risk affects the value of bonds more directly than stocks. Credit Risk It is also called default risk. As the first pic of this article shows that people only look at returns & not risk in it. Let me ask if SBI bank is paying some 9% interest & some NBFC NCD is paying 12.5% which one you choose. If you think 12.5% NCD will be the right choice you are ignoring the credit risk. Credit risk is when company doesnt have capacity to pay principal or interest amount. In past there is a long list of companies which defaulted like CRB Capital, Escorts, Morpen Labs etc. Even Bank FDs have credit risk there is guarantee only up to Rs 1 lakh. Credit risk is close to zero in Government Bonds. Liquidity Risk If you have some bonds that you would like to sell for immediate requirement but there is no buyer or fewer buyers than sellers you may have to sell your bonds at discount. Volatility Risk Equity prices keep fluctuating on day to day basis. This can be measured by standard deviation.

CHAPTER II REVIEW OF LITERATURE

CHAPTER 2- REVIEW OF LITERATURE

2.1 Research Paper on Modern Portfolio Theory: Is There Any Opportunity for Real Estate Portfolio? By Hishamuddin Mohd Ali, Ph.D, Department of Property Management, Faculty of Geoinformation Science and Engineering, University Technologies Malaysia, 81310 Skudai, hisham@fksg.utm.my This paper presents the issues of the applicability and implication of employing MPT on real estate portfolio analysis. The discussion is merely looking into some previous empirical studies with mixture of findings. The new paradigm of real estate investment has been shifted from tactical and operational to strategic and tactical style of management. Therefore, MPT could give a sound analytical view of real estate portfolio analysis which may offer more opportunities for further research particularly in Malaysia.

Since Markowitz (1959) introduced Modern Portfolio Theory (MPT), many researchers have attempted to model the benefits of establishing diversification strategies for portfolio investments. MPT is part of the branch of finance known as Investment Management. Most of the applications of MPT deal with paper investments such as stocks, bonds, options and futures rather than real investment like corporate investment projects and real property.

The purpose of this article is to explore the implications and applicability of MPT in real estate portfolios. The next sections will discuss the environment of real estate investment with a comparison of real estate and share markets. The article proceeds by discussing the application of portfolio and capital market theories on real estate. The most important aspects, including issues on the implementation and application of MPT, will be highlighted, as well as the implications on real estate research. Portfolio is simply defined as a list of investment. Managing the portfolio is therefore concerned with the management of a number of asset classes held for investment purposes. Inefficiencies in the real estate market, reflecting the in ability to sell short, high transaction costs and wide bid-ask spread, as well as the complexity of individual properties, require active investment management (Scott Jr., 1994). Most of the companies aim to maximize the value of the company. Therefore, it is important to understand how decisions related to the real estate asset affect company value. In the context of the MPT application, as initially specified by Markowitz (1952), the involvement of real estate as one of the investment media has lead to the construction of the portfolio within the multiasset or the real estate asset class. Conclusion

The conventional arguments regarding portfolio allocation within real estate have created some inconclusiveness in structuring the real estate portfolio. The emergence of real estate securitization such as REITs in the last decade at least has changed the attitude of fund managers on real estate as one of the best investment options. It has been recognized by investors that the myriad market activities generating the business cycle are interrelated. It is believed that disturbances in market fundamentals in a given market generate movements of capital into and out of the affected market. If various markets are integrated, it is expected that a high degree of asset substitution will take place. As real estate is now one of the asset classes, its needs to be recognized whether the real estate market and stock market are integrated. The fact is that, their integration is still inconclusive and therefore, identifying the precise framework of real estate portfolio construction is difficult. Although there were numerous studies on the application of MPT, studies of the behavioral aspects concerning expectations of the major players, such as PLRECs and REITs, were left behind. The paradigm shift of real estate investment from tactical and operational to strategic and tactical style of management has transformed the perception of real estate from just bricks and cement to more institutional in business environment Therefore, with the increasing number of REITs in Bursa Malaysia recently, MPT would be able to offer more opportunities for further research to explore the behavior and performance of real estate market which may lead to better investment decisions. 2.2 Research Paper on Investigating the roles, responsibilities and practices of portfolio managers in Australia By Aileen Koh Bond University, MIRVAC School of Sustainable Development, Institute of Sustainable Development and ArchitectureAileen_Koh@bond.edu.au Project Portfolio Management (PPM) is increasingly adopted by organizations in Australia. In order to select, prioritize and monitor simultaneous on-going projects with limited resources, there is a need for PPM to optimize investment by utilizing a PPM governance structure to deal with constant change and focus on achievement of organizational strategy. This is particularly relevant in order to build on national and global recovery. The aim of the research discuss in this paper is to investigate the roles, responsibilities and practices of project portfolio managers in services and products organizations in Australia. It also aims to relate the relationship between project types and environmental complexity of organization with the practices, roles and responsibilities of Portfolio Manager. Their influences to ensure that the best projects are selected and investments are optimized are the concern of this paper. Project Portfolio Management (PPM) is now a widely used approach by organizations in Australia to achieve business strategies. It brings great opportunities for organizations to embrace changes and lead their strategies into reality. PPM is used for selection and resourcing of research and development

projects where project management methods are used to do project rights and portfolio management methods are used to do the right projects.

