Académique Documents
Professionnel Documents
Culture Documents
ACKNOWLEDGEMENT
I am grateful to Mr. NITISH DIPANKAR (Area Sales Manager), our guide, for
his invaluable guidance and cooperation during the course of the program.
He provided us with his assistance and support whenever needed that has
been instrumental in completion of this program.
ICFAI-Gurgaon 1
Study of different investment strategies and portfolio management
Table of content
Sl. No. Particulars Page no.
1. Acknowledgement 1
2. Table of content 2
5. Company Profile
6. Introduction 14
b. Mutual funds 23
d. Stock market 45
9. Field survey 49
10. Analysis 51
11. Recommendation 88
ICFAI-Gurgaon 2
Study of different investment strategies and portfolio management
ICFAI-Gurgaon 3
Study of different investment strategies and portfolio management
ICFAI-Gurgaon 4
Study of different investment strategies and portfolio management
The Indian banking has come from a long way from being a sleepy
business institution to a highly proactive and dynamic entity. This
transformation has been largely brought about by the large dose of
liberalization and economic reforms that allowed banks to explore new
business opportunities rather than generating revenues from conventional
streams. The banking in India is highly fragmented with 30 banking units
contributing to almost 50% of deposits and 60% of advances.
ICFAI-Gurgaon 5
Study of different investment strategies and portfolio management
T
he Standard Bank of British South Africa founded in 1863 and the
Chartered Bank of India, Australia and China, founded in 1853. The
Standard Chartered Group was formed in 1969 through a merger of
these two banks.
Both companies were keen to capitalize on the huge expansion of trade and
to earn the handsome profits to be made from financing the movement of
goods from Europe to the East and to Africa.
ICFAI-Gurgaon 6
Study of different investment strategies and portfolio management
From the early 1990s, Standard Chartered has focused on developing its
strong franchises in Asia, the Middle East and Africa using its operations in
the United Kingdom and North America to provide customers with a bridge
between these markets. Secondly, it would focus on consumer, corporate
and institutional banking and on the provision of treasury services - areas in
which the Group had particular strength and expertise.
In the new millennium they acquired Grindlays Bank from the ANZ Group
and the Chase Consumer Banking operations in Hong Kong in 2000.
At the heart of our values lie diversity and inclusion. They are a fundamental
part of our culture, and constitute a long-term priority in our aim to become
the world's best international bank.
ICFAI-Gurgaon 7
Study of different investment strategies and portfolio management
Strategic intent
Brand promise
Values
• Responsive
• Trustworthy
• International
• Creative
• Courageous
Approach
ICFAI-Gurgaon 8
Study of different investment strategies and portfolio management
Listed on both the London Stock Exchange and the Hong Kong Stock
Exchange, Standard Chartered PLC is consistently ranked in the top 25 FTSE
100 companies by market capitalization.
Personal banking
Through our global network of over 1,700 branches and outlets, we offer
personal financial solutions to meet the needs of more than 14 million
customers across Asia, Africa and the Middle East.
Credit Cards
Accepted worldwide, our credit cards are designed to give you greater
financial freedom and flexibility.
Insurance
Enjoy peace of mind with comprehensive protection for you and your family.
International Banking
We offer a wide choice of savings accounts and banking services to suit you
and your lifestyle
ICFAI-Gurgaon 9
Study of different investment strategies and portfolio management
Our personal loans and award-winning mortgages are helping people realise
their aspirations in countries across the world.
SME Banking
Wholesale Banking
Islamic Banking
Private Banking
Commercial banking
Standard Chartered has maintained a long local presence, since 1858, with
particular emphasis on relationship banking. Significant networks have been
established with vendors and financial-related organizations to enable it to
offer the customers a comprehensive range of flexible financial services,
with special focus on transactional banking products. Supported by state-of-
the-art operations, Standard Chartered is pro-active in improving every part
of services. Electronic Delivery system has been put in place to ensure that
transactions are handled speedily.
ICFAI-Gurgaon 10
Study of different investment strategies and portfolio management
Unlimited
Freedom
Get instant cash at over 20,000 ATMs across India and over 1,000,000 ATMs
across the world through the Visa network. And get a globally valid Debit
Card that lets you shop at over 326,000 outlets in India and at over 14
million outlets across the world.
Unique Feature
Unique feature
ICFAI-Gurgaon 11
Study of different investment strategies and portfolio management
Multicity Banking
Inter Net banking - access and transact on your accounts through the
Internet from any part of the world.
No Frills Account
You can now open an account with Standard Chartered Bank, with an
average quarterly balance of as low as Rs. 250. What’s more – you can avail
of Anywhere Banking, by which you can access your account from any
branch of Standard Chartered Bank in India.
Unique Feature
ICFAI-Gurgaon 12
Study of different investment strategies and portfolio management
aaSaan
Unique Feature
Other Facilities
International Debit Card
Phone banking
Net Banking
Extended banking hours
Locker facility
Door-step banking.
ICFAI-Gurgaon 13
Study of different investment strategies and portfolio management
Introduction
Indian economy and Investment Sectorial growth
The economy has been growing at an average growth rate of 8.8 per
cent in the last four fiscal years (2003-04 to 2006-07), with the 2006-07
growth rate of 9.6 per cent being the highest in the last 18 years.
Significantly, the industrial and service sectors have been contributing a
major part of this growth, suggesting the structural transformation
underway in the Indian economy.
Within the investment sector the real estate is raising sky high due to
ICFAI-Gurgaon 14
Study of different investment strategies and portfolio management
The Rise of the Middle-Class: 300 million and growing with higher
disposable incomes and even higher aspirations; educated, professional
workforce driving urbanization beyond the traditional metro cities.
INVESTMENTS
I
nvestment = Cost Of Capital, like buying securities or other monetary or paper
(financial) assets in the money markets or capital markets, liquid real assets,
such as gold, real estate, or collectibles. Types of financial investments include
shares, other equity investment, and bonds. These financial assets are then
expected to provide income or positive future cash flows, and may increase or
decrease in value giving the investor capital gains or losses.
People usually invest when they have good amount of ideal money to
spend. The main objective is to save money for future uncertainties, capital
appreciation, more income and most of all tax savings.
ICFAI-Gurgaon 15
Study of different investment strategies and portfolio management
Most investors and advisors spend a great deal of time understanding the
merits of the thousands of investments available in India. Little time,
however, is spent understanding the needs of the investor and ensuring that
the most appropriate investments are selected for him.
• Life Cover:- Many investors look for investments that offer good
return with adequate life cover to manage the situations in case of any
eventualities. Recent days investors do invest in the endowment
policies and ULIPs.
ICFAI-Gurgaon 16
Study of different investment strategies and portfolio management
• Ease of withdrawal: This refers to the ability to invest long term but
withdraw funds when desired. This is strongly linked to a sense of
ownership. It is normally triggered by a need to spend capital, change
investments or cater to changes in other needs.
Investment Planning
Investors need to identify the financial goals throughout life or for the
next 10 to 15 years depending upon the time horizon selected by the
investor, and prioritizing them. Investment Planning is important because it
helps in deriving the maximum benefit from the investments.
ICFAI-Gurgaon 17
Study of different investment strategies and portfolio management
Risk tolerance - The biggest risk is the risk of losing the money that
has been invested, but the main thing is to how much investor can
cover up and sustain with that. Another equally important risk is that
investments may not provide enough growth or income to offset the
impact of inflation, which could lead to a gradual increase in the cost
of living. There are additional risks as well (like decline in economic
growth). But the biggest risk of all is not investing at all.
ICFAI-Gurgaon 18
Study of different investment strategies and portfolio management
Investment is not only prediction it has its own reasons behind every up and
down in the market. So it is has its own theory to move in particular
directions. To get in to the market investors must go through the following
process.
ICFAI-Gurgaon 19
Study of different investment strategies and portfolio management
Analyse the Profile: - The next step would be analyse the risk-return
profile of the investor on to the investment portfolio. The investment
instruments are matched with the risk-return profile of the investor.
All the investment alternatives that offer expected rate of return are
evaluate for consideration.
ICFAI-Gurgaon 20
Study of different investment strategies and portfolio management
Consistent Monitoring
Investmen Analyse the
t planning Profile
Preparing an
Optimum Portfolio
Saving Bank account (SB account) is meant to promote the habit of saving
among the people. It also facilitates safekeeping of money. In this scheme
fund is allowed to be withdrawn whenever required, without any condition.
Hence a savings account is a safe, convenient and affordable way to save
money. Banks generally put some restrictions on the total number of
withdrawals permitted during specific time periods. Banks also stipulate
certain minimum balance to be maintained in savings accounts. Normally a
higher minimum balance is stipulated in cheque operated accounts as
compared to non-cheque operated accounts.
Features:
The minimum amount to open an account in a nationalized bank is Rs 500.
If cheque books are also issued, the minimum balance of Rs 1000 has to be
maintained. However in some private or foreign bank the minimum balance
ICFAI-Gurgaon 21
Study of different investment strategies and portfolio management
is Rs 5,000 or more and can be up Rs. 10,000. One cheque book is issued to
a customer at a time.
Return
Interest @ 3.5 % p.a. with effect from 1/3/2003.
The amount of interest will be calculated for each calendar month on the
lowest balance in credit of any account between the close of the tenth day
and the last day of each month. In Savings Bank account, bank follows the
simple interest method. The rate of interest may change from time to time
according to the rules of Reserve Bank of India.
One can withdraw his/her money by submitting a cheque in the bank and
details of the account, i.e. the Money deposited, withdrawn along with the
dates and the balance, is recorded in a passbook.
• Advantages
It's much safer to keep your money at a bank than to keep a large
amount of cash in your home.
