A
Project Report
On
A Study on Portfolio Management
For
Fundsroom
Submitted By
Gaurav Vijay Adhav
Under The Guidence Of,
Dr. Vijayalakshmi Srinivas
Submitted To
Savitribai Phule Pune University
In the partial fulfilment of the requirements for the award of
Master’s in Buisness Administration (MBA)
Through
Progressive Education Society’s
Modern Institute Of Business Management
Batch 2022-24
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DECLARATION
This is to declare that, I Gaurav Vijay Adhav student of Master of Business Administration
MODERN INSTITUTE OF BUSINESS MANAGEMENT, PUNE have given original data
and information to the best of my knowledge in the Project Report title “A Study on
Portfolio Management” under the guidance of Prof. Dr. Vijayalakshmi Srinivas for the year
2022-23. It is work carried out by me as a part of MBA Curriculum, MODERN INSTITUTE
OF BUSINESS MANAGEMENT, PUNE.
I also agree that I wil not share the vital information with any other person outside the
organization and will not submit the project report to any other college, university.
Place: PUNE
Date:
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ACKNOWLEDGEMENT
A project is an opportunity in a management student’s career where he can acquire invaluable
knowledge as to how an organization actually functions and the process of the organization
work management. The satisfaction that accompanies the successful completion of any task
would be incomplete without mentioning the person who guide me and made it possible.
I would like to thank our respected Director, Prof. Dr. Vijayalakshmi Srinivas, Modern
Institue Of Business Management, Pune for giving me this opportunity to undertake
Internship and guide me and also giving suggestion to complete this Summer Internship
Project.
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Table Of Contents
Chapter No. Title Page No.
1 Introduction
2 Ojective Of Study
3 Company / organization Profile
Research Methodology
a. Statement of Problem
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b. Hypothesis
c. Research Design
i) Data Collection Tools and Techniques
ii) Sources of data
iii) Type of Research
iv) Sampling Process
v) Limitations of the Project
5 Data Analysis, Data Interpretation, Hypothesis Testing
6 Diagrams of the Task Performed
7 Suggestions And Recommendations
8 Conclusion
9 Bibliography
Appendix
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Table No. Table Title Page Number
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Executive Summary
The Project on Portfolio Management was carried out for Investment House In Today’s
Competitive world where banks and financial institutions provide number of services which
provides a customer with a wide spectrum of investment opportunities. They in order to
retain their customers provide them special services besides traditional services.
The invention of new technology and services by banks and financial institutions has given
the consumers a wide range of investment avenues to invest in. One of the special services
brought out by banks and financial institutions is PORTFOLIO MANAGEMENT
SERVICES (PMS) which aims at providing an investor to invest into a combination of
securities all together which enables him to earn maximum returns at minimum level of risk
& without any confusion.
I am inclined to this topic, as it has given me actual knowledge of this service along with its
working and how the portfolio manager manages the portfolio.
Moreover, it has guided me to understand this so called complex world of investment and
also increase my knowledge to such extent. I hope it will prove beneficial to me in
developing my further career.
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Introduction :
Meaning:
Portfolio management’s meaning can be explained as the process of managing individuals’
investments so that they maximise their earnings within a given time horizon. Furthermore,
such practices ensure that the capital invested by individuals is not exposed to too much
market risk.
The entire process is based on the ability to make sound decisions. Typically, such a decision
relates to – achieving a profitable investment mix, allocating assets as per risk and financial
goals and diversifying resources to combat capital erosion.
Portfolio Management techniques
Portfolio management techniques allow us, at least not to assume unnecessary risks, to
limit the risk assumed in each individual investment and the portfolio as a whole.
It helps to improve performance where possible and to be able to analyze and compare
with other portfolios that use the same management style. They also allow us to make a
hypothesis about the future and answer the question, “what if?”
Although portfolio management is not an exact science because it deals with the
uncertainty of the future, it allows us to have an adequate framework in which to make
investment decisions.