Conclusion Portfolio management as a sound methodology to embrace change and achieve high level strategies has been increasingly adopted by organizations. The focus of the research is to investigate portfolio managers roles, responsibilities and practices in service and product development organizations in Australia is investigated. Based on the literature and analysis, a research model is presented. This model reflects the relationship between different project types and portfolio managements roles and responsibilities. The methodology proposed for this research involves (1) validating the research model; (2) using focus groups to identify the constructs, and refine the related hypotheses; (3) conducting two case studies through interviews with selected service and product development organizations -qualitative study; (4) developing a web based questionnaire quantitative study; (4) data collection and analysis to build on the results of the first qualitative phase.

2.3 Research Paper on International Real Estate Investing By Seth M. Azria, J.D. The world has become a market accessible to all those willing to get involved. Global trade, spearheaded by the multilateral efforts of a vast majority of the worlds nations, is now common place and widely regarded as the engine of global economic prosperity. Advances in technology have increased the ease and cost of moving people around the globe. Great economic advances are underway in the worlds two most populous countries, India and China, with other countries likewise engaged in growth. These factors combined with creative real estate ownership structures like the Real Estate Investment Trust (REIT), already firmly entrenched in the United States and gaining popularity around the globe, have made international real estate both an opportunity and a reality for many people. For United States real estate investors accustomed to high returns on domestic investments, the global real estate market offers an alternative to the slumping domestic real estate market. Over the long term, the real estate industry appears bound toward increased global ownership and involvement. This article reviews some basic concepts of international real estate investing, the REIT structure, and some hot areas for foreign investment. Proliferation of Global Real Estate Investment The United States has been focused inwardly on growing the domestic economy and has had a relatively minor role in the global real estate movement up until the late twentieth century. While American construction companies and banks compete around the world for projects, investment bankers and

advisors, and real estate developers have only more recently seriously moved into international real estate. Some of the factors that probably contributed to the move are worldwide financial deregulation, worldwide tax reform, declining property values in the United States, increased economic growth abroad, government emphasis on exports and better transportation and information technology. Factors that may have prevented a United States move into the global real estate arena were lack of foreign language skills among real estate professionals, thriving domestic economy, restated foreign financial markets, lack of professional training in international real estate and real estate personnel resistance to traveling and living abroad (Hines, 1988).

Conclusion The world has become a market accessible to all those willing to get involved. Global trade, spearheaded by the multilateral efforts of a vast majority of the worlds nations, is now common place and widely regarded as the engine of global economic prosperity. Advances in technology have increased the ease and cost of moving people around the globe. Great economic advances are underway in the worlds two most populous countries, India and China, with other countries likewise engaged in growth. These factors, combined with creative real estate ownership structures like the Real Estate Investment Trust, already firmly entrenched in the United States and gaining popularity around the globe have made international real estate both an opportunity and a reality for many people. For United States real estate investors accustomed to high returns on domestic investments, the global real estate market offers an alternative to the slumping domestic real estate market. Over the long term, the real estate industry appears bound toward increased global ownership and involvement. 2.4 Research Paper on Delegated Portfolio Management: A survey of the theoretical literature By Livio Stracca This paper provides a selective review of the theoretical literature on delegated portfolio management as a principal-agent relationship. The main focus of the paper is to review the analytical issues raised by the peculiar nature of the delegated portfolio management relationship within the broader class of principal agent models. In particular, the paper discusses the performance of linear vs. nonlinear compensation contracts in a single-period setting, the possible effects of limited liability of portfolio managers, the role of reputational concerns in a multi period framework, and the incentives to noise trading. In addition, the paper deals with some general equilibrium dimensions and asset pricing implications of delegated portfolio management. The paper also suggests some directions for future research. In most industrialized countries, a substantial part of financial wealth is not managed directly by savers, but through a financial intermediary, which implies the existence of an agency contract between the investor (the principal) and a portfolio manager (the agent). Therefore, delegated portfolio management is arguably one of the most important agency relationships intervening in the economy, with a possible

impact on financial market and economic developments at a macro level. Although there are no harmonized data across countries, the general view is that the trend towards delegated portfolio management has not been interrupted by the increased direct accessibility to financial markets witnessed in recent years, for example through the internet. Davis and Steil (2001) report that the share of household wealth managed by financial institutions has increased sharply in recent decades, in particular in the Anglo-Saxon countries but also in Europe and Japan. The growth of institutional assets has been particularly visible in relation to pension funds. These developments suggest that gaining a deeper understanding of the nature and consequences of delegated portfolio management contracts is interesting and relevant, for academics and policy-makers alike. Delegated portfolio management is a complex phenomenon which encompasses different segments. The mutual fund industry is predominantly characterized by middle aged households investing individually in sometimes relatively standardized products. By contrast, pension funds are predominantly managed by corporate treasures, who often delegate the asset management to a third party, thus creating an additional layer of agency. Conclusions In this paper we have selectively reviewed the theoretical literature dealing with the analytical issues arising from delegated portfolio management as a principal-agent relationship between an investor (the principal) and a portfolio manager (the agent). We have argued that, while this peculiar form of agency relationship shares many features with a traditional principal-agent model, it also presents its own challenges. The fact that in a delegated portfolio management setting the agent controls effort and can influence risk makes it more difficult for the principal to write incentive compatible contracts which are optimal from her standpoint. In particular, we have shown how the fact that the portfolio manager can control the scale of his response to the information signals in a linear (and potentially also nonlinear) way makes the quest for an optimal linear (and perhaps also nonlinear) contract for the principal very difficult. Indeed, this is a literature where negative results tend to prevail over constructive ones. We have also seen how reputation concerns in a multi-period setting may affect the incentives faced by portfolio managers and in some cases make the job of explicit incentives. At the same time, reputation concerns may also have distortionary effects insofar as they may lead managers to take on more risk or to discard private information and herd with the market, none of which necessarily goes to the benefit of investors. Finally, the literature has emphasized that (implicit or explicit) benchmarking might have significant implications for asset prices and volatilities at a macro level. Needless to say, there are several directions in which this literature could be fruitfully extended. Delegated portfolio management often implies more than one layer of agency, especially in the pension fund industry: how is this likely to affect incentives and outcomes? Another interesting extension appears to be considering less standard

