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Portfolio Management
Opportunities and



This is to certify that the work project titled FOREIGN
DIRECT INVESTMENT is a bonafide work of [Pratima
Bogati, Ratnesh Doshi, Kavita Singh, Jyoti Tawade & Sunita
Murthy] [Roll nos. 03, 08, 38, 41 & 46 respectively] carried out
in partial fulfillment of degree of [Bachelors in Financial
Markets, Semester III] under the guidance of Ms. Ritu Tuli. The
information given in the project is true to the best of our








What does Portfolio Management mean


What is Portfolio Management Services


Job Opportunities in Portfolio


Types of Portfolio for Management Positions


Challenges in Portfolio Management


How to become an Investment Advisor


What skills or Qualities to become Investment


How much does an Investment Advisor make



It gives us immense pleasure to express our gratitude to all those
who are associated with our project. I am grateful to our college
to have introduced this internal assessment pattern, which gives
us opportunity to conduct real life projects. Firstly I would like
to thank Professor Ritu Tuli for giving us an opportunity to
work on this project. We would like to express profound
gratitude to her. As without her valuable guidance this project
would not have been fully completed.
Sincere thanks to my group members for helping me during the
period of project development. Without their patience and
understanding this project would not have reached its due course
of completion.

What is a Portfolio?

A portfolio is a collection of investments. It can consist of
stocks, bonds, mutual funds, and other investments. When you
hear an investor talk about their portfolio, they are referring to
all of the stocks, bonds, mutual funds, and other investments
they own.
If you owned 20 shares of McDonalds and 10 shares of Wal-
Mart, your entire portfolio would consist of those thirty shares
of stock.


What does Portfolio Management mean?

The art and science of making decisions about investment mix
and policy, matching investments to objectives, asset allocation
for individuals and institutions, and balancing risk against
Portfolio management is all about strengths, weaknesses,
opportunities and threats in the choice of debt v/s equity,
domestic v/s international, growth v/s safety, and many other
tradeoffs encountered in the attempt to maximize return at a
given appetite for risk.

What is a Portfolio Management service?

A portfolio management service is a professional financial
institution devoted to helping individual investors decide how to
comprise their investment portfolios. Such a service may help
the investors decide how much of their portfolios should be
devoted to certain types of securities or may even help them
choose among individual securities. Investors may choose to
employ a portfolio management service to help them deal with
the great volume of investment opportunities available to them.
The service focuses on the investment goals and needs of the
individual and also takes care to see that a portfolio is not at
excessive financial risk.

Investors of all kinds generally hold out the hope that their
portfolios, which represent the entirety of assets which they
hold, will help them reach all of their financial goals, both in the
present and the future. Since many investors lack the experience
and skill to deal with the vast array of investment possibilities
open to them and to understand the intricacies of the various
financial markets, they seek out financial advice from
professionals. An investor will often hire a portfolio
management service to help him reach all of his financial goals.
Many investors who hire a portfolio management service may
already have a stable of investments that they have built up over
time. These investments may include the typical market
investments like stocks and bonds, but they also may include
personal possessions of value, like a family home or a piece of
art that might grow in value. In cases such as this, a portfolio
manager might assess the entire portfolio and suggest possible
Job opportunities in Portfolio Management.

One of the most coveted careers in the financial industry is that
of the portfolio manager. Portfolio managers work with a team
of analysts and researchers, and are ultimately responsible for
making the final investment decisions for a fund - or asset-
management vehicle. While a portfolio manager is a position
that a person must work his or her way up to over the course of a
career, there are a few initial steps that you can take to help you
on your way to being a portfolio manager.

Within a firm, portfolio managers are often promoted from the
rank of research analyst. Working as an analyst is a great

training ground for becoming a portfolio manager. It provides a
framework for making crucial portfolio decisions, such as
buying or selling a security, and determining the underlying
economic conditions that affect those securities.

Types of Portfolio Manager Positions

There is a wide variety of positions within the realm of portfolio
manager. The positions depend on the following criteria:
1. Size of Fund: A portfolio manager may manage assets for a
relatively small independent fund or a large asset
management institution. A portfolio manager may also
manage the capital of a large business such as a bank or an
organization that has a large endowment, such as a college
or university.
A manager who manages assets for a large money
management institution is commonly referred to as a
portfolio manager, while someone who manages smaller
fund assets is typically called a fund manager. Someone
who manages assets for a large business organization or a
college is commonly referred to as a chief investment
officer (CIO).
2. Type of Investment Vehicles: All types of money managers
perform virtually the same function: managing assets for
their respective investment vehicles, which vary widely.
The range of investment vehicles includes retail or mutual
funds, institutional funds, hedge fund products, trust and
pension funds, and commodity and high net worth
investment pools. Portfolio managers may manage equity
or fixed-income investment vehicles and often specialize in
one or the other.

