Capital Market » Portfolio Management

TYPES OF PORTFOLIO MANAGEMENT

capitalmarket — Mon, 19 Apr 2010 06:30:03 +0000

The two types of portfolio management services are available to the investors:

1. The Discretionary portfolio management services (DPMS):

■ In this type of services, the client parts with his money in favor of manager, who in return, handles all the paper work, makes all the decisions and gives a good return on the investment and for this he charges a certain fees.

■ In this discretionary PMS, to maximize the yield, almost all portfolio managers parks the funds in the money market securities such as overnight market, 182 days treasury bills and 90 days commercial bills.

■ Normally, return on such investment varies from 14 to 18 per cent, depending on the call money rates prevailing at the time of investment.

2. The Non-discretionary portfolio management services:
■ The manager function as a counselor, but the investor is free to accept or reject the manager’s advice; the manager for a services charge also undertakes the paper work.

■ The manager concentrates on stock market instruments with a portfolio tailor made to the risk taking ability of the investor.

ADVANTAGES OF PORTFOLIO MANAGEMENT

capitalmarket — Thu, 10 Sep 2009 09:40:58 +0000

Capital markets over a long period have always given a better return than any other investment.
The investment in stock markets by individuals is a complicated business. It is better that a professional handles this.

TYPES OF PORTFOLIO MANAGEMENT

capitalmarket — Thu, 10 Sep 2009 09:39:23 +0000

There are two types of Portfolio Management which are desribed below:

1. The discretionary portfolio management service (DPMS): In this type, the client gives his money for investment to the manager, who handles the paperwork. makes all investment decisions and gives good return to the investors and charges a fee for the service rebdered.

2. The non-discretionary portfolio management service: In this scheme, the manager functions as a counsellor, but the investor is free to accept or reject the manager’s advise; the paperwork is also undertaken by the manager for a service charge. The manager concentrates on stock market instruments with a portfolio tailor-made to the risk taking ability of the investor.

Functions of Portfolio Management

capitalmarket — Thu, 10 Sep 2009 20:35:40 +0000

To frame investment strategy and select an investment mix.

To provide a balanced portfolio, which will hedge against inflation and also optimise returns.

To make timely decisions regarding sale and purchase of securities.

To maximize after tax return by investing part of the portfolio in tax savings investments.

Introduction to Portfolio Management

capitalmarket — Wed, 09 Sep 2009 20:36:36 +0000

A portfolio is collection of assets. In portfolio management these assets are financial in nature. The portfolio manager invests the money in diverse assets with the aim of maximizing returns and minimizing the risk.

Portfolio manager means any person who pursuant to a contact with a client undertakes the management of a portfolio of securities or the funds of the client.

Portfolio management can be institutional in nature. The mutual funds are a kind of portfolio schemes. Recently many new Pension Funds have been launched. These funds also have to build a portfolio so that a return can be generated for the participants.