utility functions for principals, say shortfall risk, which may be again particularly relevant in the pension fund industry. More generally, gaining a better understanding of the general equilibrium implications of the agency aspects of delegated portfolio management should be a paramount objective in future research. This is, in particular, a topic which should be interesting and relevant for policymakers, given the importance of delegated portfolio management relationships in all developed financial markets. Notably, the possible impact of delegated portfolio management on the emergence of asset price bubbles and on excessive trading in capital markets is an issue on which the theoretical literature reviewed in this paper has definitely shed some light and which would deserve further research.

Ideally, general equilibrium models of delegated portfolio management should be able to determine the optimal compensation structure ina principal-agent setting and its general equilibrium implications jointly. Although there is no reason to think that developing such models will be an easy task, since the literature has not been able to determine the optimal structure of the compensation structure in a delegated portfolio management context even in a partial equilibrium framework, our conclusion is that this research agenda should have a high priority in financial economics.

CHAPTER III OBJECTIVES AND SCOPE OF THE STUDY

CHAPTER 3- OBJECTIVES AND SCOPE OF THE STUDY

3.1 Objectives of the Study: The topic of the research project is Portfolio Management of High Net worth Individual Investors in Earth

Infrastructures Limited as the title suggested through this study we could study the concept of Portfolio Management.
Keeping in view the above main objective, the study is carried with:

To analyze the client's risk profile. To evaluate the duration of the investment made by the clients. To understand the clients expectation of the returns from their investments. To make the clients aware about the possible benefits of investing in the real estate sector. To understand the clients behavior and their need with respect to their investment capacity in the real estate sector.

3.2 Scope of the Study The study of the Portfolio Management is helpful in the following areas. In today's complex financial environment, investors have unique needs which are derived from their risk appetite and financial goals. But regardless of this, every investor seeks to maximize his returns on investments without capital erosion. Portfolio Management recognize this, and manage the investments professionally to achieve specific investment objectives, and not to forget, relieving the investors from the day to day hassles which investment require. It offers professional management of real estate investment of the investor with an aim to deliver consistent return with an eye on risk. In particular, the scope of this report has been focused to handle and discuss 'real estate' as the typical sub-component of portfolio of assets.

CHAPTER IV COMPANY PROFILE

CHAPTER 4- COMPANY PROFILE

4.1 Introduction to the Company: Name of the company - Earth Infrastructures Ltd. Type: Private Limited Company Industry: Real Estate Development Founded: 2010 Corporate Office- A-1, C & D, Sector 16, Near Metro Station, Noida, U.P. Registered Office- 26, Ist Floor, Pusa Road, Adjoining Karol Bagh Metro Station, New Delhi Gurgaon Office- 1501 - 1503, 15th Floor, Tower-A, Signature Tower Gurgaon, Haryana

4.2 Vision: With a commitment to deliver unique, integrated projects that best cater to client's needs, Earth strives to be the most innovative and trusted brand in real estate industry by adopting new technologies with a focus on green and eco-friendly construction.

4.3 Mission: Hassle-free operations with total customer satisfaction by resolving customer's issues with utmost attention and speedy services round the clock. Earth is dedicated to develop and deliver state of art projects matching to standards around the globe.

4.4 Focus: They are totally committed to deliver what we have committed to our customers and investors specially, quality construction & timely possession. Every action of the company and its employees is to provide 360 degree customer solution at its best.

 Complaint-free operations with total customer satisfaction by resolving customers issues with utmost attention and speedy services round-the-clock.

4.5 Philosophy: Driven by the philosophy of 'Innovation beyond Imagination We believe in making the finest elements of urban living with a commitment of high-quality construction Committed to design lifestyle experiences in the close proximity to environment, harmonizing concept living with five elements on the planet.

4.6 Greenology- Our bonding with nature: Our innovation lies in our strong bonding with nature and our unflinching support in re-making our planet Earth a better and greener place for mankind to live and prosper We are forging of a new relationship between man and the elements, where architecture is not the end but the catalyst in the equation We call this vision Mainstream Green ensuring a livable and prosperous future, because we understand the relationship between mankind and nature.

4.7 Customer Centric Approach: To ensure complaint free operations with total customer satisfaction by resolving customers issues with utmost attention and speedy services round the clock.

4.8 Brand Value: To deliver the projects differently and make the customer to feel at ease and comfort and create the Earth Brand a most trusted brand.

4.9 Innovation through Technology: Earth would be effortful and creative to identify and deliver something new, matching the technological up gradation in the Realty sector, all around the globe.

4.10 Corporate Social Responsibility Earth would concentrate towards development of affordable houses for the masses, to reach to the heart of all.

4.11 Employee Culture To keep on constantly searching for the talented employees, developing employee retention policies, providing continuous training and development to facilitate them to contribute completely in the growth of the organization.