3. Investing Style: In addition to specializing in equity- or
fixed-income investing, portfolio managers tend to
specialize when it comes to styles of investing. The range
of investment styles includes using hedging techniques, a
growth or value style of management, small or large cap
specialties and domestic or international fund investing.

Challenges in Portfolio Management.
Several factors including globalization, recent technology
developments, and recent recession brought several challenges
to portfolio management. Project Portfolio Managers are under
tremendous pressure to show results with very limited resources.
They are not only directing the individual projects correctly, but
are also directing all the projects to ensure that the projects add
business value. Like Project Managers, they also face many
challenges. ESI International conducted an e-mail survey of 28
close-end questions to project and program management
professionals in the US, Europe, Middle East and Asia and the
results revealed the following challenges that they face:
The funding approval process has become more complicated
and time consuming.
Strategic projects obtain significantly less funding than tactical
projects, compared to previous years.
The Project Portfolio directions and strategy change more
Resourcing projects is increasingly difficult and less
They are under more pressure to manage many processes
including funding, project outcomes, project resourcing, and
portfolio direction and strategy

The gap between available funds and the demand for project
deliverables is increasing.
How to become an Investment Advisor
As a general rule, an Investment Advisor must possess a
bachelor's degree. To advance in the profession, that degree
should be related to finance or business administration. Many
Investment Advisors choose to go on to obtain a master's
degree as well as other professional designations.

Most employers require Investment Advisors to have a
bachelor's degree in finance, accounting, statistics, business
administration, or economics. This education may also include
coursework in risk management, taxes, financial analysis,
corporate budgeting, estate planning, tax law, mathematics, and
accounting policies and procedures.

Nearly all Investment Advisors must obtain one or more
licenses, including the Series 7 and Series 63 or 66 licenses.
These licenses are required so that the Investment Advisors may
act as a registered representative, able to give professional
financial advice. The Series 7 license requires that Investment
Advisors have a sponsor; so self-employed Investment Advisors
must have an ongoing relationship with a licensed securities

The main licensing body for Investment Advisors is The
Financial Industry Regulatory Authority (FINRA). Because
there are a variety of licenses that require sponsorship, it is not
necessary for an Investment Advisor to obtain the licenses
before applying to work at a securities firm. Also, if a worker
leaves the firm, a new license must be issued in relation to the
worker's new employer.

What does an Investment Advisor do?
Investment Advisors, often referred to as financial analysts,
may hold one of many different positions, either with an
established securities firm or as an individual. There are
Investment Advisors that specialize in various areas.

In general, Investment Advisors provide guidance for
businesses and individuals interested in making investments.
Investment Advisers are expected to provide sound advice and
analysis on a variety of investments, including stocks and bonds.
Investment Advisers are also expected to gather and analyze
financial information, and to marry the best type of investment
to the client.

It is imperative for Investment Advisors to know and understand
how to assess the economic standing of industries and
individual companies so that the client's investments will be as
sound as possible. To do this, Investment Advisors must know
and understand how to read a company's financial statements
and to analyze various costs, expenses, commodity prices, sales,
and tax rates so that the company's value can be determined.
Based on that information, an Investment Advisor should be
able to project the company's future earnings. Investment
Advisors typically work with securities firms, insurance
companies, investment banks, mutual and pension funds, the
business media, such as newspapers, radio and television, and
other businesses.

Because of the intricate nature of the financial world, Investment
Advisors tend to focus on a specific type of product, industry, or
geographic region. For example, an Investment Advisor may
feel most comfortable and therefore choose to focus on the
options market, real estate industry, or Europe. Larger
companies may choose to divide the research and work between
a number of departments, making the Investment Advisors'
focus even sharper. When an Investment Advisor is able to
dedicate himself to a particular niche market, it is easier to
assess current economic trends in regards to competition,
products, and general business practices. The Investment
Advisor must be able to stay on top of new policies, regulations
and laws that may affect the earning potential or market share of
the chosen industry.

There are also Investment Advisors dedicated to the financial
needs of the individual. Investment Advisors must use many of
the same tactics in providing services to individuals as they
would with corporate clients. The role of the Investment Advisor
on this level entails educating the client on the type of
investments that best suite the client's portfolio or level of
wealth. The client is advised on various types of investments
and insurances through short and long-term goal plans. These
investments commonly include estate planning, retirement plans,
trust funds, college education funding, and general investment
advice. Investment Advisors often have relationships with legal
professionals and certified professional accountants in order to
provide the highest level of knowledge and expertise.


