PORTFOLIO MANAGEMENT AND MUTUAL FUNDS PROJECT

Aggressive Growth Balanced 80 50 40 70 30 60 20 10 Secure Income Conservative

THE PERFECT INVESTMENT

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THE PERFECT INVESTMENT (AMC)

INVESTOR DETAILS
NAME: Shobhit Sharma DATE OF BIRTH: 22 April, 1983 AGE: 28 years OCCUPATION: Software Developer

DETAILS OF FAMILY MEMBERS AND DEPENDENTS

FATHER: Retired Government Service Officer MOTHER: Housewife ELDER BROTHER: Doctor YOUNGER BROTHER: Private employee in HUL DEPENDENTS: Parents

INCOME CASH FLOW STATEMENT

INCOME CASH FLOW STATEMENT PARTICULARS CURRENT (Rs.) PROJECTED (Rs.) INCOME Salary TOTAL INCOME EXPENSES Living Premiums Sri Ram Life Insurance LIC Birla Sunlife Others- EMI TOTAL EXPENSES INCOME - EXPENSES SAVINGS PF SURPLUS

A B

8,60,000 8,60,000

9,75,000 9,75,000

C D

1,80,000 55,000 20,000 15,000 20,000 2,90,000 5,70,000 60,000 6,30,000

2,00,000 55,000 20,000 15,000 20,000 3,10,000 6,65,000 68,000 7,33,000

E F G H I

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NET WORTH
NET WORTH ASSETS PARTICULARS AMOUNT (Rs.) A B Liquid Assets Financial Assets Life insurance FDs Commodity Tangible Assets Real Estate, Art Retirement Assets PF TOTAL 5,00,000 90,000 55,000 2,00,000 25,00,000 60,000 34,05,000 TOTAL 22,00,000 LIABILITIES PARTICULARS AMOUNT (Rs.) Home Loan Vehicle Loan 18,00,000 4,00,000

C D

FINANCIAL GOALS
RECURRING GOALS
A recurring donation is a preset donation that gets debited from a supporters account each month. Here are some of the benefits of focusing on recurring donations. Increase your overall donation receipts. A steady stream of monthly donations means more stable revenue. Create more points of contact with donors to stay relevant and build stronger relationships.

The recurring goal of our investor is child education My investor will invest Rs 150,000 on child education. So we find the actual amount which he will spend after 5 years through inflation rate. We take the 1% inflation rate annually.

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The future value of $150,000 over time with 1% annual inflation Year 0 1 2 3 4 5 Value 150,000 151500 153015 154545 156090 157650

We calculate it for 5 years the amount will be = Rs 1,57,650 After 5 year, when his child education will actually start then we will consider that he will invest till 12 years on childs higher education. Then again we will calculate actual amount through inflation rate.
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Actual amount will be after 18 years on 1% inflation rate = Rs 1,77,637.2

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NON RECURRING GOALS

Do have any plans for higher studies? Yes The amount that will be needed for that? 8 lakhs When you are going to marry? 2012 Will you yourself pay the marriage expenses or will ask from parents also?

Both
How much do you think you will need? 6(4+2) 4 lakh by himself and 2 lakhs

by parents
Do have any plans of buying your home? Already have booked Where and what is the estimates of buying price? 25 lakh

Thus, goals are higher studies and marriage. Investor wants to fulfil his non-recurring goals in coming year, so the amount will remain almost same after inflation.

Expenses
Goals Amount (Rs.) Higher Education 8,00,000 Marriage 4,00,000 Total 12,00,000

Income
Disposable salary excluding all expenses i.e. Rs. 7,33,000

RETIREMENT GOALS
Age at which you want to retire (either completely or partially) 60 The kind of lifestyle youd like to live while retired Same Where youd like to live during retirement Noida Whom you will live with Family Estimated expenses during retirement Rs. 25,000 Large expenditures that you plan to make, such as travel Singapore, 5-6

lakhs
Whether youll work during retirement Yes How much money do think you will earn at that time- 20,00,000 How long you think youll live 70-75 How quickly you think inflation will grow - 1% annually [7]

 Your estimates for what return you will get on your investments 10-12 lakh+

actual investment
How much of a financial cushion you want to leave yourself in case of

unforeseen problems/calamities 5-6 lakh

If you will own your home- yes How much money youd like to leave behind after death- 20-25 lakhs Medical expenses- 50,000

According to the questionnaire filled by investor, his retirement goals are:1. Saving for children, what he wants to leave behind 2. Starting a business 3. Want to travel to Singapore 4. Want to save for emergency

The value of $100,000 over time with 1% annual inflation Year 0 5 10 15 20 25 30 35 40 45 Value 100,000 95,000 90,000 85,000 80,000 75,000 70,000 65000 60000 55000

Assuming he want to fulfil his goals at the age of 60.