Types of Portfolio Management
In a broader sense, portfolio management can be classified under 4 major types, namely –
Active portfolio management
In this type of management, the portfolio manager is mostly concerned with generating
maximum returns. Resultantly, they put a significant share of resources in the trading of
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securities. Typically, they purchase stocks when they are undervalued and sell them off when
their value increases.
Passive portfolio management
This particular type of portfolio management is concerned with a fixed profile that aligns
perfectly with the current market trends. The managers are more likely to invest in index
funds with low but steady returns which may seem profitable in the long run.
Discretionary portfolio management
In this particular management type, the portfolio managers are entrusted with the authority to
invest as per their discretion on investors’ behalf. Based on investors’ goals and risk appetite,
the manager may choose whichever investment strategy they deem suitable.
Non-discretionary management
Under this management, the managers provide advice on investment choices. It is up to
investors whether to accept the advice or reject it. Financial experts often recommended
investors to weigh in the merit of professional portfolio managers’ advice before disregarding
them entirely.
Processes of Portfolio Management
Step 1- Identification of objectives
Step 2- Estimating the capital market
Step 3- Decision about asset allocation
Step 4- Formulating suitable portfolio strategies
Step 5- Selecting the profitable investment and securities
Step 6- Implementin portfolio
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Step 7- Evaluating and revising portfolio
Step 8- Rebalancing the composition of portfolio
The classic components of a portfolio are:
Stocks or Equities
Bonds
Cash
Stocks or Equities: These assets are considered high risk and therefore offer
opportunities for high returns. They can also be subclassified by country, sector and/or
by the asset of value or growth, the former tend to offer dividends, while the latter tend
not to offer dividends but the return is usually higher than the market. In addition, they
offer rights at shareholders’ meetings, since in fact, the shareholders own the company.
(Sometimes there are exceptions with class A and class B shares where the latter do not
offer voting rights.)
Bonds: These assets are considered low risk and therefore offer moderate returns, the
advantage is that from the beginning, the investment return is known. These assets are
loans that are made to governments and companies, the maturity date and fixed return or
coupon payment at a certain frequency is pre-fixed. They can also be subclassified as
corporate or government bonds, maturity date, rating, etc.
Cash: We must foresee the money of our portfolio because it will not always be invested
100% and sometimes the cash can be used to make operations in the money market, the
risk can vary from very low to very high, depending on the chosen currency.
Traditional approaches for Portfolio Management
A portfolio is composed of assets and it is the responsibility of the portfolio manager to
decide which assets to incorporate into the portfolio. For this, there are two traditional
approaches
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the bottom-up approach
top-down approach
The bottom-up approach
This approach makes asset selection based on criteria defined by the analyst as P/E,
relative strength, by sectors and so on. This technique is usually known as stock-
picking.
The top-down approach
In the top-down approach where the analyst divides the task of selecting actions into
filters that, quantitatively, reduce the number of options available for inclusion in the
portfolio.
Features of Portfolio Management
When it comes to soliciting clients, PMS has model portfolios. The PMS model portfolio may
be assessed for track record of company selection and overall performance against the market
index.
The portfolio’s performance is solely determined on the manager’s ability to outperform the
market. As a result, conducting portfolio manager due diligence is an important part of
selecting a PMS. The educational background and experience of a portfolio manager
highlights the competency and expertise they bring to the fund.
Another feature of PMS is its investment strategy. It makes sense for an investor to
understand the strategy before committing funds. If the strategies are complicated, the long-
term viability of the strategies should be clearly stated.
Need of Portfolio Management
Portfolio management enables portfolio managers to tailor investment solutions to clients’
specific needs and requirements. Thus a customizable portfolio.
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Portfolio managers assess a client’s financial needs and advise them on the most risk-adjusted
investment strategy.
Importance of Portfolio Management
The significance of portfolio management are as follows:
Customized
PMS provides tailored investment advice to respective clients in order to help them achieve
their financial goals. As well as the portfolio manager can make investment decisions based
on an investor’s risk tolerance and expected returns.
Separate Portfolio
Unlike mutual funds, PMS investments are not influenced or governed by the actions of tens
of thousands of investors. Buying and selling decisions, as well as their timing, are made at
the investor’s discretion (depending on the type of PMS chosen).