• Bank deposits are fairly safe because banks are subject to control of
the Reserve Bank of India with regard to several policy and
operational parameters, many of the banks also give internet banking
facility through with one do the transactions like withdrawals,
deposits, statement of account etc.
• Banks provide Auto-Mated Teller machine(ATM) for 24 hours cash
withdrawn, some banks also have 24 hours open branches in very few
selected cities.
ICFAI-Gurgaon 22
Study of different investment strategies and portfolio management
• A minor who have completed ten years of age can also open and
operate the account.
• At the time of opening an account one must submit the documents like
photocopy of passport or Electoral card, Postal identification card as
address proof and two passport size photos.
• Most banks also require an introduction for opening an SB account.
The introduction may be obtained either from an existing account
holder or from a respectable citizen, well known to the bank, which
should normally call on the bank and sign in the column specially
provided for the purpose of introduction in the account opening form.
A mutual fund is nothing more than a collection of stocks and/or bonds. You
can think of a mutual fund as a company that brings together a group of
people and invests their money in stocks, bonds, and other securities. Each
investor owns shares, which represent a portion of the holdings of the fund.
Funds will also usually give you a choice either to receive a check for
distributions or to reinvest the earnings and get more shares.
ICFAI-Gurgaon 23
Study of different investment strategies and portfolio management
Economies of Scale- Because a mutual fund buys and sells large amounts of
securities at a time, its transaction costs are lower than what an individual
would pay for securities transactions.
Liquidity- Just like an individual stock, a mutual fund allows you to request
that your shares be converted into cash at any time.
Simplicity - Buying a mutual fund is easy! Pretty well any bank has its own
line of mutual funds, and the minimum investment is small. Most companies
also have automatic purchase plans whereby as little as $100 can be
invested on a monthly basis.
ICFAI-Gurgaon 24
Study of different investment strategies and portfolio management
• Costs - Mutual funds don't exist solely to make your life easier - all funds
are in it for a profit. The mutual fund industry is masterful at burying costs
under layers of jargon. These costs are so complicated that in this tutorial
we have devoted an entire section to the subject.
• Taxes - When making decisions about your money, fund managers don't
consider your personal tax situation. For example, when a fund manager
sells a security, a capital-gains tax is triggered, which affects how profitable
the individual is from the sale. It might have been more advantageous for
the individual to defer the capital gains liability.
No matter what type of investor you are, there is bound to be a mutual fund
that fits your style. According to the last count there are more than 10,000
mutual funds in North America! That means there are more mutual funds
than stocks.
It's important to understand that each mutual fund has different risks and
rewards. In general, the higher the potential return, the higher the risk of
loss. Although some funds are less risky than others, all funds have some
level of risk - it's never possible to diversify away all risk. This is a fact for all
investments.
Each fund has a predetermined investment objective that tailors the fund's
assets, regions of investments and investment strategies. At the
fundamental level, there are three varieties of mutual funds:
1) Equity funds (stocks)
2) Fixed income funds (bonds)
3) Money market funds.
ICFAI-Gurgaon 25
Study of different investment strategies and portfolio management
All mutual funds are variations of these three asset classes. For example,
while equity funds that invest in fast-growing companies are known as
growth funds, equity funds that invest only in companies of the same sector
or region are known as specialty funds.
Let's go over the many different flavors of funds. We'll start with the safest
and then work through to the more risky.
Bond/Income Funds:
Income funds are named appropriately: their purpose is to provide current
income on a steady basis. When referring to mutual funds, the terms "fixed-
income," "bond," and "income" are synonymous. These terms denote funds
that invest primarily in government and corporate debt. While fund holdings
may appreciate in value, the primary objective of these funds is to provide a
steady cash flow to investors. As such, the audience for these funds consists
of conservative investors and retirees.
Bond funds are likely to pay higher returns than certificates of deposit and
money market investments, but bond funds aren't without risk. Because
there are many different types of bonds, bond funds can vary dramatically
depending on where they invest. For example, a fund specializing in high-
yield junk bonds is much more risky than a fund that invests in government
securities. Furthermore, nearly all bond funds are subject to interest rate
risk, which means that if rates go up the value of the fund goes down.
Balanced Funds:
The objective of these funds is to provide a balanced mixture of safety,
income and capital appreciation. The strategy of balanced funds is to invest
in a combination of fixed income and equities. A typical balanced fund might
have a weighting of 60% equity and 40% fixed income. The weighting might
also be restricted to a specified maximum or minimum for each asset class.
ICFAI-Gurgaon 26
Study of different investment strategies and portfolio management
Equity Funds:
Funds that invest in stocks represent the largest category of mutual funds.
Generally, the investment objective of this class of funds is long-term capital
growth with some income. There are, however, many different types of
equity funds because there are many different types of equities. A great way
to understand the universe of equity funds is to use a style box, an example
of which is below.
The idea is to classify funds based on both the size of the companies
invested in and the investment style of the manager. The term value refers
to a style of investing that looks for high quality companies that are out of
favor with the market. These companies are characterized by low P/E and
price-to-book ratios and high dividend yields. The opposite of value is
growth, which refers to companies that have had (and are expected to
continue to have) strong growth in earnings, sales and cash flow. A
compromise between value and growth is blend, which simply refers to
companies that are neither value nor growth stocks and are classified as
being somewhere in the middle.
For example, a mutual fund that invests in large-cap companies that are in
strong financial shape but have recently seen their share prices fall would be
placed in the upper left quadrant of the style box (large and value). The
opposite of this would be a fund that invests in startup technology
companies with excellent growth prospects. Such a mutual fund would
reside in the bottom right quadrant (small and growth).
Global/International Funds:
An international fund (or foreign fund) invests only outside your home
country. Global funds invest anywhere around the world, including your
home country.
It's tough to classify these funds as either riskier or safer than domestic
ICFAI-Gurgaon 27
Study of different investment strategies and portfolio management
Specialty Funds:
This classification of mutual funds is more of an all-encompassing category
that consists of funds that have proved to be popular but don't necessarily
belong to the categories we've described so far. This type of mutual fund
forgoes broad diversification to concentrate on a certain segment of the
economy.
Regional funds make it easier to focus on a specific area of the world. This
may mean focusing on a region (say Latin America) or an individual country
(for example, only Brazil). An advantage of these funds is that they make it
easier to buy stock in foreign countries, which is otherwise difficult and
expensive. Just like for sector funds, you have to accept the high risk of
loss, which occurs if the region goes into a bad recession.
Index Funds:
The last but certainly not the least important are index funds. This type of
mutual fund replicates the performance of a broad market index such as the
S&P 500 or Dow Jones Industrial Average (DJIA). An investor in an index
fund figures that most managers can't beat the market. An index fund
merely replicates the market return and benefits investors in the form of low
fees.
Costs are the biggest problem with mutual funds. These costs eat into your
return, and they are the main reason why the majority of funds end up with
sub-par performance.
ICFAI-Gurgaon 28
Study of different investment strategies and portfolio management
What's even more disturbing is the way the fund industry hides costs
through a layer of financial complexity and jargon. Some critics of the
industry say that mutual fund companies get away with the fees they charge
only because the average investor does not understand what he/she is
paying for.
• The cost of hiring the fund manager(s) - Also known as the management
fee, this cost is between 0.5% and 1% of assets on average. While it sounds
small, this fee ensures that mutual fund managers remain in the country's
top echelon of earners. Think about it for a second: 1% of 250 million (a
small mutual fund) is $2.5 million - fund managers are definitely not going
hungry! It's true that paying managers is a necessary fee, but don't think
that a high fee assures superior performance.
On the whole, expense ratios range from as low as 0.2% (usually for index
funds) to as high as 2%. The average equity mutual fund charges around
1.3%-1.5%. You'll generally pay more for specialty or international funds,
which require more expertise from managers.
• Front-end loads - These are the most simple type of load: you pay the fee
when you purchase the fund. If you invest Rs.1,000 in a mutual fund with a
5% front-end load, Rs.50 will pay for the sales charge, and Rs. 950 will be
invested in the fund.
ICFAI-Gurgaon 29
Study of different investment strategies and portfolio management
• Back-end loads (also known as deferred sales charges) - These are a bit
more complicated. In such a fund you pay the back-end load if you sell a
fund within a certain time frame. A typical example is a 6% back-end load
that decreases to 0% in the seventh year. The load is 6% if you sell in the
first year, 5% in the second year, etc. If you don't sell the mutual fund until
the seventh year, you don't have to pay the back-end load at all.
A no-load fund sells its shares without a commission or sales charge. Some
in the mutual fund industry will tell you that the load is the fee that pays for
the service of a broker choosing the correct fund for you. According to this
argument, your returns will be higher because the professional advice put
you into a better fund. There is little to no evidence that shows a correlation
between load funds and superior performance. In fact, when you take the
fees into account, the average load fund performs worse than a no-load
fund.
In the Indian economy Mutual funds have grown faster than any other
investment instrument.
The table show net capitalization in Mutual fund sector during 2002 to 2007.
1
Handbook of Statistics on Indian Economy, Reserve Bank Of India 2006-07
ICFAI-Gurgaon 30
Study of different investment strategies and portfolio management
NAV: -mutual fund's price per share or exchange-traded fund's (ETF) per-
share value. In both cases, the per-share rupee amount of the fund is
derived by dividing the total value of all the securities in its portfolio, less
any liabilities, by the number of fund shares outstanding.
In the context of mutual funds, NAV per share is computed once a day
based on the closing market prices of the securities in the fund's portfolio.
All mutual fund’s buy and sell orders are processed at the NAV of the trade
date. However, investors must wait until the following day to get the trade
price.
Mutual funds pay out virtually all of their income and capital gains. As a
result, changes in NAV are not the best gauge of mutual fund performance,
which is best measured by annual total return.