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Expenditure
Goals By Investor(Rs.) After 30 Years For children 20,00,000 28,00,000 Investment in Business 20,00,000 28,00,000 Travel 5,00,000 7,00,000 Emergency 5,00,000 7,00,000 Total 50,00,000 70,00,000

Income
From investment return Principal amount 10,00,000 1,35,00,000 + 2,00,000 14,00,000

There will also be inheritance amount of 2-3 lakhs from his father.

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RISK TOLERANCE QUESTIONNAIRE

Name Shobhit Sharma Address H No. 99, Saraswati Vihar,3rd floor, Gurgaon Date 22 Dec, 2012
1. When will your money be needed?

Points Score: 5 Within 1 year 0 In 1 to 3 years 2 In 4 to 9 years 5

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In 10 or more years 9
2. Are you planning any significant withdrawals (1/3 or more of the

portfolio) before the target date?

Points Score: 5 Definitely will 1 Likely will 2 Not sure whether I will or not 3 Probably will not 5 Definitely will not 7
3. What is your age?

Points Score: 7 Under 30 7 30 to 39 7 40 to 49 7

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50 to 59 5 60 to 69 2 70 or over 1
4. Family Situation

Points Score: 6 Single with an income 6 Two-income household 6 Single income household 2 Retired 1
5. Dependents

Points Score: 5 No children or dependent family members 5 1 child or dependent family members 3 2 or more children or dependent family members
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2
6. Annual income from all sources (before taxes)

Individual Income Household Income Points

or

Score: 6 Under 1,00,000 Under 3,00,000 1 1,00,000 to 2,00,000 3,00,000 to 4,00,000 3 2,00,000 to3,00,000 4,00,000 to 5,00,000 4 3,00,000 to 4,00,000 5,00,000 to 6,00,000 5 Over 4,00,000 Over 6,00,000 6
7. Investment Experience: the majority of my investments fall into the

following category:

Points Score: 5 Not yet started to invest

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0 Post offices schemes 2 Mutual funds and GICs 5 Mutual funds and/or a combination of funds/stocks/bonds 7 Individual stocks and bonds 8
8. Which statement most clearly describes your investment objectives?

Points Score: 6 Im willing to accept a lower, more predictable return because security and regular income are the priorities for my investments. 0 I require regular income from my investments and a relatively consistent rate of return 1 I have a need for income, but Im also interested in some growth 3 I want a combination of modest income and long-term growth 5 My priority is primarily long-term growth 6 My priority is aggressive growth over the long-term 7

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9. Assume you have just invested Rs1,00,000 and intend to leave the

money where it is for 10 years. When you receive your first quarterly statements, you see the value has dropped to Rs90,000. What would you do?

Points Score: 4 Sell my investment immediately, since I am not comfortable with any decline in value. 0 Monitor my investments closely and sell if the value has not recovered in 3 to 4 months. 2 Leave my money where it is, since some changes in value are a normal part of investing. 4 Take advantage of the low price and invest more money, if possible, since Im interested in the long-term value of my investment and Im confident that I have made the right choice. 6
10.

Assume you have Rs1,00,000 to invest. Typically, the higher the level of risk, the higher your potential returns. Each of the following four portfolios show a range of expected annual returns. Select the one with which you feel most comfortable. Probabilities After 1 Year:

Possible Average Chance of Losing

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Return Money POINTS Score: 3 A Portfolio 9% 2% 1 B Portfolio 11% 8% 3 C Portfolio 13% 15% 5 D Portfolio 15% 21% 7

Total Score 52

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Asset Allocation

PORTFOLIO SELECTION

Portfolio Type Range of Scores Clients Total Score 1 Secure all income 19 and under

2 Income 20 31

3 Conservative income growth 32 44

4 Balanced Growth 45 57 52
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5 Growth 58 69

6 Aggressive all equity growth 70 and over

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