4.12 Character, Ethics and Values Earth would be governed by its professional policies and procedures to ultimately benefit its values customers. The transparency of the policies would be maintained through the companys operational manual. Adhering to the manual would be mandatory for all, with an ultimatum objective to make the earth Favourite of all and to create Ethical Brand Value within a short span.

4.13 Milestones We are a group of innovative people, who consider each of our projects as an opportunity to do something different & unique. Our buildings are a personification of our dynamic imagination and our vision is to create the finest elements of urban living & working with our wide-ranging experience in real estate business. Our ability is to meet the special requirements of the real estate market and clients demand from its strong foundations of professionalism. Every project which will bear the Earth signature will stand out from the rest, in terms of design aesthetics and global standards of construction. And, for the records, we have struck the following Firsts in the Indian realty sector:

First Green Building in Noida Extension First Bank Guarantee Project in India First Assured Return in Retail Project in Gurgaon

4.14 Earths Associates Our project offerings are breathtakingly fresh, exquisite and unrivalled in design and engineering We have partnered with some of the best internationally acclaimed architects and design consultants Eigen-UK CERVERA & PIOZ-Spain BDP-Netherlands

4.15 Rewards & Recognitions Due to sheer diligence and dedication many prestigious rewards and recognitions has come our way in just two-and-a-half year tenure Best Debutant Developer of the Year in 2010 by Franchise India Bharat Samman Award in 2011 by NRI institute Most Innovative Developer Award from Institute of Economic Studies Meri Dilli Award Real Estate Sector

4.16 Earths Future Plans An SEZ at Yamuna Expressway spanning 40 acres of landmass A sprawling Township in Neemrana (Rajasthan) Exquisite Country Houses in South West Delhi High-end Commercial projects at Dwarka Expressway

 A 5-Star Hotel at Manesar To enter the equity market through IPO by 2014

4.17 Corporate Identity Earth Logo is an epitome of ancient history & modern architecture. The logo is a remarkable union of the pyramid & the sphere. The pyramid dates back to early civilizations & for thousands of years, the largest structures on earth were pyramids. In architecture pyramids are considered as a monumental structure and are looked upon with reverence & awe. The pyramids have set the foundation for many future constructions. The use of pyramid therefore makes a lot of sense for a company that deals in real estate. The circumference of a sphere reinstates the values of Earth infrastructures, as the earth is in itself is a sphere. It renders a 3D feel to the logo. The presence of both the pyramid & sphere, highlight the truth that Earth infrastructures was born to create outstanding structures, thatll leave a deep imprint on future. Also the latitudinal feel to the logo imbues a direction of growth. The logo symbolizes global appeal, upward growth & progress. As like on planet earth latitudes, always spiral up and the same outlook is hoped for the group too. Earth appears to be blue, due to the presence of water & atmosphere, which is why it is called The Blue Planet Also blue is the color of royalty Blue is calming. It can be strong and steadfast or light and friendly. Almost everyone likes some shade of the color blue Blue conveys importance and confidence Blue brings peace

4.18 Code of Conduct Objective: Every action of the company & its employees is to provide 360 degree customer solution at its door step. We ensure to provide full support for any compliance of the customers or the stakeholders. We are committed to continuously review and update our Policies and Procedures to initiate policies and action which are customer centric and which promote financial prudence.

Applicability of the Code: The company expects, the Management to exercise good judgment to ensure the interest, safety and welfare of customers, employees and other stakeholders and to maintain a cooperative, efficient, positive, harmonious and productive work environment in the organization. The Code needs to be followed while working in the premises of the company, at offsite locations where the business is being conducted whether in India or abroad, at company sponsored business and social events or at any other place where they act as representatives of the company.

4.19 Employment/Outside Assignment Members of Management are prohibited from engaging in any activity / employment that interferes with their performance or responsibilities to the company or otherwise is in conflict with or prejudicial to the company. Business Interest If any member of Management considers investing in securities issued by the companys customer, supplier or competitor, they should ensure that these investments do not compromise their responsibilities to the company.

4.20 Earths Projects Commercial Projects: By coming opportunities into real estate Earth is developing its two main commercial projects: Tech-one Iconic

Residential Projects

With the booming prospects of real estate in Delhi/ NCR region Earth infra has introduced two projects for its residential properties. They are as follows; Elacasa Gracia

4.21 Competitors DLF DLFs chief business is to develop housing, marketable and retail properties. Currently it has undertaken the development of 70 million sq ft of housing projects, which it intends to finish in the next three years. DLF has joined hands with Delhi Development Authority to develop townships in Pune, Gurgaon, Mumbai and Chennai etc. DLF has been the construction company behind different malls of the major cities in India. Omaxe Omaxe has successfully executed more than one hundred and twenty industrial, institutional, commercial and residential projects for a number of prestigious Indian private, public sector and Multinationals clients such as Amity University, LG, Pepsi, Samsung, Wave Cinemas, National Brain Research Centre, P.G.I. M.E.R, Apollo Hospitals and Delhi High Court. Unitech Recently Ramesh Chandra, Unitechs chairman has declared an investment of $ 720 million by his company in the coming four years to develop hotels along with Marriott International. The market capitalization of the company is Rs.16,867.40 crore. Its chief activities include construction, expansion of real-estate, consultancy in associated sectors, hotels, electrical broadcast and information technology. India Bulls Real Estate It is one of the Indias largest developers developing residential and commercial real estate. Being a focused regional player, more than 90% of IBRELs portfolio by value is in the three major markets of Mumbai, NCR and Chennai. Established in 2000, the company has grown into one of the leading Indian business houses with its companies being listed on Indian and overseas financial markets having a combined net worth in excess of Rs.18,000 crore.