Because ETFs and closed-end funds trade like stocks, their shares trade at
market value, which can be a dollar value above (trading at a premium) or
below (trading at a discount) NAV.
ICFAI-Gurgaon 31
Study of different investment strategies and portfolio management
FIFO Method
This method assumes that shares you sell come out of the earliest-acquired
blocks you own. In a rising market, FIFO tends to generate the biggest tax
bill, because the oldest, cheapest shares are considered sold first. However,
FIFO also increases the odds that your gains will be long term and therefore
qualify for the 20% maximum rate.
FIFO is the "default" method. In other words, you must use FIFO to calculate
mutual fund gains and losses,
Specific ID Method
Under this method, one specifies exactly which block (or blocks) of mutual
fund shares you intend to sell, so you can minimize gains or maximize losses
by selling your highest-cost shares first.
Selling the most expensive shares could mean his/her gains will be short
term and therefore taxed at regular income tax rate rather than the long-
term capital gains rate of 15%. However, if you are selling losers, it's
generally better to sell short-term shares. Your short-term losses will then
offset short-term gains that would otherwise be taxed at your income tax
rate.
This method is available when one leaves his/her mutual fund shares on
deposit in an account with an agent or custodian, but not when he/she
actually has possession of share certificates.
Each time investor makes a sale, he simply figures his average presale basis
for shares of that fund. For holding period purposes, investor is considered
to sell the oldest shares first.
ICFAI-Gurgaon 32
Study of different investment strategies and portfolio management
Here you separate shares into two pools — one consisting of all long-term
shares (held over 12 months), and the other consisting of all short-term
shares. Then each time you sell, you calculate the average per-share basis
for each pool. You can then sell strictly out of one pool or the other, or mix
and match as you see fit. The advantage is you have more flexibility to
control the basis of the shares being sold and whether the resulting gains
will be taxed at 15% or your regular rate.
Wide variety of Mutual Fund Schemes exists to cater to the needs such as
financial position, risk tolerance and return expectations etc. The table below
gives an overview into the existing types of schemes in the Industry.
• By Structure
o Interval Schemes
• By Investment Objective
o Growth Schemes
o Income Schemes
o Balanced Schemes
• Other Schemes
o Special Schemes
Index Schemes
2
From finance.indiamart.com
ICFAI-Gurgaon 33
Study of different investment strategies and portfolio management
ICFAI-Gurgaon 34
Study of different investment strategies and portfolio management
ICFAI-Gurgaon 35
Study of different investment strategies and portfolio management
Life insurance is a financial resource for one’s family and loved ones in case
of his death. It is a contract between insurer and an insurance company in
which the company provides the beneficiaries with a certain amount of
money upon insurer death. In return, insurer pays periodic payments
(premiums) in an amount that depends on medical history, age, gender, and
occupation.
Background3
Though the history of insurance dates back to 1818 with the establishment
of the Oriental Life Insurance company in Calcutta, and then when LIC was
established in the year 1956. For private life insurance sector in particular
things started taking shape after the recommendation of Malhotra
committee which put forward a proposal for the establishment of the
regulatory body and also encouraged to set up unit linked insurance pension
plan. It was after his recommendation that IRDA (Insurance regulatory and
development authority) was established in April 2000. After that in the year
2001 the sector was finally opened for the private players and foreign
private. They are allowed to have 26% share in Indian company. The real
innovation happened in this time only, when Life insurance companies
introduced ULIPs with greater flexibilities. After making a magnificent entry
and becoming the most popular life insured product.
Due to IRDA the transparency and rules and regulations are still here in the
insurance market.
3
(insurance chronicle, Icfai publications & current scenario by jawahar)
ICFAI-Gurgaon 36
Study of different investment strategies and portfolio management
Endowment plans are life insurance plans, which not only cover the
individual’s life in case of eventuality but also offer a maturity benefit at the
end of the term.
In the event of the individual’s demise, his/her nominees receive the sum
assured with accumulated profits/bonus on investments (till the time of his
demise). In case the individual survives the tenure, he/she receives the sum
assured and accumulated profits/bonus.
4
Business India, may ‘05
Business India, Feb ‘06
Business India, March ‘06
ICFAI-Gurgaon 37
Study of different investment strategies and portfolio management
in products like fixed deposits, bonds, debt funds, diversified equity funds
and stocks. There is another class of individuals who take insurance to
provide for their family in case of an eventuality. So typically both these
categories of individuals have a portfolio of investment as well as life
insurance.
Insurance sector in India is one of the booming sectors of the economy and
is growing at the rate of 15-20 per cent annum. Together with banking
services, it contributes to about 7 per cent to the country's GDP.
Key Players
This section provides an overview of some of the key players in this industry
like Bajaj Allianz, ING Vysya, SBI Life, Tata AIG Life, HDFC Standard, ICICI
Prudential Life Insurance, Birla Sunlife, Aviva Life Insurance, Kotak Mahindra
Old Mutual, Max New York Life, Met Life, Sahara Life, LIC, Tata-AIG General,
Reliance General, IFFCO-Tokio, ICICI-Lombard, HDFC Chubb, New India
Assurance Company Limited, National Insurance Company Limited, United
India Insurance Company Limited and Oriental Insurance Limited.
1. Premiums paid can be single, regular or variable. The payment period too
can be regular or variable. The risk cover can be increased or decreased.
2. As in all insurance policies, the risk charge (mortality rate) varies with
age.
ICFAI-Gurgaon 38
Study of different investment strategies and portfolio management
3. The maturity benefit is not typically a fixed amount and the maturity
period can be advanced or extended.
7. The costs in ULIP are higher because there is a life insurance component
in it as well, in addition to the investment component.
10. Being transparent the policyholder gets the entire episode on the
performance of his fund.
12. ULIP products are exempted from tax and they provide life insurance.
14. Investor gets an option to choose among debt, balanced and equity
funds.
Similarly ULIP investors have the option of investing across various schemes
similar to the ones found in the mutual funds domain, i.e. diversified equity
funds, balanced funds and debt funds to name a few.
ICFAI-Gurgaon 39
Study of different investment strategies and portfolio management
Mutual fund investors have the option of either making lump sum
investments or investing using the systematic investment plan (SIP) route
which entails commitments over longer time horizons. The minimum
investment amounts are laid out by the fund house.
ULIP investors also have the choice of investing in a lump sum (single
premium) or using the conventional route, i.e. making premium payments
on an annual, half-yearly, quarterly or monthly basis. In ULIPs, determining
the premium paid is often the starting point for the investment activity.
ICFAI-Gurgaon 40
Study of different investment strategies and portfolio management
On the other hand most insurance companies permit their ULIP inventors to
shift investments across various plans/asset classes either at a nominal or
no cost (usually, a couple of switches are allowed free of charge every year
and a cost has to be borne for additional switches).
With these comparable there are certain factors where in these two differ.
Mutual funds are essentially short to medium term products. The liquidity
that these products offer is valuable for investors. ULIPs, in contrast, are
positioned as long-term products and going ahead, there will be separate
playing fields for ULIPS and MFs, with the product differentiation between
them becoming more pronounced. ULIPs do not seek to replace mutual
funds, they offer protection against the risk of dying too early, and also help
people save for retirement. Insurance has to be an integral part of one's
wealth management portfolio. Further, exposure of Indian households to
capital markets is limited.
ULIPs and mutual funds are, therefore, not likely to cannibalize each other in
the long run. The primary objective of an insurance product is protection.
The whole reason why it has evolved as a savings plan in the minds of
certain people is because there is a significant savings component attached
to it; however, it is still not the primary purpose of the plan. Second, there
are various kinds of insurance products; the element of protection in each
varies. In certain plans the level of protection is low and the savings
component high, but that is a choice to the customer.
ICFAI-Gurgaon 41
Study of different investment strategies and portfolio management
It wasn't too long back, when the good old endowment plan was the
preferred way to insure oneself against an eventuality and to set aside some
savings to meet one's financial objectives. Then insurance was thrown open
to the private sector. The result was the launch of a wide variety of
insurance plans, including the ULIPs.
Two factors were responsible for the advent of ULIPs on the domestic
insurance horizon. First was the arrival of private insurance companies on
the domestic scene. ULIPs were one of the most significant innovations
introduced by private insurers. The other factor that saw investors take to
ULIPs was the decline of assured return endowment plans. Of course, the
regulator -- IRDA (Insurance and Regulatory Development Authority) was
instrumental in signaling the end of assured return plans.
Today, there is just one insurance plan from LIC (Life Insurance
Corporation) -- Komal Jeevan -- that assures return to the policyholder.
These were the two factors most instrumental in marking the arrival of
ULIPs, but another factor that has helped their cause is a booming stock
market. While this now appears as one of the primary reasons for their
popularity, we believe ULIPs have some fundamental positives like enhanced
flexibility and merging of investment and insurance in a single entity that
have really endeared them to individuals.
A. EXPENSES
ICFAI-Gurgaon 42
Study of different investment strategies and portfolio management
Broadly speaking, ULIP expenses are classified into three major categories:
1) Mortality charges
These charges are levied by the insurance company to meet the expenses
incurred on managing the ULIP investments. A portion of ULIP premiums are
invested in equities, bonds, and money market instruments. Managing these
investments incurs a fund management charge, similar to what mutual
funds incur on their investments. FMCs differ across investment options like
aggressive, balanced and debt ULIPs; usually a higher equity option
translates into higher FMC.
Apart from the three expense categories mentioned above, individuals may
also have to incur certain expenses, which are primarily 'optional' in nature-
the expenses will be incurred if certain choices that are made available to
individuals are exercised.
a) Switching charges
ICFAI-Gurgaon 43
Study of different investment strategies and portfolio management
b) Top-up charges
c) Cancellation charges
B. FLEXIBILITY
There are insurance companies that offer as many as five options within a
ULIP with the equity component varying from zero to a maximum of 100%.
