Portfolio Management and types

-Ameya Pimpalgaonkar

Portfolio management is the professional management of shares, bonds etc, assets (e.g. real estate), to meet specified investment goals for the benefit of the investors. portfolio is an appropriate mix of or collection of investments held by an institution or a private individual.

We can divide portfolios into three, namely Conservative portfolio, Moderate portfolio and Aggressive portfolio. These portfolios have been designed keeping in mind various key parameters like the time horizon of investment, returns expected, the indices to which they are benchmarked etc.

Portfolio Management is an incomplete exercise without a periodic review. Every security should be subject to severe scrutiny and a case made out for its continuation or disposal. The frequency of review will depend on the size; amount involved and the kind of securities held in the portfolio. We have included the intervals at which the performance of each portfolio will be reviewed.

Type of portfolios:

Conservative:

The conservative portfolio is in the nature of direct equity. The ideal investment horizon is 18-24 months. The universe for selection of stocks is the BSE Sensex/Nifty and BSE 100/BSE 500. The minimum number of sectors is five with the maximum exposure to each sector capped at 20%. The portfolio will include 12-15 stocks. The performance review for this portfolio will be done on a quarterly basis.

 

Moderate:

The Moderate portfolio is in the nature of direct equity. The ideal investment horizon is 12-15 months. The universe for selection of stocks is the BSE 500. The minimum number of sectors is five with the maximum exposure to each sector capped at 20%. The portfolio will include 12-15 stocks and has certain allocation to cash as well. The performance review for this portfolio will be done on a quarterly basis.

Aggressive:

Regards,