4.22 Industry Profile: The awe and wonder of Real Estate in India lies in its flexible nature and its value appreciation over time. Events sweeping at the industry are pushing the limits of people's aspirations, concept of good

living, contemporary working style and recreation, their risk appetite, and money they can promise for high quality construction and smartly done up space. The prime drivers of change in Indian real estate have been initiated by path breaking policies like relaxation in FDI policies by the Government of India. It is mainly combined with strong economic growth, reforms and policies that lure global investors, easy terms of repaying home loans, rising income levels and urbanization. As the biggest part of one's investment portfolio, the idea of capitalizing on existing property has been taken to stunning heights. Whether it is a retail space in a commercially viable land or the neighborhood that has stable income/rent potential as investment property; the Indian real estate market is now offering the best bet on property. Moreover, the market is also opening up as the viable investment option for the NRIs who vouch to return to India. The asset that your second home is, your vacation home/retreat, the space that has lease appeal in retail or just the office space; most cities of India are poised for this and more. There is also a progressive feel to Tier II cities like Gurgaon, Noida, Faridabad, Bangalore, Hyderabad, Pune, Jaipur, Kochi and Chandigarh apart from the outstanding metros of Delhi, Mumbai, Bangalore and Chennai. Present Situation of the Real state industry The real estate sector is a critical sector of our economy. It has a huge multiplier effect on the Economy and therefore, is a big driver of economic growth. It is the second-largest employment-generating sector after agriculture. Growing at a rate of about 20% per annum and this sector has been contributing about 5-6% to Indias GDP. Not only does it generate a high level of direct employment, but it also stimulates the demand in over 250 ancillary industries such as cement, steel, paint, brick, building materials, consumer durables and so on. The Indian real estate industry has been on a roller coaster ride since 2005. Consequent to the Governments policy to allow foreign direct investment (FDI) in this sector, there was a boom in Investment and developmental activities. The sector not only witnessed the entry of many new domestic realty players but also the arrival of many foreign real estate investment companies including private equity funds, pension funds and development companies entered the sector lured by the high returns on investments. The real estate sector has been riding through many highs and lows since then. The industry achieved new heights during 2007 and early 2008, characterized by a growth in demand, substantial development and increased foreign investments. However, by mid 2008, the effects of the global economic slowdown were evident. Here too, and the industry took a u turn. FDI inflow into real estate

dropped significantly and what had emerged as one of the most promising markets for foreign investments experienced a downturn. Financial Support to the Sector In the financial years 2007-08, 2008-09 and 2009-10, the housing and real estate sector attracted FDIs of 8.9%, 10.3% and 11% respectively, of the total FDI in India. However, the financial year 2011-12 saw a mere 6% FDI in this sector. The year 2010 saw the Indian real estate sector spring back into action after the gloom and recessionary pressures experienced in the aftermath of the global downturn. The focus on affordable housing helped the sector tide over the financial crunch it had witnessed. There is no doubt that the sector holds huge potential to attract FDI in its various segments. However, progress is possible only with the joint efforts of both the industry and the government. On the one hand, the industry should work towards increased transparency, clear land titles, improved delivery and project execution while on the other hand the government must provide fiscal incentives to developers to build low cost and affordable housing for the masses and also review the existing FDI guidelines for investment and development in Indian real estate in order to increase the flow of foreign capital into the sector. Boosting Research and Development in real estate The government must provide incentives to the public and private sectors to take up R&D activities for new building materials and technologies so that the industry can deliver low cost, affordable, sustainable and environment friendly housing and building structures. Government regulations and changes required the government of India vide press note no. 2 of 2005, permitted FDI up to 100%, under the automatic route in townships, housing, built-up infrastructure and construction development projects. The main reason for opening up the real estate sector to 100% FDI was to bridge the huge shortage of housing in the country and to attract new technologies in the housing sector. The original FDI guidelines issued vide the above press note attracted large amounts of foreign funds to the Indian real estate sector however, subsequent amendments to the FDI policy relating to real estate, have created unwanted apprehensions and confusion in the minds of global investors thereby affecting FDI inflows adversely. Further, lack of consistency in rules relating to development of SEZs, increased monitoring of the sector by regulatory agencies, tightening of rules for lending to the real estate sector and increase of key rates by the RBI several times during the last one year, have arrested the growth of the sector. There is a need to streamline government policies and introduce reforms to boost the real estate sector.

Challenges faced by the Industry The key challenges that the Indian real estate industry is facing today are:

The Indian real estate sector has traditionally been an unorganized sector but it is slowly evolving into a more organized one. The sector is embracing professional standards and transparency with open arms. The major established domestic players in the sector are DLF, Jaypee, Unitech, Hiranandani constructions, Tata housing, Godrej properties, Omaxe, Parsvanath and many more. International

players who have made a name for themselves in India include Hines, Tishman Speyer, Emaar properties, Ascendas, Capitaland, Portman holdings and Homex.