You can select an option that best fits your objectives and risk-taking
capacity.
Having selected an option, you still have the flexibility to switch to another
option. Most insurance companies allow a number of free 'switches' in a
year.
ULIPs also have a facility that allows you to skip premiums after regular
payment in the initial years. For instance, if you have paid your premiums
religiously over the first three years, you can skip the fourth year's
ICFAI-Gurgaon 44
Study of different investment strategies and portfolio management
premium. The insurance company will make the necessary adjustments from
your investment surplus to ensure the policy does not lapse.
With traditional endowment, there are no investment options. You select the
only option you have and must remain with it till maturity. There is also no
concept of a top-up facility.
C. LIQUIDITY
Another flexibility that ULIPs offer the individual is liquidity. Since ULIP
investments are NAV-based it is possible to withdraw a portion of your
investments before maturity. Of course, there is an initial lock-in period (3
years) after which the withdrawal is possible.
D. TAX BENEFITS
Taxation is one area where there is common ground between ULIPs and
traditional endowment. Premiums in ULIPs as well as traditional endowment
plans are eligible for tax benefits under Section 80C subject to a maximum
limit of Rs 100,000. On the same lines, monies received on maturity on
ULIPs and traditional endowments are tax-free under Section 10.
ICFAI-Gurgaon 45
Study of different investment strategies and portfolio management
NSE has around 1500 shares listed with a total market capitalization of
around Rs. 9,21,500 crore. The BSE has over 6000 stocks listed and has a
market capitalization of around Rs. 9,68,000 crore.
Most key stocks are traded on both the exchanges and hence the investor
could buy them on either exchange. Both exchanges have a different
settlement cycle, which allows investors to sift their positions on the
bourses. The primary index of BSE is BSE Sensex comprising of 30 stocks.
NSE has the S&P NSE 50 Index (Nifty) which consists of fifty stocks.
The BSE Sensex is the older and more widely followed index. Both these
indices are calculated on the basis of market capitalization and contain the
heavily traded shares from key sectors.
Both exchanges have switched over from the open outcry trading system to
a fully automated computerized mode of trading known as BOLT (BSE online
trading) and NEAT (National Exchange Automated Trading) system. It
facilitates more efficient processing, automatic order matching, faster
execution of trades and transparency.
The scripts traded on the BSE have been classified into ‘A’,’B1’,’B2’,’C’, ‘F’,’Z’
groups. The ‘A’ group shares represent those, which are in the carry forward
system (Badla).
The ‘F’ group represents the debt market (fixed income securities) segment.
The ‘C’ group covers the odd lot securities in ‘A’, ‘B1’, & ‘B2’ groups and
rights renunciations.
ICFAI-Gurgaon 46
Study of different investment strategies and portfolio management
5
Term deposits
Investor some time pledge these term deposits to take house loan,
personal load, education load, etc. these works as the security deposits or
asset of the debtor.
5
Investopedia.com
ICFAI-Gurgaon 47
Study of different investment strategies and portfolio management
Bonds in India.
One way is to arrange for banks or others to lend the money. But a
generally less expensive way is to issue (sell) bonds. The organization will
agree to pay some interest rate on the bonds and further agree to redeem
the bonds (i.e., buy them back) at some time in the future (the redemption
date).
A bearer bond is a bond with no owner information upon it; presumably the
bearer is the owner. Bearer bonds included coupons which were used by the
bondholder to receive the interest due on the bond.
ICFAI-Gurgaon 48
Study of different investment strategies and portfolio management
In general there are few types of bonds available in the market to buy, like;
Corporate bonds – A company can issue bonds just as it can issue stock.
Generally, a short term corporate bond is less than five years; intermediate
is five to twelve years, and long term is over 12 years.
Bondholders are not owners of the corporation. But if the company gets in
financial trouble and needs to dissolve, bondholders must be paid off in full
before stockholders get anything.
6
Security analysis and portfolio management by Ritu Ahuja
ICFAI-Gurgaon 49
Study of different investment strategies and portfolio management
FIELD SURVEY
The field survey was based on the investment strategies taken by the small
investors and the instrument they prefer to invest. To fulfill the particular I
have done field survey in about 160 people in the NCR. The entire summer
internship is surrounded by this investment strategy and making portfolio.
After gathering the entire data sheet I have put it in the excel
sheet and started analyzing.
ICFAI-Gurgaon 50
Study of different investment strategies and portfolio management
Limited time.
ICFAI-Gurgaon 51
Study of different investment strategies and portfolio management
ANALYSIS
GRAPHICAL PRESENTATION
Explanation :-
The above pie chart shows that the sample of 153 is predominantly
consists of respondents of the age groups of 18-30 years and 31-40 years.
This reveals that most of the investors are them who are started their carrer
recently or working for 10-15 years. This also shows that the age group of
greater than 50 years are very less interested in invetment.
ICFAI-Gurgaon 52
Study of different investment strategies and portfolio management
Explanation :-
This graph shows that the respondents are mostly from the service
class (61%) and business person consists of only 37% of respondents.Self
employed are very less in numbers.
ICFAI-Gurgaon 53
Study of different investment strategies and portfolio management
Explanation :-
ICFAI-Gurgaon 54
Study of different investment strategies and portfolio management
Explanation :-
ICFAI-Gurgaon 55
Study of different investment strategies and portfolio management
Explanation :-
Tax saving is the major concern now in india. The above pie alsoshow
that 40% of people want to invest for the taxsavings, but that is for only 1.5
lakh. It is expeacted that before the investment investors focus would be the
main criteria where he wants to invest in. depending up on the reponse I
have found out that 18% people invest to secure for Future Uncertainties
and 19% fight against inflation and do invest for only Capital Preservation.
Only 9% people focus on their retirement time and invest for vesting
period.
ICFAI-Gurgaon 56
Study of different investment strategies and portfolio management
Explantion :-
23% investors are the short term investor as they want to get out of
market with in 3 years. But it is healthy for the investment market thst
18% investors want to stay invested for 6-9 years and 17% more than
10 years. These long term investors are keeping the market more stable
than the short term investors.
ICFAI-Gurgaon 57
Study of different investment strategies and portfolio management
Explanation :-
The research showed that the most investors are risk averse and goo
for the moderate risk. 42% investors are in this category. This is good news
for the market that only 22% of insvestors are with low risk apetite. The low
risk apetite investor mostly invested in the fixed return instruments.
7% investors have very high and 29% investors have high risk profile,
they useally invest in the stocks and mutual fund, where the ris is high and
the returns are also high in proportion.
ICFAI-Gurgaon 58
Study of different investment strategies and portfolio management
Explanation :-
In the above pie chart ‘Never accept return’ shows the group with low
risk appetite where as ‘once in 3 years’ & ‘once in 5 years’ represents the
group with moderate risk appetite. ‘once in 7 years’ & ‘can fluctuate in
long run’ represents the group with high or very high risk appetite.
Though this is not applied to all, as risk assumption is different for every
other person.
ICFAI-Gurgaon 59
Study of different investment strategies and portfolio management
Explanation :-
It clearly shows that the age group of 18-30 years has the most
disposible income per month because most of them are single. More the age
grows the disposible income reduced may be because the family expance
and the living expance increased.
So from the company’s point of view 18-30 years age group is the
most potential investors and usually this age group is investing for more
profit.
ICFAI-Gurgaon 60
Study of different investment strategies and portfolio management
Explanation :-
Most of the investors are invested in the insurance sector. The age
group of 18-30 years are highly invested in the mutual funds and share
market. This group also invested equally in the FDs and RBI bonds.
The 31-40 years age group is also invested in all the instrument but
they are quite heavily invested in the real estate sectors. But the number of
respondent in this group is less than the 18-30 years sge group.
The more than 50 years age group are most invested in the FD & RBI
bonds. They are less invested in the shares and the mutual funds.
ICFAI-Gurgaon 61
Study of different investment strategies and portfolio management
Explanation :-
In the above bar graph it is clear that 18-30 years age group have
more risk taking ability than the other age groups, number of respondent in
very high, high are most in this age group. The reason behind this is that
this age group wants to earn more and they are only in the beginning of
their carrer.
The next group which is next this is the 31-40 age group in which
most are family person and for that reason the are with mostly moderate
risk profile.
ICFAI-Gurgaon 62
Study of different investment strategies and portfolio management
Explanation:-
Those who invest for very few years (<3 years) the are the short term
investors and the risk takers. They usually invest for the high gain in short
term. The above bar graph shows that age group 18-30 years dominating in
this sector.
Most of the respondents are in the 3-5 years group. They remain
invested for the a full cycle of bear turn and bull turn.
The age group of 31-40 years are likely to remain invested in 6-9
years because if they could invest in the beginning of the bull turn then they
can make highest profit after 3 market cycle.
Only the Real Estate investors wants to invested more than 10 years.
ICFAI-Gurgaon 63
Study of different investment strategies and portfolio management
Expalnation :-
The age group of >50 years are also risk averse they can not tolerate
any fluctuuation in return part in longer time but they can tolerate minute
losses in 7 and 3 years return.
18-30 year age group response are evenly distributed in all ranges of
negative return acceptibility.
ICFAI-Gurgaon 64
Study of different investment strategies and portfolio management
Explanation:-
This graph shows that different disposible income group has different
risk tolerence. The < 5,000 Rs income group is with moderate risk takers.
The next group 10,000-15,000 Rs has diversified their risk, this group
tend to invest in diversified intrument where risk is diluted due to diversity
of risk profile.
