Professional Documents
Culture Documents
My Project2 PDF
My Project2 PDF
On
INVESTMENT STRATEGIES AND PORTFOLIO
MANAGEMENT
SUBMITTED BY:
ESHA SINGLA
A0101907128
SUBMITTED TO:
1
ACKNOWLEDGEMENT
2
DECLARATION
I hereby declare that the work presented in the project report, titled
Investment Strategies and Portfolio Management was carried out by
me as a part of MBA curriculum during 8 weeks summer training
program in the 3rd semester. The report is an authentic record of my
work carried out under the guidance of Mr. Nitish Dipankar in
Standard Chartered Bank. It is further declared that the report has
not been submitted earlier for any other degree or diploma.
3
PREFACE
India is a developing country and we all know that banking sector plays a
very important role. In development with the increasing use of banking and
finance in every field, new trends in their technology and modern use are
being evolved day to day to meet the requirements. Infact BANKING has
become the need of today.
The purpose of PROJECT REPORT is to expose the students in the market
and in the field of banking, finance and investments and to develop the
ability in the students to deal with all types of customers.
Preparing project report in the summer vacations and under going the
summer training is the indispensable part of the college period. It provides
the opportunity to review what we have gained in the training period and
also provides the way to convey the knowledge and ideas to others.
Learning is not possible in solitude and has to have the support and able
guidance of some people around us in various roles and capacities. The
satisfaction and euphoria that accompanies the successful completion of any
task would be incomplete without the mention of the people who made it
possible because success is the epitome of hard work, undeterred missionary
zeal, fast determination, and consideration.
4
EXECUTIVE SUMMARY
5
INDEX
CHAPTER1 INTRODUCTION 7
CHAPTER- 5 CONCLUSION 76
CHAPTER- 5 APPENDIX 78
REFERENCES 80
6
CHAPTER 1
INTRODUCTION
7
1.1 Overview of the Banking System
Central Bank
The Reserve Bank of India is the central Bank that is fully owned by
the Government. It is governed by a central board (headed by a
Governor) appointed by the Central Government. It issues guidelines
8
for the functioning of all banks operating within the country.
a. State Bank of India and its associate banks called the State
Bank Group
b. 19 nationalized banks
c. Regional rural banks mainly sponsored by public sector banks
Co-operative Sector
The co-operative sector is very much useful for rural people. The co-
operative banking sector is divided into the following categories.
IFCI
IDBI
ICICI
IIBI
9
NABARD
Non Resident Indians or NRIs can open accounts in almost all Indian
banks. The three types of accounts that NRIs can open are:
10
o Non-Resident (Ordinary) Account - NRO A/c
o Non-Resident (External) Rupee Account - NRE A/c
o Non-Resident (Foreign Currency) Account - FCNR A/c
The central bank of the country is the Reserve Bank of India (RBI).
Reserve Bank of India was nationalised in the year 1949. The body of
the central bank consists of the Governor and four Deputy
Governors, one Government official from the Ministry of Finance, ten
nominated Directors by the Government to give representation to
important elements in the economic life of the country, and four
nominated Directors by the Central Government to represent the four
local Boards with the headquarters at Mumbai, Kolkata, Chennai and
New Delhi. Local Boards consist of five members each Central
Government appointed for a term of four years to represent territorial
and economic interests and the interests of co-operative and
indigenous banks. The need for bank is:
Bank of Issue
The Bank has the sole right to issue bank notes of all denominations.
The distribution of rupee notes and coins and small coins all over the
country is undertaken by it as agent of the Government. The Reserve
11
Bank has a separate Issue Department which is concerned with the
issue of currency notes. The Reserve Bank of India is required to
maintain gold and foreign exchange reserves of Ra. 200 crores, of
which at least Rs. 115 crores should be in gold. The system as it
exists today is known as the minimum reserve system.