Professional Management
The service manages portfolios professionally with the goal of delivering consistent long-
term performance while controlling risk.
Continuous Monitoring
It is critical to recognise that portfolios must be constantly monitored and changes made on a
regular basis in order to achieve optimal results.
Transparent Fee Structure
PMS investments come with a clear fee structure (legally agreed fee structure) and a detailed
list of charges/expenses associated with a portfolio. Furthermore, a performance-based fee
structure and ticket size can be used to tailor the expense ratio.
Advantages of Portfolio Management
Makes Right Investment Choice
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Maximizes Return
Avoids Disaster
Track Performance
Manages Liquidity
Avoids Risk
Improves Financial Understanding
Disadvantages of portfolio management
Risk Of Over Diversification
No Downside Protection
Faulty Forecasting
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Objectives of Project
The main objective of this project is to review the real meaning of Portfolio
Management, its objectives, role, framework, responsibilities of portfolio manager
and the study of various other issues related to it.
To study various investment channels like equities, government securities, corporate
bonds etc.
To examine the Investment House's investment strategy and the current state of the
banking industry.
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COMPANY PROFILE:
Name: FUNDS ROOM pvt. ltd.
Address:203, 2nd Floor, Bremen Business Center, above Bank of India Pune –
Maharashtra, India
Pin Code: 411007.
Particular Company Data
Trade Name Funds room Pvt. Ltd.
Type Private
Area Served India
Key people Masroor Khan– Co founder
Adwait Bhalerao – Co founder
Founded in 2020
Industry BFSI
Services Online investment platform Mutual funds Stocks Digital
gold Real estate
Website www.fundsroom.com
Funds room is an online investment platform which brings various investment asset
classes under one umbrella. The asset classes include but not limited to Mutual Funds, Digital
Gold, Real Estate, Insurance etc. They provide a simple and technologically robust platform
wherein the users can not only invest but also explore different investment sectors. Company
utilize data driven analytics, advanced technical tools to ensure a seamless investment
journey for their users. The beauty of their platform is that they provide a wide-range of
investment asset classes which facilitates the user to select the best sector according to his
demographics, investment capital, knowledge, interest etc. A platform where all classes of
people ranging from HNI to retail investors can come and invest towards a valued tomorrow.
In a nutshell, Funds room is "Shop of investment!”
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Funds room is a trusted platform by more than 9000 customers and 11 Lakh Investors.
Till the date they have carried out about Rs.2.8 crore transactions. Funds Room is growing
automated platform for mutual fund investing. It enables investor to choose best funds from
across the fund universe. It chooses best of the funds from Top Equity Fund, Top Debt Fund,
Top Tax Saving Fund, Top Balanced Fund, and Top Debt Fund & Top Liquid Funds. It
allows investor to invest in completely paperless manner in both lump sum & Funds Room
investment.
Funds Room provides highest of the security so that investor can focus on his investments.
Funds Room offers many benefits some of which are:
➢ Completely digital platform
➢ Customized portfolio for every investor.
➢ No Fees. No Charges.
➢ Start with Minimum Investment of 500/-
Vision & Mission Statement:
"We understand the world of Investing. We firmly believe that investments need to be
planned systematically to achieve certain goals. and that's what we try to do - we assign goal
to each investment and draw a plan to achieve that goal in a systematic way."
It is not the investment product but a goal that is invested in. Our robust technology platform
backed by latest of technological tools and application or data analytics at various stages of
investment like defining the goal, risk profiling. fund recommendation and portfolio
rebalancing makes the entire process seamless, effective & result oriented.
Features of Fundsroom:
Robo Driven Analytics
Customer profiling based on demographic factors sets the stage for Robo driven analytics.
Based on the risk profile category of the investor clubbed with investment horizon, right
funds are identified form the universe of more than 8000 funds.
Funds Universe
Identifying the right set of funds that meets the investment objective is the most critical part
for the entire ecosystem. It’s the fund that meets your objective & hence multiple variables in
the scheme are looked for before finalizing the scheme.