ICFAI-Gurgaon 65
Study of different investment strategies and portfolio management
Explanation:-
Time horizon decides the tenure the investor remain invested in the
market. This depics the investment potential along with risk tolerence.
The above graph shows that the Disposible income group of > 20,000 Rs are
intended to quick return,so they intended to invest for below 3 years. 36%
of respondent from more than 20,000 Rs group.
ICFAI-Gurgaon 66
Study of different investment strategies and portfolio management
Explanation:-
Here in every disposible income group ‘Tax savings’ is one of the main
primary focus. But it has seen that 10,000-15,000 Rs group is more end
towards the ‘Capital Preservation’ & ‘Tax savings’.
The above 20,000 Rs disposible income group are not focused towards the
‘Retirement’, they are focus to tax savings.
The 15,000-20,000 disposible income group has a primary focus of all the
priorities. This is the group which has a mind set of all the rpimary focuses.
ICFAI-Gurgaon 67
Study of different investment strategies and portfolio management
Explanation:-
The safe players are always want less negative return and fixed
return in the fixed tenure. Here in ths bar graph the below 5,000 Rs
disposible income group are the safe players, only 9% of this group has a
high negative return acceptability.
ICFAI-Gurgaon 68
Study of different investment strategies and portfolio management
Explanation:-
This graph will show how investors of different category tend to invest.
Here in this bar graph service category are like to invest in the Fixed
Deposits (23%) and Mutual Funds (24%). Fixed deposits gives a fiex return
where as in mutual funds the risk is diversified.
Business class is more attracted towards the Shares (18%) and real estate
(17%) because they have the lum sum amount to invest in the single time.
More over they also invest in the mutual funds where high risk may be taken
for the higher return.
For the Self employed category, they are mostly invested in the Fixed
Deposits (37%) and Insurance sector(36%).
ICFAI-Gurgaon 69
Study of different investment strategies and portfolio management
Explanation:-
In the Service category the investment focus is the tax savings, 46%
investor prioritised Tax savings as their first priority of investment. Where as
income, retirement, capital preservation are the minor priority for them.
For the Business class Capital preservation and Future Uncertainity playes a
big role in their investment planning. Nearly 46% investors are in this
category.
Self employed are very few in number in my survey so I have not consider
them in this explanation.
ICFAI-Gurgaon 70
Study of different investment strategies and portfolio management
Explanation:-
Negative return acceptance is a another way to find out the risk tolerence.
In this graph Self employed category 75% responded they can not accept
negative return. Only 25% responded they can accept negative return in 7
years.
In Service category most investors are risk averse, 39% never accept
negative return, but few of them are now started to invest in the riskier
profile so negative acceptability is present.
For the business class, they are mostly invested in shares & mutual funds,
as results they responded ‘Once in 3 years’ and ‘Can fluctuate in long term’.
The investor who want to stay for 3 years are the short term players,where
as the long term players can accept ups & downs in their investment for the
higher return.
ICFAI-Gurgaon 71
Study of different investment strategies and portfolio management
Explanation:-
The above graph shows that in all the occupation nearly 22% -25%
investors are want to quit before 3 years. This may be because of the short
term investment.
In the service category 21% invetors are want to stay invested for more
than 10 years this is because the are invested in the real estate and long
term invesment instrument like bonds.
ICFAI-Gurgaon 72
Study of different investment strategies and portfolio management
SPSS ANALYSIS
TABULAR PRESENTATION
Hypothesis:
Null hypothesis: There is no relationship between investor’s annual income and
time horizon.
Alternative hypothesis: Relationship present between annual income and time
horizon.
Crosstabs
Case Processing Summary
Cases
Valid Missing Total
N Percent N Percent N Percent
annual income *
Withdraw money from 161 100.0% 0 .0% 161 100.0%
investment
annual income *
161 100.0% 0 .0% 161 100.0%
Investment in Shares
annual income *
Investment in Mutual 161 100.0% 0 .0% 161 100.0%
Funds
annual income *
161 100.0% 0 .0% 161 100.0%
Investment in FDs/Bonds
annual income *
161 100.0% 0 .0% 161 100.0%
Investment in Real Estate
annual income *
161 100.0% 0 .0% 161 100.0%
Investment in Insurance
Count
Time horizon of investment
< 3 years 3-5 years 6-9 years > 10 years Total
annual < 2,50,000 1 5 2 3 11
income 2,50,000-5,00,000 30 32 8 11 81
5,00,000-7,50,000 2 12 3 2 19
7,50,000-10,00,000 4 11 12 10 37
>10,00,000 0 8 3 2 13
Total 37 68 28 28 161
ICFAI-Gurgaon 73
Study of different investment strategies and portfolio management
Chi-Square Tests
Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 30.729 a 12 .002
Likelihood Ratio 32.810 12 .001
Linear-by-Linear
7.560 1 .006
Association
N of Valid Cases 161
a. 10 cells (50.0%) have expected count less than 5. The
minimum expected count is 1.91.
Directional Measures
Asymp.
a b
Value Std. Error Approx. T Approx. Sig.
Nominal by Lambda Symmetric .029 .047 .612 .541
Nominal annual income
.050 .054 .897 .370
Dependent
Withdraw money from
.011 .051 .209 .835
investment Dependent
Goodman and annual income c
.080 .027 .000
Kruskal tau Dependent
Withdraw money from c
.064 .022 .002
investment Dependent
Uncertainty Coefficient Symmetric .077 .024 3.257 .001 d
annual income d
.077 .024 3.257 .001
Dependent
Withdraw money from d
.078 .024 3.257 .001
investment Dependent
a. Not assuming the null hypothesis.
b. Using the asymptotic standard error assuming the null hypothesis.
c. Based on chi-square approximation
d. Likelihood ratio chi-square probability.
Symmetric Measures
Explanation:
In the above chi-square test the asymmetric significance is 0.002, which is
lower than the table value. Then null hypothesis is rejected & alternative
hypothesis is accepted. The Uncertainty coefficient value 0.077 and the
approx significance are 0.001, which shows there is fair strong
relationship between time horizon & Annual income. The symmetric
Lambda shows that there is 2.9% possibility of improvement in that
relationship. The contingency coefficient shows that there is 40%
association in this relationship.
ICFAI-Gurgaon 74
Study of different investment strategies and portfolio management
Hypothesis:
Null hypothesis: There is no relationship between investor’s annual income and
Investment in Share.
Alternative hypothesis: Relationship present between annual income and
investment in shares.
Count
Investment in Shares
No Yes Total
annual < 2,50,000 8 3 11
income 2,50,000-5,00,000 47 34 81
5,00,000-7,50,000 14 5 19
7,50,000-10,00,000 16 21 37
>10,00,000 4 9 13
Total 89 72 161
Chi-Square Tests
Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 9.532a 4 .049
Likelihood Ratio 9.746 4 .045
Linear-by-Linear
5.619 1 .018
Association
N of Valid Cases 161
a. 1 cells (10.0%) have expected count less than 5. The
minimum expected count is 4.92.
ICFAI-Gurgaon 75
Study of different investment strategies and portfolio management
Directional Measures
Asymp.
a b
Value Std. Error Approx. T Approx. Sig.
Nominal by Lambda Symmetric .066 .044 1.423 .155
Nominal annual income c c
.000 .000 . .
Dependent
Investment in
.139 .091 1.423 .155
Shares Dependent
Goodman and annual income d
.012 .009 .108
Kruskal tau Dependent
Investment in d
.059 .036 .050
Shares Dependent
Uncertainty Coefficient Symmetric .030 .019 1.602 .045 e
annual income e
.023 .014 1.602 .045
Dependent
Investment in e
.044 .027 1.602 .045
Shares Dependent
a. Not assuming the null hypothesis.
b. Using the asymptotic standard error assuming the null hypothesis.
c. Cannot be computed because the asymptotic standard error equals zero.
d. Based on chi-square approximation
e. Likelihood ratio chi-square probability.
Symmetric Measures
Explanation:
In the above chi-square the asymmetric significance or the p-value is 0.049, which
is less than 0.05, so the null hypothesis is rejected & the alternative
hypothesis is accepted.
The uncertainty coefficient is 0.03 & the approx significance 0.045shows that there
is fairly week relationship between the variables.
The symmetric Lambda value is 0.066, which means there is 6.6% of possibility
of improvement.
The contingency coefficient shows there is 23.6% relationship present between
the variables.
ICFAI-Gurgaon 76
Study of different investment strategies and portfolio management
Hypothesis:
Null hypothesis: There is no relationship between investor’s annual income and
Investment in Mutual Funds.
Alternative hypothesis: Relationship present between annual income and
investment in Mutual Funds.
Count
Investment in Mutual
Funds
No Yes Total
annual income < 2,50,000 10 1 11
2,50,000-
31 50 81
5,00,000
5,00,000-
8 11 19
7,50,000
7,50,000-
8 29 37
10,00,000
>10,00,000 4 9 13
Total 61 100 161
Chi-Square Tests
Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 17.729 a 4 .001
Likelihood Ratio 18.612 4 .001
Linear-by-Linear
8.150 1 .004
Association
N of Valid Cases 161
a. 2 cells (20.0%) have expected count less than 5. The
minimum expected count is 4.17.
ICFAI-Gurgaon 77
Study of different investment strategies and portfolio management
Directional Measures
Asymp.
a b
Value Std. Error Approx. T Approx. Sig.
Nominal by Lambda Symmetric .064 .022 2.778 .005
Nominal annual income c c
.000 .000 . .