The road ahead India has huge potential to attract large foreign investments into real estate. With real estate reaching a point of saturation in developed countries and the demand and prices falling, global real estate players are looking at emerging economies such as India for tapping opportunities in real estate. Indian real estate will stay attractive due to its strong economic fundamentals and demographic factors. Moreover, there is a high level of global uncertainty looming over the developed and developing nations of the world. While developed economies are still struggling to regain their growth momentum, developing countries including India and china are expected to grow at a reasonably high rate. Investments in Indian real estate will fetch higher returns for investors as compared to other global markets. In the coming years, the opportunities in the real estate sector will attract more global players to India and hence will help the industry to mature, become more transparent, improve management and adopt advanced construction techniques.

4.24 SWOT Analysis of Earth Infrastructures Limited(EIL)

Strengths: 1. EIL is a zero debt company that means no financial debt from financial institutions. 2. It is one of the finest few players delivering green building concept. It has been recognized as a LEED certified. 3. In a span of 3 years it has more than 9 operating projects across india and around 1300 employees working in the company. 4. The company has tie up with International Associations building and Design Partner LBBP from Netherlands, EIGEN from U.K (designed Burj Khalifa)

Weaknesses: 1. EIL is moving towards becoming a listed company. 2. It has just been 3 years for the company so it is new in the real estate sector. 3. A project takes at least 5 years of time to get completed and since company is just 3 years old it has not yet delivered any of the projects.

Opportunities: 1. EIL works on a green building concept, this concept is an international concept and new in india and in future it has a huge amount of scope. 2. It is a zero debt company and which will help lead the company to compete at international company. 3. EIL has strong management in place which gives an opportunity to the company to acquire designed land pieces.

Threats: 1. A company has to face a lot of stiff competition as the company is newly established and there are many well established players in the market. 2. There are many new companies coming up in real sector as there is no such governing authority to restrict the entry and exit of the companies. 3. There are unavoidable government interventions which many times hamper the delivery of the projects near Greater Noida Extentio

CHAPTER V RESEARCH METHODOLOGY

CHAPTER 5- RESEARCH METHODOLOGY To study the prospects of Financial Planning in the growing economy like INDIA. People should come out of the concept of just keeping their money in Saving Account and Fixed Deposits and should concentrate on their financial planning to maximize returns by taking proper guidance from financial planner. One of the most important users of research methodology is that it helps in identifying the problem, collecting, analyzing the required information data and providing an alternative solution to the problem. It also helps in collecting the vital information that is required by the top management to assist them for the better decision making both day to day decision and critical ones.

Research Design: This project is more of an exploratory research with more of qualitative analysis than quantitative. The data collection method for this project begins with finding a sample of population. The population for this project was the entire New Delhi, Gurgaon and Noida region. The research methodology adopted was both primary and secondary. Questionnaire was designed and interviews both direct and through telephone were undertaken, to ascertain the investors behavior as well as to depict the future prospects and growth momentum of the wealth management industry. For the purpose of the study 50 investors were picked up at random and their views solicited on different parameters.

Research Problem: Expanding needs and proliferation of financial products are making it difficult for individuals to invest without planning. Most are aware that planning is critical; yet dont have the time or the expertise to develop a plan and therefore the role of financial planner comes in picture.

Factors considered for the analysis: There exists a potential growth in the portfolio management industry and thus this project authenticates the feasibility of financial planners in the market. A return of investment depends upon the preference of HNIs towards:

Risk Horizon Liquidity

Where as in the test, keeping the age factor of the respondent between 30-45 years risk being the most dominating factor among the above listed three factors. Keeping into consideration that higher risk fetches higher returns.

Research Tool and Questionnaire:

The questionnaire is a structured technique for collecting primary data in a survey. It is a series of written or verbal questions that are related to the study of the objective for which the respondent provides answers. Most of the questions asked were close ended, as they are quick to answer; the respondents were employees who have very little time to spare from. Also, at the time of analysis close-ended answers are always easy to code and interpret. Most of the questions asked by the employees were at 5-pointLikert scale technique was used to classify the raw data. It is said that a good questionnaire ends with a comment section that allows the respondent to record any other issues not covered in the questionnaire. This is one way of avoiding any frustration on the part of the respondent, as well as allowing them to express any thoughts, questions or concerns they might have. Type of Research: The research design used in this project report is Exploratory followed by Descriptive Research Design as the report attempts to describe and explain conditions by using questionnaires to fully describe the study.

CHAPTER VI DATA COLLECTION AND DATA ANALYSIS

CHAPTER 6-DATA COLLECTION AND DATA ANALYSIS

Data Collection Method & Instruments: The instrument for data collection was a structured questionnaire targeted towards people who do investments. This questionnaire was designed to know the investment psyche of a person while investing in the financial products. Various HNIs were interviewed to get depth knowledge of how the financial sectors are helping them to provide quality services and how the company is adding value to their existing portfolio. The mode of communication was informal and friendly conversation, which does not limit discussion within a welldefined boundary. Introduction to Data Analysis: When planning was completed the survey moved into the field and undertook the fieldwork, that is, distribution and collection of facts, the total number of questionnaire distributed were hundred, out of which only sixty were taken into analysis, few rejected due to incomplete data entry and few questionnaires were not filled.

