Investosure- HNS Pro Solutions Pvt Ltd Venture

PORTFOLIO MANAGEMENT
STUDY MATERIAL FOR REFERENCE
 Investosure- HNS Pro Solutions Pvt Ltd Venture

Company Introduction

Investosure is a trade mark registered under the name of HNS Capital solutions
Pvt ltd. We started as a proprietor firm in 2010 as private fund lender organization with a
single branch in Sonipat, Haryana. In 2012, we entered insurance sector and mutual
fundsmarketing. By 2014, we were able to provide our clients with various investment
options and avenues.

Now, we have grown to a team of more than 250+ members across 5 locations in Delhi
NCR. Our motive is to provide financial stability and security to individuals.
 Investosure- HNS Pro Solutions Pvt Ltd Venture

What is a Portfolio

A portfolio can be defined as different investments tools namely stocks, shares,

mutual funds, bonds, cash all combined together depending specifically on the
investor’s income, budget, risk appetite and the holding period. It is formed in such
a way that it stabilizes the risk of non-performance of different pools of
investments. (Financial goal)

Budget income- 50000 P.m.= (50*12) =6 lac * 10 = 60 lac = 1.0 lac - gold -
real estate - share market (5 lac per annum ) = 50 lac in 10 year - 1cr

Risk Appetite - Risk taking capacity -moderate / higher / low (10000/-

shares - - trading (Intraday - value plus) 50000/- 40000/- (10000/)0/-

 Holding Period - time frame - 10 yrs./ 20 yrs. (84 lac) 6 months - end
of the life
 Goal - 1.0 cr/ Financial

 Risk = Return = higher movement = higher return

 Financial Goals - Amount required to do/for a particular personal goals

in life example: Retirement, Purchase of assets like, car, property, etc.
or Child higher education, child marriage/ wealth creation.

 Saving - No risk / No return / Tax saving - Growth of money

=(Directly proportional)

 Movement of money - Individual - Country/ State ’s economy

 5% - 1.0 lac - 2021 -1.05 lac -2022

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INFLATION
Inflation is the rate of increase in prices over a given period of time. Inflation is
typically a broad measure, such as the overall increase in prices or the increase in
the cost of living in a country.

It is in simple word depreciation of money in a year cycle; currently for our country
it’s around 5%. Which means that value of 1 lac rupees will be 95k next year.

Inflation: 400/ Plot - 400000/- 4 cr 5% - 1.0 lac - 1.05lac

100k - 95k
40 lac + 5%
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 What is Portfolio Management?

 (Choosing of investment option- Entry and exit point )

Portfolio Management is defined as the art and science of making decisions about
the investment mix and policy, matching investments to objectives, asset allocation
for individuals and institutions, and balancing risk against performance.

Simply put it, someone has given you their hard earned money and you need to help
them increase the capital in the best of diversified ways. This should be in a way in
which the risk- return ratio is aptly maintained considering the profits in mind and
the holding period of investments.

Portfolio management refers to managing an individual’s investments in the form of

bonds, shares, cash, mutual funds, insurance etc. so that he earns the maximum
profits within the stipulated time frame. It is the art of managing the money of an
individual under the expert guidance of portfolio managers.

It is the detailed SWOT analysis (strengths, weaknesses, opportunities, and threats)

of an investment AVENUE/OPTIONS, which could be in the form of debt/equity,
domestic/international, with the goal of maximizing return at a given appetite for
risk

 Minimize the risk

 Maximize the profits
 Maintain risk and return ratio
 One should achieve the financial goal within time frame

Bullish - market/ share is green

Bearish - market/share is red

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Types of Portfolio Management

There are majorly four types of portfolio management methods:

 Discretionary portfolio management: In this form, the individual authorizes the

portfolio manager to take care of his financial needs on his behalf- PM (MF)

 Non-discretionary portfolio management: Here the portfolio manager can

merely advise the client what is good or bad, correct / incorrect for him, but
the client reserves the full right to take his own decisions- Client/Customer.

 Passive portfolio management: It is the form which involves only tracking the
index.

 Active portfolio management: This includes a team of members who take

active decisions based on hard core research before investing the corpus into
any investment avenue. (E.g. close ended funds).

**Mutual Funds are perfect example for both Discreet and non-discreet

Before investing in specific MF schemes we have all the rights to choose from
different schemes so it’s Non Discreet.

Once we have invested in MF – it becomes discreet as we don’t have any access or

right to modify the details in MF schemes.
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Objectives of Portfolio Management

It is aptly put as the customization of the investment needs catered by the
portfolio managers as per the defined requirements.
Portfolio management helps in providing the best options for investments to
individuals as per the defined criterions of their income, budget, age, holding
period and risk taking capacity.
This is mainly done by the Portfolio managers who understand the investors’
financial needs and accordingly suggest the investment policy that would have
maximum returns with minimum risks involved. Aptly put, it is risk reduction
through diversification.
 This is the method preferred by those who believe in having liquidity in
investments so that one can get the money back when
needed.(Liquidity - cash/funds availability

 Some of the portfolio management schemes are also done for tax
saving purposes.

 It helps the investors maintain the purchasing power

In General Terms below are the main Objectives of Portfolio Management:

 Maximizing the profit and Minimizing the risk involve in investment

through diversification

 Help individual/client to achieve set goals as his criteria - Income,

Budget, holding period, risk , goal setup

 Financial stability- liquidity for emergency situations and foresees

hidden risk (Protection and Investment )

 Tax saving - Income tax / Direct tax

 Increasing Purchasing power of client / banking

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Who would opt for Portfolio management?