Dependent
Investment in Mutual
.148 .050 2.778 .005
Funds Dependent
Goodman and annual income d
.018 .009 .024
Kruskal tau Dependent
Investment in Mutual d
.110 .036 .001
Funds Dependent
Uncertainty Coefficient Symmetric .058 .024 2.377 .001e
annual income e
.044 .018 2.377 .001
Dependent
Investment in Mutual e
.087 .037 2.377 .001
Funds Dependent
a. Not assuming the null hypothesis.
b. Using the asymptotic standard error assum ing the null hypothesis.
c. Cannot be computed because the asymptotic standard error equals zero.
d. Based on chi-square approximation
e. Likelihood ratio chi-square probability.
Symmetric Measures
Explanation:
In the above chi-square the asymmetric significance or the p-value is 0.001, which
is less than 0.05, so the null hypothesis is rejected & the alternative
hypothesis is accepted.
The uncertainty coefficient is 0.058 & the approx significance 0.001shows that
there is fairly strong relationship between the variables.
The symmetric Lambda value is 0.066, which means there is 6.4% of possibility
of improvement.
The contingency coefficient shows there is 31.5% relationship present between
the variables.
ICFAI-Gurgaon 78
Study of different investment strategies and portfolio management
Hypothesis:
Null hypothesis: There is no relationship between investor’s annual income and
Investment in Fixed Deposits & bonds.
Alternative hypothesis: Relationship present between annual income and
investment in Fixed Deposits & bonds.
Crosstab
Count
Investment in
FDs/Bonds
No Yes Total
annual < 2,50,000 0 11 11
income 2,50,000-5,00,000 28 53 81
5,00,000-7,50,000 4 15 19
7,50,000-10,00,000 19 18 37
>10,00,000 9 4 13
Total 60 101 161
Chi-Square Tests
Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 17.744a 4 .001
Likelihood Ratio 21.319 4 .000
Linear-by-Linear
11.906 1 .001
Association
N of Valid Cases 161
a. 2 cells (20.0%) have expected count less than 5. The
minimum expected count is 4.10.
ICFAI-Gurgaon 79
Study of different investment strategies and portfolio management
Directional Measures
Asymp.
a b
Value Std. Error Approx. T Approx. Sig.
Nominal by Lambda Symmetric .043 .049 .850 .395
Nominal annual income c c
.000 .000 . .
Dependent
Investment in
.100 .112 .850 .395
FDs/Bonds Dependent
Goodman and annual income d
.019 .010 .018
Kruskal tau Dependent
Investment in d
.110 .039 .001
FDs/Bonds Dependent
Uncertainty Coefficient Symmetric .067 .022 2.999 .000 e
annual income e
.050 .016 2.999 .000
Dependent
Investment in e
.100 .033 2.999 .000
FDs/Bonds Dependent
a. Not assuming the null hypothesis.
b. Using the asymptotic standard error assuming the null hypothesis.
c. Cannot be computed because the asymptotic standard error equals zero.
d. Based on chi-square approximation
e. Likelihood ratio chi-square probability.
Symmetric Measures
Explanation:
In the above chi-square the asymmetric significance or the p-value is 0.001, which
is less than 0.05, so the null hypothesis is rejected & the alternative
hypothesis is accepted.
The uncertainty coefficient is 0.067 & the approx significance 0.000shows that
there is very strong relationship between the annual income & Investment in
FDs/Bonds.
The symmetric Lambda value is 0.043, which means there is 4.3% of possibility
of improvement.
The contingency coefficient shows there is 31.5% relationship present between
the variables.
ICFAI-Gurgaon 80
Study of different investment strategies and portfolio management
Hypothesis:
Null hypothesis: There is no relationship between investor’s annual income and
Investment in Real estate.
Alternative hypothesis: Relationship present between annual income and
investment in Real estate.
Count
Investment in Real
Estate
No Yes Total
annual < 2,50,000 10 1 11
income 2,50,000-5,00,000 54 27 81
5,00,000-7,50,000 11 8 19
7,50,000-10,00,000 18 19 37
>10,00,000 5 8 13
Total 98 63 161
Chi-Square Tests
Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 10.441 a 4 .034
Likelihood Ratio 11.253 4 .024
Linear-by-Linear
9.586 1 .002
Association
N of Valid Cases 161
a. 1 cells (10.0%) have expected count less than 5. The
minimum expected count is 4.30.
ICFAI-Gurgaon 81
Study of different investment strategies and portfolio management
Directional Measures
Asymp.
a b
Value Std. Error Approx. T Approx. Sig.
Nominal by Lambda Symmetric .028 .049 .566 .571
Nominal annual income c c
.000 .000 . .
Dependent
Investment in Real
.063 .109 .566 .571
Estate Dependent
Goodman and annual income d
.015 .012 .047
Kruskal tau Dependent
Investment in Real d
.065 .034 .035
Estate Dependent
Uncertainty Coefficient Symmetric .035 .019 1.801 .024e
annual income e
.026 .015 1.801 .024
Dependent
Investment in Real e
.052 .029 1.801 .024
Estate Dependent
a. Not assuming the null hypothesis.
b. Using the asymptotic standard error assuming the null hypothesis.
c. Cannot be computed because the asymptotic standard error equals zero.
d. Based on chi-square approximation
e. Likelihood ratio chi-square probability.
Symmetric Measures
Explanation:
In the above chi-square the asymmetric significance or the p-value is 0.034, which
is less than 0.05, so the null hypothesis is rejected & the alternative
hypothesis is accepted.
The uncertainty coefficient is 0.035 & the approx significance 0.024shows that
there is week relationship between the annual income & Investment in Real estate.
The symmetric Lambda value is 0.028, which means there is 2.8% of possibility
of improvement.
The contingency coefficient shows there is 24.7% relationship present between
annual income and investment in Real estate.
ICFAI-Gurgaon 82
Study of different investment strategies and portfolio management
Hypothesis:
Null hypothesis: There is no relationship between investor’s annual income and
Investment in Insurance.
Alternative hypothesis: Relationship present between annual income and
investment in Insurance.
Crosstab
Count
Investment in
Insurance
No Yes Total
annual < 2,50,000 4 7 11
income 2,50,000-5,00,000 22 59 81
5,00,000-7,50,000 3 16 19
7,50,000-10,00,000 3 34 37
>10,00,000 2 11 13
Total 34 127 161
Chi-Square Tests
Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 7.650 a 4 .105
Likelihood Ratio 8.270 4 .082
Linear-by-Linear
6.191 1 .013
Association
N of Valid Cases 161
a. 3 cells (30.0%) have expected count less than 5. The
minimum expected count is 2.32.
ICFAI-Gurgaon 83
Study of different investment strategies and portfolio management
Directional Measures
Asymp.
a b
Value Std. Error Approx. T Approx. Sig.
Nominal by Lambda Symmetric .000 .000 .c .c
Nominal annual income c c
.000 .000 . .
Dependent
Investment in c c
.000 .000 . .
Insurance Dependent
Goodman and annual income d
.018 .012 .022
Kruskal tau Dependent
Investment in d
.048 .030 .107
Insurance Dependent
Uncertainty Coefficient Symmetric .028 .018 1.532 .082 e
annual income e
.019 .013 1.532 .082
Dependent
Investment in e
.050 .032 1.532 .082
Insurance Dependent
a. Not assuming the null hypothesis.
b. Using the asymptotic standard error assuming the null hypothesis.
c. Cannot be computed because the asymptotic standard error equals zero.
d. Based on chi-square approximation
e. Likelihood ratio chi-square probability.
Symmetric Measures
Explanation:
In the above chi-square the asymmetric significance or the p-value is 0.104, which
is less than 0.05, so the null hypothesis is accepted. There is no relation
between annual income and investment in insurance.
ICFAI-Gurgaon 84
Study of different investment strategies and portfolio management
Cases
Valid Missing Total
N Percent N Percent N Percent
First Priority of
161 100.0% 0 .0% 161 100.0%
investmnet * Age groups
Count
Age groups
18-30 years 31-40 years 41-50 years >50 years Total
First Priority tax savings 26 21 12 7 66
of investmnet Future Uncertainty 27 17 0 2 46
Income 5 8 8 2 23
Retirement 7 4 5 2 18
Capital Preservation 0 2 3 3 8
Total 65 52 28 16 161
Asym p. Sig.
Value df (2-sided)
Pearson Chi-Square 32.766a 12 .001
Likelihood Ratio 40.273 12 .000
Linear-by-Linear
6.549 1 .010
Association
N of Valid Cases 161
a. 9 cells (45.0%) have expected count less than 5. T he
m inim um expected count is .80.
ICFAI-Gurgaon 85
Study of different investment strategies and portfolio management
Directional Measures
Asymp.
a b
Value Std. Error Approx. T Approx. Sig.
Nominal by Lambda Symmetric .037 .043 .845 .398
Nominal First Priority of
.011 .076 .137 .891
investmnet Dependent
Age groups Dependent .063 .040 1.511 .131
Goodman and First Priority of c
.048 .013 .002
Kruskal tau investmnet Dependent
Age groups Dependent .066 .017 .002 c
Uncertainty Coefficient Symmetric .094 .019 4.782 .000 d
First Priority of d
.090 .018 4.782 .000
investmnet Dependent
Age groups Dependent .099 .020 4.782 .000 d
a. Not assuming the null hypothesis.
b. Using the asymptotic standard error assuming the null hypothesis.
c. Based on chi-square approximation
d. Likelihood ratio chi-square probability.
Symmetric Measures
Explanation:
In the above chi-square the asymmetric significance or the p-value is 0.001, which
is less than 0.05, so the null hypothesis is rejected & the alternative
hypothesis is accepted.
The uncertainty coefficient is 0.000 & the approx significance 0.094shows that
there is very strong relationship between the age group and first priority of
investment.
The symmetric Lambda value is 0.037, which means there is 3.7% of possibility
of improvement.
The contingency coefficient shows there is 41.1% relationship present between
age group and first priority of investment.