Questionnaire Respond: Analysis of data Researcher must breathe life into the cold data by skillful analysis and hence he need to follow the three preliminary steps editing classifying and coding of data. The contents of data obtained in a survey were carefully checked for any possible inconsistencies or incompleteness. Then came the careful content analysis the data was then coded and tabulated according to the dummy tables prepared in advance with the help of tally making and then finally the coded was interpreted to reach a final conclusion. For the survey of the Portfolio Management of high net worth individuals at Earth Infrastructures limited, the sample size of 50 investors was taken. Random sampling is used for survey. Focus is on high net worth individuals at Earth Infrastructures limited in Delhi/NCR region. Most of the questions asked in questionnaire were close ended, as they are quick to answer; the respondents were investors who have very little time to spare from. Also, at the time of analysis close-ended answers are always easy to code and interpret. Most of the questions asked to the investors were at 5-point Likert scale technique was used to classify the raw data. In this, primary data was collected through survey (questionnaire), which was hand distributed to the present investors of the company.

The Research Analysis is explained below: Risk appetite: 6.1) I am willing to withstand minor fluctuations in my portfolio but prefer to invest in less risky investments: Table : 1 Neither agree nor disagree 8

Strongly Disagree

Disagree

Agree

Strongly Agree

27

15

Graph:1

Willing to withstand minor fluctuations in my portfolio but prefer to invest in less risky investments 00

8 16

Strongly Disagree Disagree Neither agree nor disagree Agree

27

Strongly Agree

Interpretation As the above table and graph shows that out of 50 respondents 42 respondents in the Delhi/NCR Area agree that they prefer less risky investments. The main problem is that at this time, the recession and the Inflation make the investor think before investing a even a Rs.100. The remaining 8 respondents are indifferent towards their investment decisions.

6.2)

I prefer moderate returns but averse to taking high risk:

Table : 2 Neither agree nor disagree 0

Strongly Disagree 2

Disagree 4

Agree 22

Strongly Agree 20

Graph: 2 Prefer moderate returns but averse to taking high risk

0 Strongly Disagree

20

Disagree Neither agree nor disagree Agree 22 Strongly Agree

Interpretation

As with the above analysis, it is found 42 respondents are risk averse and are satisfied with moderate returns. And remaining 6 respondents are the risk takers and agree to take high risk with their investment. It is common that this time most of the investors are looking for minimizing the risk and maximizing their profit with the short time of period.

6.3)

I seek potentially high investment returns, willing to accept higher risk:

Table : 3 Neither agree nor disagree 0

Strongly Disagree 20

Disagree 22

Agree 4

Strongly Agree 2

Graph: 3 Seek potentially high investment returns, willing to accept higher risk

0 4

2
Strongly Disagree 20 Disagree Neither agree nor disagree Agree

22

Strongly Agree

Interpretation As the above analysis gives the clear idea that most of the Investors does not like to take higher risks irrespective of getting higher returns. Only 6 respondents out of 50 are ready to take higher risks remaining 42 respondents are the risk averse.

Horizon:

6.4)

I prefer to invest for not more than 1 year to get dependent returns: Table : 4 Neither agree

Strongly Disagree 18

Disagree 15

nor disagree 0

Agree 9

Strongly Agree 8

Graph: 4 Prefer to invest for not more than 1 year to get dependent returns Strongly Disagree 8 18 9 Neither agree nor disagree Agree 0 15 Strongly Agree Disagree

Interpretation
From the above data it is interpreted that 33 respondents invest their money for more than a year in expectations of getting higher returns in long run. Only 17 respondents make investments for less than a year in expectations of getting immediate returns out of their investments.

6.5)

I am looking forward for an investment pertaining between 3-5 years with moderate returns:

Table : 5 Neither agree nor disagree 0

Strongly Disagree 10

Disagree 7

Agree 18

Strongly Agree 15

Graph: 5
Looking forward for an investment pertaining between 3-5 years with moderate returns

15

10

Strongly Disagree Disagree Neither agree nor disagree 7 Agree Strongly Agree

18

Interpretation
The analysis of the above data is that 33 respondents prefer investing in real estate for 3-5 years in expectations of getting moderate returns in long run. Only 17 respondents make investments for less than 3-5 years in expectations of getting immediate returns out of their investments.

6.6)

I am seeking for an investment which consists of long horizon varying from 5 years + to get potential returns: Table : 6

Strongly Disagree 17

Disagree 13

Neither agree nor disagree 0

Agree 15

Strongly Agree 5

Graph: 6
Seeking for an investment which consists of long horizon varying from 5 years + to get potential returns

5 17 Strongly Disagree Disagree Neither agree nor disagree Agree Strongly Agree 13 0

15

Interpretation
The analysis of the above data is that 20 respondents prefer investing in real estate for 5 and more years in expectations of getting higher returns, as they believe the rates of the property would get increased at a higher rate in long run and so they can get huge amount of profits. 30 respondents prefer making investments for less than 5 years as they are satisfied with the amount of returns they get by investing in that time horizon and wants to renew their investment portfolio.

Liquidity: 6.7) I am happy with an investment generating low but consistent returns: Table : 7

Strongly Disagree Disagree 1 4

Neither

agree

nor disagree 0

Agree 22

Strongly Agree 23

Graph: 7
Happy with an investment generating low but consistent returns

1 4

Strongly Disagree Disagree

23 22

Neither agree nor disagree Agree Strongly Agree

Interpretation From the above data it is interpreted that 45 respondents makes investment in order to generate consistent returns irrespective of the amount of the returns. Only 5 respondents are not expecting consistent returns, they are ready to wait to receive the returns.

