“PORTFOLIO MANAGEMENT SERVICE SCHEMES PROVIDED BY KARVY AND SHAREKHAN”
ADAM SMITH INSTITUTE OF MANAGEMENT
“Expression of feelings by words makes them less significant when it comes to make statement of gratitude”
With regard to my Project with Karvy and Share Khan, I would like to thank each and every one who offered help, guidelines and support whenever required.
I sincerely express my thankfulness to Ms Hemalatta ,Faculty Guide, Adam Smith Institute of Management for their valuable suggestions and help during the project.
I hereby declare that this Summer Internship Project Report entitled “Portfolio management service schemes provided by Karvy and Sharekhan” in Share Khan Limited submitted in partial fulfillment of requirement of MBA(Management Of Business Administration) to Adam Smith Institute Of Management, Bangalore is based on primary and secondary data founded by me in various department ,books magazines and websites .
This is an original piece of work and has not been submitted to any other institution or university for any purpose.
TABLE OF CONTENTS
Introduction to Study
Myths About PMS
Introduction to Stock Exchange
Company profile of Karvy
Work structure of Karvy
Product and Services offered by Company
Company introduction of Sharekhan
Work structure of Sharekhan
Reasons to Choose Karvy and Sharekhan
Objective of the Project
Scope of the Study
Methodology for Data Collection
Portfolio Management Services
Need of PMS
Objective of PMS
Risk and Risk Aversion
Risk versus Return
Techniques of PMS
Data analysis and interpretation
Conclusion & Suggestion
Observation and Findings
Limitations of the Project
EX ECUTIVE SUMMARY
Investing is both Arts and Science. Every Individual has their own specific financial need and expectation based on their risk taking capabilities, whereas some needs and expectation are universal. Therefore, we find that the scenario of the Stock Market is changing day by day hours
by hours and minute by minute. The evaluation of financial planning has been increased through
decades, which can be best seen in customers. Now a day's investments have become very
important part of income saving.
In order to keep the Investor safe from market fluctuation and make them profitable, Portfolio Management Services (PMS) is fast gaining Investment Option for the High Networth Individual (HNI). There is growing competition between brokerage firms in post reform India. For investor it is always difficult to decide which brokerage firm to choose.
The research design is analytical in nature. A questionnaire was prepared and distributed to Investors. The investor's profile is based on the results of a questionnaire that the Investors completed. The Sample consists of 100 investors from various broker's premises. The target
customers were Investors who are trading in the stock market.
In order to identify the effectiveness of Karvy and Sharekhan PMS services this Research is carried throughout the area of Bangalore. At the time of investing money everyone look for the Risk factor involve in the Investment option. The Report is prepared on the basis of Research work done through the different Research Mythology the data is collected from both the source
Primary sources which consist of Questionnaire and secondary data is collected from different sources such as Company website, Magazine and other sources.
In this project I have shown the details of financial planning as well as wealth management so as to understand about the customer's needs and wants with respect to market and how a client's portfolio can be designed and what factors a portfolio manager must consider for designing a portfolio.
INTRODUCTION TO STUDY
The field of investment traditionally divided into security analysis and portfolio management. The heart of security analysis is valuation of financial assets. Value in turn is the function of risk and return. These two concepts are in the study of investment .Investment can be defined the commitment of funds to one or more assets that will be held over for some future time period.
In today fast growing world many opportunities are available, so in order to move with changes and grab the best opportunities in the field of investments a professional fund manager is necessary. Therefore, in the present scenario the Portfolio Management Services (PMS) is fast gaining importance as an investment alternative for the High Networth Investors.
Portfolio Management Services (PMS) is an investment portfolio in stocks, fixed income,
debt, cash, structured products and other individual securities, managed by a professional money manager that can potentially be tailored to meet specific investment objectives. When you invest in PMS, you own individual securities unlike a mutual fund investor, who owns units of the entire fund. You have the freedom and flexibility to tailor your portfolio to address personal preferences and financial goals. Although portfolio managers may oversee hundreds of portfolio, your account may be unique.
Investment Management Solution in PMS can be provided in the following ways:
ii. Non Discretionary
Under these services, the choice as well as the timings of the investment decisions rest solely with the Portfolio Manager.
Under these services, the portfolio manager only suggests the investment ideas. The choice as well as the timings of the investment decisions rest solely with the Investor. However the execution of trade is done by the portfolio manager.
Under these services, the portfolio manager only suggests the investment ideas. The choice as well as the execution of the investment decisions rest solely with the Investor.
Rule 2, clause (d) of the SEBI (portfolio managers) Rules, 1993 defines the term “Portfolio” as “total holding of securities belonging to any person”. As a matter of fact, portfolio is combination of assets the outcomes of which cannot be defined with certainty new assets could be physical assets, real estates, land, building, gold etc. or financial assets like stocks, equity, debenture, deposits etc.
Portfolio management refers to managing efficiently the investment in the securities held by professional for others.
Merchant banker and the portfolio management with a view to ensure maximum return by such investment with minimum risk of loss of return on the money invested in securities held by them for their clients. The aim Portfolio management is to achieve the maximum return from a portfolio, which has been delegated to be managed by manger or financial institution.
There are lots of organization in the market on the lookout for the people like you who need their portfolios managed for them .They have trained and skilled talent will work on your money to make it do more for you. Therefore, if any investors still insist on managing their own portfolio, then ensure you build discipline into their investment. Work out their strategy and stand by it.
MYTH S ABOUT PMS
There are two most common myths found about Portfolio Management Services (PMS)
which we found among most of the Investors. They are as follows.
Myth No. 1: “PMS and Mutual Fund are Similar as the investment option”
As in the Finance Basket both the PMS and Mutual Fund are used for minimizing risk and maximize the profit of the Investors. The objectives are similar as in both the product but they are different from each other in certain aspects. They are as follows.
In PMS, it's ongoing personalized access to professional money management services.
Whereas, in Mutual fund gives personalize access to money.
In PMS, Portfolio can be tailored to address each investor's specific needs. Whereas in
Mutual Fund Portfolio structured to meet the fund's stated investment objectives.
In PMS, Investors directly own the individual securities in their portfolio, allowing for tax
management flexibility, whereas in Mutual Fund Shareholders own shares of the fund and cannot influence buy and sell decisions or control their exposure to incurring tax liabilities.
In PMS, managers may hold cash; they are not required to hold cash to meet redemptions, whereas, Mutual funds generally hold some cash to meet redemptions
PMS generally gives higher minimum investments than mutual funds. Generally, minimum ranges from: Rs. 1 Crore + for Equity Options Rs. 5 Crore + for Fixed Income Options Rs. 20 Lacs + for Structured Products, whereas in Mutual Fund Provide ongoing, personalized access to professional money management services.
PMS is generally more flexible than mutual funds. The Portfolio Manager may move to 100% cash if it required. The Portfolio Manager may take his own time in building up the portfolio. The Portfolio Manager can also manage a portfolio with disproportionate allocation to select compelling opportunities whereas, in Mutual Fund comparatively less flexible.
Myth No. 2: “PMS is more Risk free than other Financial Instrument”
In Financial Market Risk factor is common in all the financial products, but yes it is true that Risk Factor vary from each other due to its nature. All investments involve a certain amount of risk, including the possible erosion of the principal amount invested, which varies depending on the security selected. For example, investments in small and mid-sized companies tend to involve more risk than investments in larger companies.