 Limited knowledge: It is opted by someone who would like to invest

in different investment avenues like stocks, metals, other
commodities but does not have the knowledge of doing it.

 Limitation of time: People who would be from a different work profile

may not have the time to set and track their portfolio and hence would
hand it over to learn and experienced hands

How Portfolio Management takes place practically:

The actual method of Portfolio Management is different from that we do it

academically. The investors carry out a market survey in terms of the
different schemes and their performances in the past, the fund managers
involved their experiences and risk-reward ratio and accordingly select the
fund in which they would chip in their money.

 It is initiated with a contract between the investor and the company that
would have different portfolio schemes. These could be purely
stock/shares oriented or may have a blend of different investment
avenues.

 Once the contract is in place, verifying the fee structure, time frame,
risk exposure and the kind whether discretionary or nondiscretionary
is decided.

 After all this is in place, the fund manager plays his role. The portfolio
is structured on the basis of the agreed terms and then churns the
portfolio at regular intervals.

 The report of the performance of the portfolio is periodically sent to the

investors.

 There are certain computer-software that are used by the managers to

keep a track of the developments in the portfolio.
 Investosure- HNS Pro Solutions Pvt Ltd Venture

 The fund manager takes decisions on the basis of the hardcore

research that is company specific as well as market- related done by
the team of the portfolio managers.

Example of Portfolio Management

Say the investor has Rs. 1,00,000 to start with and the manager has to
distribute this across the different investment options. So the portfolio
manager according to the risk-taking capacity and the kind of returns
calculated provides a portfolio structured in tandem with that.

So for example, the portfolio could include real estate, fixed deposits with
banks, mutual funds, shares, and bonds. There shall be bifurcation across
these five units of the total corpus provided thereby, depending on the
security and the return from these

 35 - Risk is low
 35%- Risk is high = Moderate
 Overall risk= Average/moderate the bifurcation is done.
 Overall return = Above Average
 45 – Average
 35- high(20high+20low)
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On the other hand, the portfolio could be stock specific as well. Thereby, the
bifurcation is done across researched stocks in the markets.

Good return= Risk- Moderate/ Average

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COMPARISON B/W INVESTMENT AVENUES

Investment avenues

MF - Return is on Moderate = Risk is also moderate side - No (with 100rs,

liquidity, returns, ELSS- opt 80C)/ short tenure - poor return/ its market
based/) 20lac - (after, 14 lac) (3 -10 yrs.)TAT / SEBI - Fund Manager Fees.

REAL ESTATE - Longer tenure - More profit - No (huge amount

required / Liquidity/return) No tax saving (2008- 2010) RERA

Case Study

 Neemrana - Rajasthan / Haryana - Govt 2000- Industrial Area- development -

Plotting - 2500- 2005 12000sq/ft. 2010 - 15000 sq./ft. - 5000/- 2012 (Vivek
200sq/ft. - 12000*200= 24000000 - (2008- 2018) 3000sq/ft. - 6.0 lac )

 Earth Infra/ Amarpali/ Builder Noida Extension - before 2014 – Modi

Govt RERA - Strong Policies - Builder Project Delivery deadline
2008 - 1cr - 2018- 40 lac (60 lac)
 Demonetization - cash no - bank account
 Market Hype - Raj Nagar Extension/ Troinca City – NOIDA 2005 -2018 (70%)

 GOLD - NO ( long run) Highest Return and No Risk )/ in short tenure _ risk
higher/ No tax waiver(SEBI)

 Trading ( Share market - currency, commodities, equities) Intraday/Positional

/No tax saving / 300000- 50000

 BIG FISH - 20 billon - 2days - 21 days 200 million USD ;

Bill Hwang
 Peak hours when market is rotated big bulls , Other market timings -Movement
- Maximum profit
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 Insurance - 8%, -/80C/DD (Tenure is minimum for 5 years ) ( 1000) Protection +

risk free(50000)two side- IRDAI

 Provident funds - 6 -8% - Yes( EPFO/ NPS)- 80ccd(20 years )/50000

 Bonds & Debts - 5-6% - Tax saving very secure (5 to 20)(SEBI)

 Banking sector - FD/RD - 6 - 7 % - one sided tax saving (6- months to n

numbers)10 years – RBI

 Mutual Fund Schemes _ Fund Manager - Client - Money- Control / authorization

Fund Manager (Discreet Portfolio) Collection of different shares (Mid cap/ small
cap / large cap.
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Types of MF Schemes

 Equity MF - equity (high risk / high return) 18% (No Time Boundation) No tax
Savings(Income Tax ) T +1/2
 Debts - debts( low risk / low return) 7%(No Time Boundation) No tax Savings
 Hybrid - combination equity + debts( moderate return/ moderate risk) 12%(No
Time Boundation) No tax Savings
 ELSS - minimum 5 year - 8% - Tax saving - equity linked saving schemes

Tax Slabs

Tax Slab Old Rates New Rates

0 – 2,50,000 0% 0%
2,50,000 – 5,00,000 5% 5%
5,00,000 – 7,50,000 20% 10%
7,50,000 – 10,00,000 20% 15%
10,00,000-12,50,000 30% 20%
12,50,000 – 14,99,999 30% 25%
15,00,000 & above 30% 30%
Total taxes
Cess (4%)
Total tax need to pay