“A STUDY ON PORTFOLIO

CONSTRUCTION USING SHARPE’S SINGLE

INDEX MODEL”

R A D H I KA K A D AM
1TB18MBA17
COMPANY PROFILE
 ZEVA ASTRA’s is into wealth management, It was established in year 2017 at Bengaluru.
 It was founded by Basavaraj Puttappa & C. Deepak Srinivas who is a MS graduate from MIT
UK.
 It has a AUM of Rs 100crs with employee strength of 20 members.
 They invest in innovative financial products, manages taxes and plan client’s investments.
 Zeva Astra’s stands out in the market as it is technology driven which makes them unique from
its competitors. It provides tailor made PMS solutions to their clients.
 The company has association with the NGO – Asha Kirana.
RESEARCH GAP
 The study emphasises on the Portfolio construction using Sharpe’s Single Index Model.
 The data is collected for 5 years, which are listed in NIFTY50 for 15 companies.
 Monthly data is used.
 No short sales
 The main purpose is to analyse the stocks which are volatile to invest.
RESEARCH DESIGN
Objectives of the study:
To empirically construct an optimal portfolio with the Sharpe Single Index Model.
Calculation of the percentage of investments which are invested in individual share included in
the portfolio construction.
To understand & analyse the best portfolio
 RESEARCH METHOD
Type of Research - Analytical
research method
Type of data used – Secondary data
Type of Sampling – Judgemental Sampling
Sample size - 15 companies are selected listed in NIFTY50

RESEARCH TOOLS:
Average return
Beta
Standard deviation
Systematic and Unsystematic risk
Sharpe’s Single Index Model.
 FINDINGS
 Fifteen stocks are selected from different sectors in NSE.
 The standard deviation of BPCL, ITC and SBI which tells that the investor investing in the stocks should
bear high risk and other standard deviation of stocks have moderate risk.
 Using Sharpe’s model 15 portfolios are analysed and the stock which is under performing is neglected by
arriving at the cut-off point and resulting to it 10 portfolios are having good return.
 The portfolio consisting of are Dr REDDY’s Laboratory, JSW steel, HUL, ITC, Cipla, Nestle, HCL Tech,
Wipro, Reliance and Infosys are constructed and they are above the cuto ff point.
 SBI and ICICI has high beta value it indicates that it is high volatile compared to other stock.
 JSW Steel, HUL and HCL have the higher proportion of investment is 19.08%, 19.04%, 14.46%
respectively.
SUGGESSTION
 From the study we came to know that predicting share price are very difficult as share market
is high volatile. The fall and raise of market index and share prices are depend on many factors of
micro environment. It is very essential for the shareholder to continuously monitor his
investment.
 Therefore, it is recommended to investors who are looking to invest in Risk hours they can invest
in JSW Steel, it has high risk and return.
The return and risk are the two face of coin so, the investors expect mor return than more risk.
Therefore, the investor selects the portfolio investment that gives better
 CONCLUSION
The study tells that all sectors has been playing major in growth of Indian economy. These sectors are
contributing most favourably on growth, asset quality and profitability.
Hence an investor should be in place to analyse the various investment options available to him and
maximize return and minimize risk. Most of the investors are to be invested in stock market based on the
strong and weak form of information.
The investor should always be aware on what is the condition of the market so can be able to choose the
right stocks to make an investment.
Final conclusion that the form of analysing so far is clear that the Single index model will help to analyses
risk and returns of companies.