6.8)

I am comfortable with an investment which gives moderate liquidity to my portfolio: Table : 8

Strongly Disagree 7

Disagree 12

Neither agree nor disagree 0

Agree 17

Strongly Agree 14

Graph: 8

Comfortable with an investment which gives moderate liquidity to my portfolio

Strongly Disagree 14 7 Disagree 12 17 0 Neither agree nor disagree Agree Strongly Agree

Interpretation From the above data it is interpreted that 31 respondents invests in the portfolio which gives moderate liquidity. The remaining 19 respondents are satisfied with their money invested in the real estate and are not eager to liquidate it.

6.9)

I seek substantial liquidity from my investment:

Table : 9 Strongly Disagree 5 Neither agree

Disagree 9

nor disagree 0

Agree 13

Strongly Agree 23

Graph: 9 Seek substantial liquidity from my investment

Strongly Disagree

5
Disagree

9
23 Neither agree nor disagree

0 13

Agree Strongly Agree

Interpretation From the above data it is interpreted that 36 respondents invests in the portfolio which gives substantial liquidity from their investments. The remaining 14 respondents are those to whom liquidity is not of vital importance and they are ready to wait for the returns.

CHAPTER VII FINDINGS, CONCLUSION, SUGGESTIONS

CHAPTER 7: FINDINGS, CONCLUSION, SUGGESTIONS

7.1 Research Findings & Conclusion: Risk Appetite

1) The investors go for less risky investments as they prefer to invest in safe schemes and keep a mindset of conservativeness. 2) The investors who prefer high-risk investments are less as not all people are ready to do the experiment.

Horizon

1) The people who invest are distributed amongst the basis of long term or short term. Therefore people who invest in less than one year or amidst 3-5 years or probably more than five is prolonged uniform if not equal. The short-term investors are less as compared to the long run as the investors expects potential returns out of their investments. Liquidity 1) Many investors believe in getting consistent returns whether they are small in amount. 2) Moderate returns are what the people urge for. 3) High returns are favorable and equally demanded too.

7.2 Research Suggestions: Along with risk and returns, liquidity, tax benefits and other transactional charges should be considered while investing. Financial Instruments with negative correlation in their past returns should be used in portfolio because it helps in reducing the risk by diversifying the portfolio. Fixed Income securities with high liquidity should be included in portfolio, although they provide very low returns, because high liquidity ensures the cash flow at the time of emergency cash requirements and fixed income minimizes the overall risk of portfolio to a certain extent.

7.3 Limitations of the Project As only Delhi and NCR region was dealt in the survey so it does not represent the view of the total Indian market. The sample size was restricted with fifty respondents. There was lack of time on the part of respondents. The survey was carried through questionnaire and the questions were based on perception. There may be biasness in information by market participant. Complete data was not available due to company privacy and secrecy. Some people were not willing to disclose the investment profile.

BIBLIOGRAPHY

BIBLIOGRAPHY Books: 1. Rustagi, R.P. Investment Analysis and Portfolio Management ISBN:81-8054-632-7, (2nd Edition) Sultan Chand & Sons Chapter 1- Understanding Investment, Page- 3 Chapter 10- Risk-Return Analysis in Investment, Page- 337 Chapter 11- Portfolio Theory: Portfolio Selection and Management, Page- 369 2. Khatri, Dhanesh Kumar, Security Analysis and Portfolio Management ISBN: 9780230-32878-5, Rajiv Beri for Macmillion Publishers India Ltd Chapter 1- Conceptual Background to Investment, Page- 1 Chapter 15- Portfolio Analysis, Page- 362 3. Constantinides, G. M. & Harris & Stulz R. M. Handbook of the Economics of Finance: Financial Markets and Asset Pricing, ISBN:9780444594167 , (Volume 2B) Chapter 14- Investment PerformanceA Review and Synthesis, Page-347 Chapter 17- Financial Risk Measurement for Financial Risk Management, Page- 436

Internet:

www.earthinfra.com www.google.com www.wikipedia.com www.usq.edu.au/~/media/USQ/Business-Law/.../Penny%20Clarkpdf.ashx www.iiste.org/Journals/index.php/IEL/article/download/1079/999

ANNEXURE

QUESTIONNAIRE

Name Age of Respondent: Gender: Date:

Risk appetite: 1) I am willing to withstand minor fluctuations in my portfolio but prefer to invest in less risky investments:

Strongly Disagree Disagree Neither agree nor disagree Agree Strongly Agree

2) I prefer moderate returns but averse to taking high risk:

Strongly Disagree Disagree Neither agree nor disagree Agree Strongly Agree
3) I seek potentially high investment returns, willing to accept higher risk:

Strongly Disagree


Horizon:

Disagree Neither agree nor disagree Agree Strongly Agree

1) I prefer to invest for not more than 1 year to get dependent returns:

Strongly Disagree Disagree Neither agree nor disagree Agree Strongly Agree
2) I am looking forward for an investment pertaining between 3-5 years with moderate returns:

Strongly Disagree Disagree Neither agree nor disagree Agree Strongly Agree
3) I am seeking for an investment which consists of long horizon varying from 5 years + to get potential returns:

Strongly Disagree


Liquidity:

Disagree Neither agree nor disagree Agree Strongly agree

1) I am happy with an investment generating low but consistent returns:

Strongly Disagree Disagree Neither agree nor disagree Agree Strongly Agree

2) I am comfortable with an investment which gives moderate liquidity to my portfolio:

Strongly Disagree Disagree Neither agree nor disagree Agree Strongly Agree
3) I seek substantial liquidity from my investment:

Strongly Disagree Disagree

Neither agree nor disagree Agree Strongly Agree