Banker to Government
The scheduled banks can borrow from the Reserve Bank of India on
the basis of eligible securities or get financial accommodation in
times of need or stringency by rediscounting bills of exchange. Since
commercial banks can always expect the Reserve Bank of India to
12
come to their help in times of banking crisis the Reserve Bank
becomes not only the banker's bank but also the lender of the last
resort.
Controller of Credit
The Reserve Bank of India is the controller of credit i.e. it has the
power to influence the volume of credit created by banks in India. It
can do so through changing the Bank rate or through open market
operations. It can ask any particular bank or the whole banking
system not to lend to particular groups or persons on the basis of
certain types of securities.
Supervisory functions
Promotional functions
14
1.2 History of Standard Chartered
15
Was prominent in financing the development of the diamond
fields of Kimberley from 1867 and later extended its network
further north to the new town of Johannesburg when gold was
discovered there in 1885
Expanded in Southern, Central and Eastern Africa and by 1953
had 600 offices
In 1965, it merged with the Bank of West Africa expanding its
operations into Cameroon, Gambia, Ghana, Nigeria and Sierra
Leone
16
Standard Chartered leading the way
17
Trusted across its network for its standard of governance and
corporate responsibility, Standard Chartered takes a long term view
of the consequences of its actions to ensure that the Bank builds a
sustainable business through social inclusion, environmental
protection and good governance.
2005 and 2006 were historic years for us as we achieved several milestones
with a number of strategic alliances and acquisitions that will extend our
customer or geographic reach and broaden our product range.
19
We launched a tender offer in the end of 2006 for 100% in Hsinchu
International Bank, Taiwan.
PERSONAL BANKING
1. Savings Account
v) Online Banking
b) No Frills It is designed to i)Free cheque Rs. 250
Account meet you basic deposit at ant
banking SCB branch or
requirements ATM
ii)Access your
account from any
branch of SCB
20
Debit card
iv)Phone banking
v)Online banking
c)Parivaar It allows you to i)Maintain Rs. 25,000
Account maintain your individual savings
individual identity account with the
while allowing you benefit of clubbing
to tap your familys balances in
financial strength. grouped
accounts.
ii)Option of SIP
that allows you to
invest a fixed
amount of money
every month in
specific portfolio.
iii)Globally valid
ATM-cum-Debit
card.
iv)Phone Banking
v)Online Banking
d)Aasaan It is a basic, no i)No minimum Rs. 0
Account maintenance and balance required.
hassle free ii)Unlimited free
savings account. access to SCB
ATMs.
iii)International
Debit Card
iv)Phone Banking
21
v)Online Banking
2. CREDIT CARDS
Standard Chartered Bank has a tie up with Bajaj Allianz Life Insurance
Company and Royal Sundaram General Insurance to offer a variety of
products in order to cover all insurance requirements.
They offer:
22
As we grow, we believe our diverse and inclusive approach provides
engaging opportunities for our employees to develop, both as
individuals and as part of a team. We are committed to creating a
healthy, safe and fulfilling work environment in which people can
grow, individuals can make a difference and teams can win.
They are:
23
attached to such decisions and that we take steps to address
them
Tackling financial crime making sure that we have the right
systems in place to detect such things as fraud and money
laundering and exceed, rather than simply meet, increasingly
stringent legal requirements in this field
Access to financial services making sure we develop new
ways for those deprived of banking services to get proper
access to finance so that they can improve their standard of
living and economic independence
Responsible selling & marketing making sure we treat
customers fairly and set the highest standards in service and
transparency
Protecting the environment making sure we not only
minimize our own direct impact on the environment but support
others, such as customers, to do the same. We also want to
support the development and commercialization of
technologies and schemes that tackle environmental threats
like climate change
Great place to work making sure that with our people, who
represent over 100 nationalities from over 50 countries, feel
valued, included and engaged. We're determined to attract,
develop and retain the best people and to leverage the strength
the diversity of our people brings, which is an incomparable
advantage
Community investment making sure we involve our
employees and utilise our core expertise, networks and
resources to help communities develop and economies to grow
24
Governance
25
Environmental Steering Group
Health and Safety Steering Group
Group Risk Committee
Reputation Risk Committees
Seeing is Believing Committee
Living with HIV Advisory Committee
Community Partnership Boards
Engagement
26
We have been working on our stakeholder engagement programme
for some years. Work in this area has recently increased as continue
to build a clearer picture of our global stakeholder audience including
government departments and agencies, socially responsible
investors, academic institutions, business associations and non-
governmental organisations. In 2006 we invited 60 of our key
stakeholders to help us develop our 'building a sustainable business'
strategy. Their contributions many of which are included in our 2006
Sustainability Review helped us decide what our sustainable
development priorities should be.