ICFAI-Gurgaon 86
Study of different investment strategies and portfolio management
Cases
Valid Missing Total
N Percent N Percent N Percent
First Priority of investmnet
161 100.0% 0 .0% 161 100.0%
* Risk appetite
Count
Risk appetite
Low Moderate High Very high Total
First Priority tax savings 24 25 12 5 66
of investmnet Future Uncertainty 6 19 17 4 46
Income 3 7 12 1 23
Retirement 6 8 4 0 18
Capital Preservation 3 1 2 2 8
Total 42 60 47 12 161
Chi-Square Tests
Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 23.235 a 12 .026
Likelihood Ratio 24.052 12 .020
Linear-by-Linear
1.172 1 .279
Association
N of Valid Cases 161
a. 9 cells (45.0%) have expected count less than 5. The
minimum expected count is .60.
ICFAI-Gurgaon 87
Study of different investment strategies and portfolio management
Directional Measures
Asymp.
a b
Value Std. Error Approx. T Approx. Sig.
Nominal by Lambda Symmetric .061 .035 1.679 .093
Nominal First Priority of
.053 .055 .931 .352
investmnet Dependent
Risk appetite Dependent .069 .046 1.469 .142
Goodman and First Priority of c
.042 .018 .008
Kruskal tau investmnet Dependent
Risk appetite Dependent .050 .020 .022c
Uncertainty Coefficient Symmetric .056 .021 2.682 .020d
First Priority of d
.054 .020 2.682 .020
investmnet Dependent
Risk appetite Dependent .059 .022 2.682 .020d
a. Not assuming the null hypothesis.
b. Using the asymptotic standard error assuming the null hypothesis.
c. Based on chi-square approximation
d. Likelihood ratio chi-square probability.
Symmetric Measures
Explanation:
In the above chi-square the asymmetric significance or the p-value is 0.026, which
is less than 0.05, so the null hypothesis is rejected & the alternative
hypothesis is accepted.
The uncertainty coefficient is 0.056 & the approx significance 0.02 shows that there
is fairly strong relationship between the risk appetite and first priority of
investment.
The symmetric Lambda value is 0.061, which means there is 6.1% of possibility
of improvement.
The contingency coefficient shows there is 35.5% relationship present between
risk appetite and first priority of investment.
ICFAI-Gurgaon 88
Study of different investment strategies and portfolio management
The over all project is depending up on the findings that has been explained
previously. All my survey findings are corelated and being explain in the
above graphs.
After completing the survey and watching the analysis I come to this
conclusiion that the before investment investors do have focus on Tax
savings, Income, Capiatal preservation etc. They also have a
predetermination of the time period of investment.
Mutual Funds can also be offered as they have high risk profile.
Company should take initiative to get demat account of these
customers.
The age group of 31-40 years, investors are with ‘Moderate’ risk
profile, most of the investors are from the 10,000-15,000 Rs per
month disposible income. Company will get a good investor with
diluted risk profile. Company can offer them ULIPs,and Fixed Deposits
as investment instrument. Mutual funds can be an option but that
must be a debt fund to invest.
The age group of 41-50 years, investors are from the 15,000-
20,000 Rs disposible income group. Investor in this group are
invested in Insurance sector, the primary focus of these investors
are retirement and time horizon is likely to be 6-9 years. This is also
ICFAI-Gurgaon 89
Study of different investment strategies and portfolio management
good potential group for the retirement plan in ULIPs. Mutual funds
can be a good option for them.
For the age group of above 50 years, the rish profile would be low
moderate,as the term is not more than 3 years. Investors have
invested in insurance sector but in this age insurance would not be a
good option for investor. Company should try to minimise the risk
tolerence by offering Fixed deposits.
OCCUPATION
If we see the survey data it will seen that respondents are majorly Service
peopole and Business Class. Depending upon the data I conclude that the
srevice class has a time horizon of 3-5 years and risk tolerence ‘Low-
Moderate’. They invested in FDs, Mutual Fund and ULIPs.
For the business class, the risk profile is high-very high. Most investor
are with negative return acceptability and time horizon is < 3 years.
Company should offer Mutual funds with risk profile High to very
high thus investor can get a high return. Apart from this company
should offer to open demat account with them.
Disposible Income
The disposible income bracket less than Rs.5000 per month are
basically safe investors and have not and do not prefer investing in
mutual funds and ULIP. Thus positioning of these products should
be such that people are attracted towards this scheme. Emphasis
on marketing of the products should be given.
ICFAI-Gurgaon 90
Study of different investment strategies and portfolio management
ICFAI-Gurgaon 91
Study of different investment strategies and portfolio management
TAX CALCULATION
In the port folio management I have learned how to calculate the Income
tax of service person and businessmen. According to the indian Income tax
acts Income tax is defined as below:
Various income tax systems exist, with varying degrees of tax incidence.
Income taxation can be progressive, proportional, or regressive.
Individual income taxes often tax the total income of the individual (with
some deductions permitted).
All income received as a salary is taxed under this head. Employers must
withhold tax compulsorily, if income exceeds minimum exemption limit, as
Tax Deducted at Source (TDS), and provide their employees with a Form 16
which shows the tax deductions and net paid income. In addition, the Form
16 will contain any other deductions provided from salary such as:
2. Conveyance allowance: Up to Rs. 800 per month (Rs. 9,600 per year) is
tax free if provided as conveyance allowance. No bills are required for this
amount.
ICFAI-Gurgaon 92
Study of different investment strategies and portfolio management
Section 80C of the Income Tax Act [1] allows certain investments and
expenditure to be tax-exempt. The total limit under this section is Rs.
150,000 (Rupees One lakh fifty thousand) which can be any combination of
the below:
ICFAI-Gurgaon 93
Study of different investment strategies and portfolio management
Tax calculation:-
For Men
Illustration: let a person with yearly income of 6,00,000 Rs. The tax he will
paid will be as given below.
ICFAI-Gurgaon 94
Study of different investment strategies and portfolio management
Safety of investment
Liquidity
Tax planning
Diversification
Symbolically:
ICFAI-Gurgaon 95
Study of different investment strategies and portfolio management
Portfolio Risk
Symbolically:
Where,
Return is not fixed for any investment instrument it depends upon the
market liquidity, interest rate, and some other economic situation of that
country. For the calculation of the risk & return I have chosen the historic
data.
I have also showed the risk profile which have been ranging from Low to
very high.
ICFAI-Gurgaon 96
Study of different investment strategies and portfolio management
PPF 8% Low
Note: higher returns for lower risk (because of Govt. guarantees there) that
PPF and similar A/c appear to have, is misleading. These do not have much
liquidity, and since that is an important measure of risk.
CREATING PORTFOLIO
For the portfolio managers calculating the risk and return is the main area
where they focused. As an investors before investing alwways watch for the
risk and return for his/her investment. So before creating the portfolio, risk
and return calculation is manditory.
ICFAI-Gurgaon 97
Study of different investment strategies and portfolio management
METHODOLOGY USED
However, though they make money from the fund, a detailed examination of
the fund's performance in relation to other risk-free investment avenues and
the Benchmark index gives telling insights into the fund's performance. A
comparison with risk-free investments like government securities, treasury
bills, and also the Benchmark index would determine how safer and more
profitable your fund is.
Here is an analysis of the ratios that can help investors gauge the
performance of your fund as regards investing in less riskier investment
avenues.
Standard Deviation
Standard deviation throws light on a fund's volatility in terms of rise and fall
in its returns. Maximum volatility in a security is the riskiest, considering the
unevenness it brings about in its performance. Standard deviation of a fund
measures this risk by measuring the degree to which the fund fluctuates in
relation to its mean return. That is the average return of a fund over a
period of time.
A fund that has a consistent four-year return of 3%, for example, would
have a mean or average of 3%. The standard deviation for this fund would
ICFAI-Gurgaon 98
Study of different investment strategies and portfolio management
then be zero because the fund's return in any given year does not differ
from its four-year mean of 3%. On the other hand, a fund that in each of
the last four years returned -5%, 17%, 2% and 30% will have a mean
return of 11%. The fund will also exhibit a high standard deviation because
each year the return of the fund differs from the mean return. This fund is
therefore riskier because it fluctuates widely between negative and positive
returns within a short period.
To determine how well a fund is maximising its returns received for its
volatility, a comparison can be done for similar investment and similar risky
mutual funds. The fund with the lower standard deviation would be more
optimal because it is maximising the return received for the amount of risk
acquired.
Sharpe ratio
This ratio describes how much return you are receiving for the extra
volatility that you endure for holding a riskier asset. Remember, you always
need to be properly compensated for the additional risk you take for not
holding a risk-free asset.
ICFAI-Gurgaon 99
Study of different investment strategies and portfolio management
the 15% return, took much larger risks than manager B, it may actually be
the case that manager B has a better risk-adjusted return.
Say that the risk free-rate is 5%, and manager A's portfolio has a standard
deviation of 8% (considering high risk/return), while manager B's portfolio
has a standard deviation of 5%.
The Sharpe ratio for manager A would be 1.25 while manager B's ratio
would be 1.4, which is better than manager A. Based on these calculations,
manager B was able to generate a higher return on a risk-adjusted basis. A
ratio of more than or equal to 1 is good, more than or equal 2 is very good,
and more than or equal 3 is excellent.
Sharpe ratio is broken down into three components: asset return, risk-free
return, and standard deviation of return. After calculating the excess return,
it's divided by the standard deviation of the risky asset to get its Sharpe
ratio. The idea of the ratio is to see how much additional return you are
receiving for the additional volatility of holding the risky asset over a risk-
free asset - the higher the better.
Beta
If, for example, a fund has a beta of 1.05 in relation to the Sensex, the fund
has been moving 5% more than the index. Therefore, if the Sensex has
increased 15%, the fund would be expected to increase 15.75%.