Many Investment Advisors must spend a significant portion of
time marketing their services in an attempt to find news clients.
There are many ways in which to do this, such as holding
lectures and seminars to using personal contacts. One of the
most important aspects to forming a successful financial
business is to have a solid customer base.

What skills or qualities do I need to become an Investment
Investment Advisors must have a number of specialized skills.
These include:
Strong analytical, mathematical, and problem solving skills
Good communication skills, both oral and written
Ability to work independently, motivated
Advanced knowledge of the economy, money markets, and
applicable tax laws
Computer literate with the ability to create spreadsheets and
statistical packages
How much does an Investment Advisor make?
As a general rule, the median annual salaries of Investment
Advisors are difficult to gauge due to the fluctuating nature of
the stock market. In times of economic struggle, the salaries of
Investment Advisers may be severely affected because many
work on a commission basis.


The median annual earnings of Investment Advisors and
Financial Analysts as of May 2006 are as follows:

The average annual salaries, including bonuses, were $66,590.
The lowest reported earnings were $32,340; the highest reported
earnings were more than $145,600.
A mutual fund financial analyst applies tax, accounting,
investment analysis and finance skills to gauge a client's
financial status, investment goals and employment history. A
mutual fund financial analyst then recommends investment
strategies to the client based on economic indicators and the
client's personal data. A mutual fund financial analyst typically
holds a four-year college degree in a business field.

1. A mutual fund financial analyst studies trends in a client's
finances, employment history or investment objectives and
then provides investment recommendations based on client
preferences. These investment recommendations typically
relate to products that the mutual fund sells. A mutual fund
is a financial services company that manages investments
on behalf of clients. For example, Mr. J., a mutual fund
financial analyst working for Company A., may review a
45-year-old electrician's pay stubs or savings and then
recommend investments in corporate stocks.


2. A mutual fund financial analyst typically holds a four-year
college degree in accounting, finance, tax, investment
analysis or economics. A mutual fund financial analyst also
may be a liberal arts major (sociology, history or
archeology, for example) and may receive practical (on-
the-job) training. A mutual fund financial analyst who has
significant responsibilities, such as a manager of a junior
financial analysts team, may hold a master's degree in
finance or investments.
3. A mutual fund financial analyst's total compensation
typically depends on performance, economic outlook,
length of service and academic training. The U.S. Labor
Department's Bureau of Labor Statistics reports that median
wages, excluding bonuses and stock options, of mutual
fund financial analysts were $73,150 in 2008, with the
lowest 10 percent earning less than $43,440 and the highest
10 percent earning more than $141,070.
Career Development
4. A mutual fund financial analyst's chances of promotion
typically depend on performance, business needs and
positive developments in financial markets or in the
economy. A mutual fund financial analyst also may
increase his chances of career opportunities by seeking a
professional license. For example, a mutual fund financial
analyst may seek a Series 10 license related to general
securities sales supervisors or a Series 28 license related to
introducing broker/dealer financial and operations

Work Conditions
5. A mutual fund financial analyst does not work a typical
8:00 a.m. to 5:00 p.m. schedule. A mutual fund financial
analyst's work shift typically depends on business
performance requirements (sales quotas). A mutual fund
financial analyst may work late at night, early in the
morning or on weekend to reach sales quotas. For example,
Mr. B., a mutual fund financial analyst, may call a client on
Memorial Day to discuss the client's financial history and
investment objectives.

A hedge-fund manager is an investment manager who "hedges,"
or performs trading to compensate for risks in his clients'
portfolios. Many hedge-fund managers earn billions of dollars
per year because they typically work with affluent clients and
earn performance fees. Their enormous paychecks lend hedge-
fund managers an aura of myth that obscures what they actually
do. Their job responsibilities largely span financial, consulting
and compliance duties.
Financial Duties
1. Hedge-fund managers primarily oversee their clients'
portfolios, track the stock market and perform trading to
correct risks in those portfolios.


Consulting Duties
2. Hedge-fund managers consult clients, both individuals and
companies, about their investments. They are able to
describe complex financial concepts and investment
Computing Duties
3. Hedge-fund managers work mainly with spreadsheets and
statistical software. They also work with portfolio analysis
and risk-analysis software.
Deep Knowledge of Investment Strategies
4. The primary goal of all hedge-fund managers is to reduce
the impact of market downturns on their clients' portfolios
and to capitalize on market gains. This knowledge requires
substantial background in investment banking or financial
Area of Expertise
5. Hedge-fund managers, unlike mutual-fund managers, do
not invest in multiple industries but usually concentrate on
one area familiar to them. One hedge-fund manager might
invest in futures while another invests in information
Professional Demeanor
6. Because hedge-fund managers work mainly with the
wealthy, they give off a polished, discreet appearance to
earn their clients' trust.