Our Business
27
Acquisition of distressed asset portfolios
Investments in loans and bonds
Offering priority loans (DIP), subordinated or mezzanine debt
Offering structured investments
Investments in equity
Investments in hybrid structures
Our Strengths
About Investment
It is the money that you save and channelize into sources that gives
you return i.e. use of money in hope of making more money.
29
fund, securities market related instruments like shares, bonds,
debentures etc.
31
e) Mutual funds- These are funds operated by an investment
company which raises money from the public and invests
in a group of assets [shares, debentures etc] in
accordance with a stated set of objectives .It is a
substitute for those who are unable to invest directly in
equities or debt because of resource, time or knowledge
constraints. Benefits include professional money
management, buying in small amounts and
diversification. Mutual fund units are issued and
redeemed by the fund management company based on
the funds Net Asset Value [NAV], which is determined at
the end of each trading session. Mutual funds are usually
long terms investment vehicle though there some
categories of mutual funds, such as money market mutual
funds which are short term instruments.
About Portfolio
Decline in any one security will not affect the entire portfolio
32
Investments across various types of assets and markets will
reduce the risk of entire portfolio getting affected by the
adverse returns of any single asset class.
CHAPTER 2
RESEARCH
METHODOLOGY
33
Research Methodology
OBJECTIVE
TYPE OF RESEARCH
SAMPLE DESIGN
34
2. Secondary data. The major source of secondary data was the
reference books and companys website. The companys
articles and magazines were also referred to for the
information.
CHAPTER-3
DATA COLLECTION
35
3.1 Sources of Data Collection
1. SAVINGS ACCOUNT
a. AXcessPlus
Get instant cash at over 20,000 ATMs across India and over
10,00,000 ATMs across the world through the Visa network. And get
a globally valid Debit Card that lets you shop at over 3,26,000 outlets
in India and at over 14 million outlets across the world.
36
FREE Unlimited Visa ATM transactions* (Cash withdrawal and
balance enquiry)
county
Phone Banking
NetBanking and
b. Parivaar
c. No Frills Account
You can now open an account with Standard Chartered Bank, with an
average quarterly balance of as low as Rs. 250. Whats more you
can avail of Anywhere Banking, by which you can access your
account from any branch of Standard Chartered Bank in India.
Eligibility criteria
d. AaSaan
Other Facilities
Kotak
Features ICICI HDFC Mahindra ABN Amro StanChart
Flex
Name of saving accounts Saving Regular Edge Advantage a
Saving Plus Pro Flex Plus S
SavingsMax Ace Flex Prvilage aa
No
Average Quarterly Balance 10,000 Regular - 5,000 Edge - 10,000 Advantage - aXc
39
0
Plus - 10,000 Pro - 20,000 Plus - 10,000 Super
Privilage -
Max - 25,000 Ace - 75,000 25,000 a
No
Annual Maintenance charges 750 Regular - 750 Edge - 750 750 aXce
Plus - 750-1000 Pro - 750 Supe
Max - 1000-1500 Ace - 1200 No
Annual Debit card charges 99 500 Global - 100 180 + Taxes Sho
G
UTI & 5
ATM Swap charges Free Andhra Bank & HDFC-free transaction Free
from any
SBI-NA bank- Free
40
In addition to serving as a protective cover, life insurance acts as a
flexible money-saving scheme, which empowers you to accumulate
wealth-to buy a new car, get your children married and even retire
comfortably.