On the other hand, a fund with a beta of 2.4 would be expected to move 2.4
times more than its corresponding index. So if the Sensex moved 10%, the
fund would be expected to rise 24%, and, if the Sensex declined 10%, the
fund would be expected to lose 24%.
ICFAI-Gurgaon 100
Study of different investment strategies and portfolio management
Investors can choose funds exhibiting high betas, which increase chances of
beating the market. Also if the market is bearish the funds that have betas
less than 1 are a good choice because they would be expected to decline
less in value than the index. For example, if a fund had a beta of 0.5 and the
Sensex declined 6%, the fund would be expected to decline only 3%.
However, you must note that beta by itself is limited and there may be
factors other than the market risk affecting your fund's volatility.
FUNDS SELECTION
I have selected minimun five funds from different Funds from different types
of funds. Here is the list of the mutual funds I have selected.
ICFAI-Gurgaon 101
Study of different investment strategies and portfolio management
Balanced Funds
HDFC Prudence
Principal Child
Benefit
Magnum
Balanced
ICFAI-Gurgaon 102
Study of different investment strategies and portfolio management
These 33 funds are the top funds in respective fund sector, the 1st
year return and 3 years are calculated.
Then with 60% weightage given to 3 years return and 40% weightage
given to 1st year return. Thus I have got the total average return score
of the respective funds.
Beta & Sharpe ratio being calculated. Then I calculate adjusted risk by
dividing Sharpe ratio by beta.
Then adjusted risk is multiplied by the total return score of individual
funds. Then I got the adjusted risk & return.
The highest scorer is the best fund to invest respect to the fund type.
So I have ranked the funds in the respective category.
These funds are recommended to the investors depending the risk
tolerence.
Portfolio of Investor
Aggressive investment
NFO= 50,000
ICFAI-Gurgaon 103
Study of different investment strategies and portfolio management
Explanation :
ELSS is a type of mutual funds where investor can get the Tax shield
of 80(C), which means upto investment of Rs 100,000 is tax free.
There is no need invest in ULIPs or any endowment insurance,
because ELSS gives on an average return of 25%-30%7. For the
secure life investor must do an insurance that will give only insurance
plan. This will be a expence of the investor but in the long run ELSS
will give more return than a ULIP plan.
NFO is the emerging mutual funds that is going to flurish in the future.
It is difficult to predict which NFO will be good, because it is time
constrain. But investor must evaluate the background of the NFO and
the fund manager.
Aggressive mutual funds, are the most volatily mutual funds respect to
the market. I have recommended top five mutual funds each with
amount 40,000 Rs. The funds are:
Defensive investment
Fixed deposits=50,000
Explanation:
ICFAI-Gurgaon 104
Study of different investment strategies and portfolio management
Fixed deposits are for 1 years, Kotak Mahindra offers 9.25% for 1 years
fixed deposits.
Portfolio of Investor
Aggressive investment
NFO= 50,000
ICFAI-Gurgaon 105
Study of different investment strategies and portfolio management
Explanation:
Defensive investment
Fixed deposits=50,000
Explanation:
In the defensive invetment part investor must try to gain more interest rate
as the return is secure and liquidity is low.
ICFAI-Gurgaon 106
Study of different investment strategies and portfolio management
ANNEXURE
ICFAI-Gurgaon 107
Study of different investment strategies and portfolio management
Average
Balance 10000 10000 5000 5000** 10000
Non
maintenance
of AQB or AB
750/quarter 750/quarte
<5000 1500 500/month * r 750
>=5000 to <
7500 1250 400/month
>=7500 to
10000 750 300/month
* Rs. 250/quarter for sr. citizens & young star customers (minors)
Debit card
fees
Free for
normal debit 1st year
200/yr 180/yr 99/yr 100/yr Rs.100 for
card
subsequen
t years
smart fill card 399/yr NA 99/yr* NA NA
gold card 799/yr 400/yr NA 500/yr na
Additional
cards
supplementar
y cards NA 180/yr NA NA 100/card
add on cards NA 180/yr** NA 500/yr*** 250/card
replacement
card fee 200/card 200/card 100/card 100/card
damaged card
fee 200/card 200/card free free
woman’s card NA NA NA 150/card NA
* smart fill card is HPCL DEBIT CARD in ICICI
** minimum limit for add on card in ABN AMRO is RS.15000 & service charge will
be as
ICFAI-Gurgaon 108
Study of different investment strategies and portfolio management
<7500 500/month
>=7500 to
<10000 400/month
>=10000 to
< 15000 300/month
***for easy shop woman’s card fee will be RS 150/yr in HDFC
cash with
drawl (from
Rs 25 from
partners Rs Others( Vis
any other
Charged 20 & from a domestic
UTI ATMS bank
non ATMs
and ABN except SBI
partners Rs
AMRO
60)
ATM’S
*subsequent to the month where transaction criteria not fulfilled & bal<10,000
** only in gold card , 2 transactions per month
*** only if AQB is not maintained otherwise free
**** free 1st cheque book of 25 leaves
***** 50/Cheque for local cheque deposited by customer
ICFAI-Gurgaon 109
Study of different investment strategies and portfolio management
Statements
monthly
statement 200/yr 200/yr free* free
Ad-hoc
statement 50/yr NA 100/stat 100/yr
Facilities
D-mat a/c NA free
D-mat
maintain
charges NA 360 per yr
Internet
Banking Free free free free free
Phone
Banking Free free free free free
DD/POS
DD
COMMISON
2/1000(min shown
On same bank 50 50) below 2.5/1000*
4/1000 (100
on other bank 2.5/1000** min)
* min 50 max 5000
** min 50 max 8000
on branch
location
Up to 10000 50,40*
10000-50000 75,60*
50000-
100000 2.5/1000**
above 100000 2/1000***
* for sr. citizens /rural areas
ICFAI-Gurgaon 110
Study of different investment strategies and portfolio management
** min 150/-
***min 250/- & max 5000
On non branches location-----Rs 50/- plus charges as below
Rs 500 10
Rs500 to
1000 15
Rs1000 to
5000 25
Rs 5000 to
10000 30
Rs10000 to
100000 3/1000
>Rs 100000 6/1000*
* max Rs 5000
PO
commission DD DD
schedule 50 1/1000* charges charges
* 75 for PO Up to 50000 max 5000
Account 500 less within 12 250 within < 14 & >6 Rs.600 if
closing than 6 months 1 yr, nil months no closed
charge months 500/- after 1 yr charge, within 6
15 days to months.
6 months Else no
100/- charges
courier Rs.
Door step
25 & DD Rs.
banking
50 par Rs. 10 par
transaction transaction NA
ICFAI-Gurgaon 111
Study of different investment strategies and portfolio management
Policy Bajaj ICICI- Life AVIVA- Life HDFC- Unit Birla Sun Life –
name Allianz- Time Gold Bond Linked Dream Plan
New Endowment
Secure
First
Age
Premium
amount
(min.)
ICFAI-Gurgaon 112
Study of different investment strategies and portfolio management
Age
Y
0-35
40
36-40
30
41-55
20
55-60
10
61-65
5
Regular
premium
allocation
1st >2nd 1st 2nd >3r 1st yr >2nd 1st & >3rd yr NIL
d
yr yr yr yr 85% yr 2nd yr 99%
30% 94% 96% 70%
80 92. Yr
% 5%
96
ICFAI-Gurgaon 113
Study of different investment strategies and portfolio management
1st >2ndy 1st 2nd >3r 1st yr >2nd 1st & >3rd yr NIL
yr yr d
yr yr Yr yr 2nd yr
82 92. 85% 99%
95% %
96 80%
50% 5% % 97%
1st 2nd yr 1st 2nd >3r 1st yr >2nd 1st & >3rd yr NIL
d
yr yr yr 85% yr 2nd yr 99%
97% 98% 85%
76% 15 7.5 Yr
% % 4%
>50,00,000 >20,00,000
Benefits
offered
ICFAI-Gurgaon 114
Study of different investment strategies and portfolio management
Tax benefit
ICFAI-Gurgaon 115
Study of different investment strategies and portfolio management
80D Save up to
10,000
Other
charges
Fund
manageme
nt charge
ICFAI-Gurgaon 116
Study of different investment strategies and portfolio management
Miscellaneo 100 per 100 per trans. 250 per trans. 100 per trans.
us charges trans.
20 20 20 30
1.57/1000 1.33/1000 1.54/1000 1.69/1000
30 30 30 40
1.74/1000 1.46/1000 1.93/1000 2.94/1000
40 40 40 50
2.82/1000 2.46/1000 4.42/1000 6.95/1000
50 50 50 60
6.53/1000 5.91/1000 12.17/1000 16.76/1000
Switch 3 free(if > 4 free (if >4, 4 free(if >4, 24 switch free, 2 free(>2 ,per
option 3, 5% of 100 per 5% of switch >24 per switch switch 100)
switch amt switch, min amt or Rs.500 100
or Rs.100 switch 2000) whichever is
whichever lower
is lower)
ICFAI-Gurgaon 117
Study of different investment strategies and portfolio management
Additional
riders benefit
4yrs-1% 2-3yr-10%
Contact no.
Q 3. What is your primary investment focus (please give ranking 1-5, where
1- best)
ICFAI-Gurgaon 118
Study of different investment strategies and portfolio management
Q 5. Where you have invested from the followings?(you can tick more than
one)
Sites
www.google.com
www.investopedia.com
www.standardchartered.in
www.iciciprulife.com
www.nseindia.com
www.ampi.com
www.finance.indiamart.com
www.business.india.com
www.valueresearch.com
www.myiris.com
Books
ICFAI-Gurgaon 119