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Goal Dashboard
Racking the performance of your goal till it is achieved is as important as conceptualizing
that goal. Our goal based investor dashboard with real-time updates lets you track your every
single goal till it is achieved & also allowing to do alteration to the goal.
Customized Portfolio
Funds room believe each individual is different & deserves unique fund selection to meet the
desired objective. Hence our system looks at every individual as a unique case & suggest the
solution as per his/her objective.
Risk Profile
Before you start your investment journey, it is important to identify your risk appetite to
suggest you the right set of funds. Based on your demographic variable, Robo driven system
classify each investor into different risk category before suggesting the solution.
Best Digital Tools
System uses the latest of the technological tools to give the best in-class user interface. So be
it our tie-up with Bombay Stock Exchange (BSE) for payment transfer or Secure Sockets
Layer protocol to offer bank grade security, we offer best & latest of the tools.
USP of Funds room–
➢ Clients can select from 5000+ mutual funds and get higher return with 0%
commission.
➢ Allocating clients’ money with the expectation of getting some benefit down
the line.
➢ Investment sectors offered- Choose from low risk to high returns sectors and
build a diversified portfolio.
➢ Helps in balancing your financial risks & growth with no hidden charges or
tricks.
➢ Average rate of return provided is 24.11%
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BOARD MEMBERS:
Name Position Location
Anjali Sharma Business Analyst Intern Bengaluru, Karnataka
Pooja Shedge Human Resources Manager Pune, Maharashtra
Pratham Natani Financial Analyst Pune, Maharashtra
Ketaki Gurav Financial Analyst Pune, Maharashtra
Saurabh Nadgire Financial Analyst Pune, Maharashtra
Neshanto Bordoloi Marketing Intern Kashipur, Uttarakhand
Manan Financial Analyst intern Delhi
Apurva Pandit Human Resources Pune, Maharashtra
Himanshu Khandekar Team Leader Pune, Maharashtra
Akash Narkhede Financial Analyst #Internship Pune, Maharashtra
Er Shubham Business Analyst New Delhi, Delhi
Aggarwal
Mahesh Wagh Sales Executive Pune, Maharashtra
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Research methodology
Research Aim:
To assess how alternative investment strategies affect risk management and portfolio
performance.
Research Problem:
Managing risk and maximizing returns is a common issue in portfolio management. This
involves difficulties with diversification, asset allocation, and market fluctuation adaptation.
For investors and fund managers alike, maintaining a portfolio balance in order to achieve
financial objectives in a volatile market is a constant struggle.
Research Design:
The research design used for this study is descriptive research. The purpose of descriptive
research is to describe a sample's or group's behaviour. It doesn't explain how, why, or when
the behaviour takes place. Instead, it offers an explanation for the behaviours.
1. Data Collection tools and techniques:
To obtain relevant knowledge, portfolio managers use a variety of instruments and methods
for data collection. Financial statements, market news portals, and financial databases are
examples of common instruments. Methods include technical analysis, basic research, and
quantitative analysis. For qualitative insights, questionnaires, interviews, and expert opinions
can also be used.
2. Sources of Data:
Primary data: is the collection of the raw data by the researcher himself using tools like
survey, interview etc.
Secondary Data: Secondary data is a collection of data that has already been collected and
examined through numerous sources such as books, industry official websites, and so on.
3. Types of Research:
The study is conducted in the form of descriptive research.
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4. Sampling Process:
Sampling process is done by taking a feedback from the employee after the training period to
get the data to understand the employee’s satisfaction.
In this research I have use the random sampling method.
Random sampling-
Random sampling is one of the simplest forms of collecting data from the total population.
Under random sampling, each member of the subset carries an equal opportunity of being
chosen as a part of the sampling process.
Sampling unit-
The respondents were all employees of company department i.e. Technology, Maintainer,
production, human resource, etc.
Sample size-
As the name indicates, sample size refers to the number of respondents or the size of the
sample, which is to be surveyed. Here the sample size taken for the study was 10.
5. Limitations:
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Findings:
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