Asset Protection
41
income due to critical illness or death of the policyholder.
Simultaneously, insurance products also have a strong inbuilt wealth
creation proposition. The customer therefore benefits on two counts
and life insurance occupies a unique space in the landscape of
investment options available to a customer.
Each of us has some goals in life for which we need to save. For a
young, newly married couple, it could be buying a house. Once, they
decide to start a family, the goal changes to planning for the
education or marriage of their children. As one grows older, planning
for one's retirement will begin to take precedence.
Clearly, as your life stage and therefore your financial goals change,
the instrument in which you invest should offer corresponding
benefits pertinent to the new life stage.
The table below gives a general guide to the plans that are
appropriate for different life stages.
Life Insurance
Life Stage Primary Need
Product
Young & Wealth creation
Asset creation
Single plans
Wealth creation
Young & Just Asset creation
and mortgage
married & protection
protection plans
Married with Children's Education
42
insurance,
education, mortgage
kids Asset creation protection &
and protection wealth creation
plans
Planning for Retirement
Middle aged
retirement & solutions &
with grown
asset mortgage
up kids
protection protection
Across all
Health plans Health Insurance
life-stages
The Bajaj Allianz New UnitGain Super comes with a host of features
to allow you to have the best of all worlds - Protection and
Investments. It enables every participant to create a solid financial
protection and savings plan for himself and his family. In this way, as
a participant in the Bajaj Allianz New UnitGain Super Plan, you can
secure your well being and accumulate savings towards financial
independence and a comfortable retirement.
They offer the best in financial planning. One can now avail of the
twin benefit of risk protection as well as getting market-linked return
on your investment. An insurance plan that works round the clock to
meet the changing requirements in life additional protection, more
money to invest, sudden requirement of cash or a steady post-
retirement income. With Bajaj Allianz New UnitGain Super, you can
invest in one life insurance plan that can take care of all your
changing requirements. This plan has been designed to provide your
family with higher financial assistance should anything unfortunate
43
were to happen to you as well as flexibility, so that you do not have to
worry about your changing needs.
You can adopt your own investment strategy to grow the funds
contributed.
Choice of 6 investment funds today with flexible investment
management: you can change funds at any time and also invest in
the newer funds that would be introduced from time to time.
44
Investment Options:
Bajaj Allianz New UnitGain Super offers you a choice of 3 funds. You
can choose to invest fully in any one fund or allocate your premiums
into the various funds in a proportion that suits your investment
needs.
FUND EXPOSURE
Bank Deposits and Money Market 0%-15%
Instruments
Equities 85%-
100%
FUND EXPOSURE
Bank Deposits and Money Market 0%-20%
Instruments
Equities 80%-
100%
45
FUND EXPOSURE
Bank Deposits and Money Market 0%-20%
Instruments
Not more than 20% of the 80%-
apportioned premium can be put 100%
in this fund
FUND EXPOSURE
Bank Deposits and Money Market 100%
Instruments
Not more than 20% of the
apportioned premium can be put
46
in this fund
FUND EXPOSURE
Bank Deposits and Money Market 0%-20%
Instruments
G-Secs, Bonds and Fixed 80%-
Deposits 100%
3. MUTUAL FUNDS
47
Benefits
The reason that mutual funds are so popular is that they offer the
ability to easily invest in increasingly more complicated financial
markets. A large part of the success of mutual funds is also the
advantages they offer in terms of diversification, professional
management and liquidity.
48
Diversification - Risk is lowered with Mutual Funds as they invest
across different industries & stocks.
NAV= CA-CL
No.of Units
If the market price decreases, the no. of units held by the investor
increases and vice versa.
49
CHAPTER-4
ANALYSIS &
INTERPRETATION
50
ANALYSIS AND INTERPRETATION
a) 18-25 yrs
54%
51
Q2. What is your Occupation?
30
25 (b) Salaried, 25
no. of respnoders in a
particular occupation
20
category
15
10 (d) others, 10
(a) Business, 8 (c) Self Employed,
5 7
0
various occupations
14% of the responds are self employed and the rest 20% into other
occupation.
52
Q3. Under which range your Household Income falls?
53
Q4. What is your objective behind Investments?
Proportion of objectives
44
favouring the objective
Number of responders
32
29
23
15 14
1
(a) Safety &
benefits
(e) Future
(f) Managing
(d) Expecting
uncertainties
(g) Others
Retirement
good Returns
(c) Tax
security of
plans
capital
(b)
various objectives
54
Q5. How do you take financial decisions?
sources of decision
1% (a) Independently
19% 22%
(b) Word of mouth
9% (c) Broker
(d) Advise from a CA
(e) Advise from a Bank
8% (f) Financial Advisors
29%
12% (g) Others (please specify)
19% of the respondents take their financial decisions with the help of
financial advisors.
55
Q6. How much Risk are you willing to take?
Risk ability
(a) High
12%
(b) Low
18%
(c) Moderate
70%
18% of the respondents i.e. 9 people are risk averse so they make
investments in those securities which have less risk involved.
56
Q7. What do you have presently in your portfolio in form of
investment?
financial products
44
No. of responders having the product in thier portfolio
32
27
26
24
20
13
(a) Fixed deposits (b) Property/Land (c) Ulip (d) Gold (e) Life insurance (f) Government (g) Mutual funds (h) Equity/Shares (i) Others
policies bonds
various financial products for investments
57
Q8. How would you rate the satisfaction level with your current
portfolio?
satisfaction level
4%
18%
Excellent
Very Good
0%
very poor
6%
Average
2%
Poor
70% Good
Out of the total sample size of 50, only 4% of the respondents i.e. 2
people rate their portfolio as Excellent as they must be getting good
returns from their investment.
58
Remaining 2% of the total population do not have much idea about
the investment strategies so may not be getting much returns so they
rate their portfolio as Poor.
i) Occupation
16
14
14
paritcular 18-25 yrs of age for
12
no. of responsers of age
particular occupation
10
8 7
6
4
4
2
2
0
(a) Business (b) Salaried (c) Self Employed (d) others
occupations avialable
59
Out of the total sample population, 7 respondents out of 27 are
neither into job, nor business. They have either invested into the
share or commodity markets or they are students.
Out of 27, 4 respondents are self employed i.e. they have joined their
family business.
60
ii) Income
12 11
10
10
8
no. of responders
of 18-25yrs of age 6
in each level 4
4
2
2
0
(a) < 2 lakhs (b) 2-5 lakhs (c) 5-10 lakhs (d) > 10lakhs
various income levels avialable
proportions of responders income level for the age group 18-25 yrs
61
The above graph shows the income level of the respondents in the
age group of 18-25 years.
Around 20% of this age group has an income above 10 lakhs and
the remaining 10% are below 2 lakhs.
62
iii) Risk
high
15%
low
19%
moderate
66%
Those who take low risk invest in liquid funds, debt funds and in
some of the government bonds.
The remaining 15% of the respondents take high risk which means
that they invest in equity, mutual funds and other risky instruments.
63
Distribution of occupation,income level,risk level of responders of age
group 18-25yrs
20
18 18
16
No. of responders for the
14 14
12 occupation
particular
11
10 10 income
8 risk level
7
6
5
4 4 4 4
2 2
0
levels of occupation, risk and income
The yellow line depicts the risk level, pink depicts the income level
and blue depicts the occupation of the respondents.
According to the survey, when the income level of this age group is
below 2 lakhs, they can invest in those instruments that have low risk
attached to it and the occupation of such respondents is salaried
employees.
All those whose income level range from 5-10 lakhs, they their risk
taking ability is also higher then others.
64
Finally all those respondents whose income level is above 10 lakhs
invest in all those investments which have high risk associated with it.
i) Occupation
6 6
5
4
No. of
3 2
respondents 2
2
1 1
0
a) Business
b) Salaried
c)Self Employed
d)Others
Occupation
There are 11 respondents out of 50 who are in the age group of 25-
35 years.
No.of
Occupation Respondents
a) Business 2
b) Salaried 6
c)Self Employed 2
d)Others 1
ii) Income
65
Distribution of Income for the Age group 25-35 yrs
0%
27%
36%
<2 Lacs
2-5 lacs
5-10 lacs
>10 Lacs
37%
iii) Risk
66
Distribution of Risk for the Age group 25-35 yrs
9%
9%
High
Low
Moderate
82%
67
Distribution of Occupation, Income and Risk level of
respondents of age group 25-35 yrs
10
9
8
No. of respondents
6 6 Occupation
Income
4 4 4 Risk
3
2 2 2
1 1 1
0 0 0
1 2 3 4
Occupation, Income and Risk level
In the graph above, yellow line depicts risk, ping line depicts income
and blue line depicts occupation.
In the graph above, as the income increases, the risk taking ability
also increases. All those whose occupation is of salaried employee
take less risk as compared to those who are into business.
others
20%
business
40%
self employed
20%
salary
20%
ii) Income
69
Distribution of income levels of responders of age group 35-45yrs
40% 40%
40%
35%
30%
25% 20%
% of responders in
20%
each income level
15%
10%
5% 0%
0%
(a) < 2 lakhs (b) 2-5 lakhs (c) 5-10 lakhs (d) > 10lakhs
various income levels
iii) Risk
70
Distribution of risk level accepted by the responders of age group
35-45yrs
80
80
60 20
% of responders of
the age group in 40 0
each risk level
20
0
high low moderate
various risks level avialable
71
i) Occupation
60.00% 57.14%
50.00%
40.00%
30.00% 28.57%
20.00%
14.29%
10.00%
0.00% 0.00%
S1
a) Business b) Salaried c) Self d) Others
Employed
ii) Income
72
Distribution of Income for the Age group >45 yrs
0%
0%
43%
<2 Lacs
2-5 lacs
5-10 lacs
>10 Lacs
57%
iii) Risk
73
Distribution of Risk for the Age group >45 yrs
57.14%
60.00%
50.00%
40.00%
28.57%
30.00%
20.00% 14.29%
10.00%
0.00%
High Low Moderate
Finally there are only 14.29% of the respondents who invest in those
instruments carrying high risk with it.
74
Distribution of Occupation, Income and Risk level for thw
respondents of the age group >45 yrs
4.5
4 4 4 4
No. of respondents
3.5
3 3 Occupation
2.5
Income
2 2 2
1.5 Risk
1 1 1
0.5
0 0 0 0
1 2 3 4
Level of Occupation, Income and Risk
In the graph above, as you can see, the age group above 45 years is
not willing to take high risk if their income level is not above 5 lakhs
per year.
Those having income level above 5-10 lakhs can invest in those
instruments that bear high risk.
All those respondents who are into business can take moderate risk.
75
CHAPTER 5
CONCLUSION
CONCLUSION
76
The project Investment Strategies and Portfolio Management has
helped me a lot to gain an insight about the various banking
products.
Around 30% of the people have invested in the plan ULIP and 30%-
40% of the respondents have invested in Mutual Funds.
77
CHAPTER- 6
APPENDIX
78
QUESTIONNAIRE
Dear respondent this questionnaire is meant for the purpose of research on the
topicINVESTMENT STRATEGIES AND PORTFOLIO MANAGEMENT for a
continuous evaluation of summer internship as part of MBA (G) program of Amity
Business School, Amity University, UP. It will be assured that the data collected will not
be misused.
Name: Contact No:
8). How would you rate the satisfaction level with your current portfolio?
(a) Excellent (b) Very Good
(c) Good (d) Average
(e) Poor (f) Very Poor
79
REFERENCES
References
80
1. Website
www.standardchartered.org
2. Books
81
82