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STUDY OF PORTFOLIO

ANALYSIS

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Table of Contents

1. EXECUTIVE SUMMARY .................................................................................................................... 1

2. INTRODUCTION ................................................................................................................................. 5

2.1 Industry Overview .................................................................................................................................................5

2.1.1 Porter’s five forces analysis ...............................................................................................................................7

2.2 About the Organization .........................................................................................................................................9

2.2.1 Products and services offered by the Company ............................................................................................. 10

2.2.2 Clients ................................................................................................................................................................ 11

2.2.3 Key Competitors ............................................................................................................................................... 13

2.3 SWOT Analysis .................................................................................................................................................... 14

3. INTRODUCTION TO INTERNSHIP .............................................................................................. 15

3.1 Finance Module.................................................................................................................................................... 16


3.1.1 Personal Financial Planning ........................................................................................................................... 16
3.1.2 Study of Portfolio Analysis ............................................................................................................................ 17
3.1.3 Survey ............................................................................................................................................................ 19
3.1.4 Clients Portfolios ............................................................................................................................................ 32

3.2 Marketing Module ............................................................................................................................................... 44

5. CONCLUSION ..................................................................................................................................... 45

6. ATTACHMENT .................................................................................................................................. 47

6.1 Questionnaire ....................................................................................................................................................... 47

7. REFERENCES ..................................................................................................................................... 52

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1. Executive Summary

 Student Information:

Name: Manisha Aggarwal


Enrolment no. - 17BSP1446
E-mail – manisha.aggarwal17@ibsindia.org

 Organization Description:

Name: Stallion Capital Management


Website: www.stallioncap.in/
Address: 408, RG Trade Tower, NSP, Pitampura, Delhi-110034
Main Activity: Wealth Advisory and consultancy

Stallion Capital Management was established in 2013. It is a wealth advisory firm, which work
with successful people at different stages of their lives and provides them with the expert’s
strategic financial advice they require to achieve or maintain financial independence.
Stallion capital Management is able to facilitate various training and development programs /
internships in India as well as abroad with top B-school and has trained almost 52000 and above
interns till date. Company is having asset under management of RS.80cr.The operations of the
company are spread beyond the national boundaries of India.

 Title of the SIP report: “Study of Portfolio Analysis”.

 Objectives of the Study:

a) To manage the portfolios of prospective clients.


b) To study the customers attitude towards various financial products.
c) To aware them about Personal Financial Planning
d) To find out the factors which influenced the customers buying behavior.

 Methodology:
Quantitative and qualitative research is conducted based on secondary (openly published data)
and primary data (survey, personal interaction)

 Scope of work:

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In order to provide the financial service in form of optimum portfolio, I have to understand the
process/ working of the portfolio, to identify the investor’s objectives & preferences and
implementation of the strategies in tune with their investment objectives. At Stallion, I was an
intern as a wealth manager and have been providing suggestions in form of financial solutions
to the clients. In the internship there were two modules:

a) Finance module:
In finance module, I have to interact with the prospective clients, to aware them about
the personal financial planning and to understand their knowledge about wealth
management, in order to help them in achieving their financial goals, through
reconstructing their portfolios.

b) Marketing module:
This module was related to kind of payback to the company, in which I have to find the
customers for my company and have to sold the endowment plans of HDFC Bank to
the prospective clients.

During these modules, we were also indulged into some other activities related to management,
HR and digital marketing, in order to enhance our skills in other fields as well.
Those activities were:

1. Money Multiplier
2. Campus Drive
3. High-Flyer Contest
4. Product Development – ‘Innovation and You’
5. E-mail Marketing
6. Constructing Problem Solving Organizer

 Findings:
As per my findings, the investment preference of investors varies from each other as per their
age, income, dependents, financial goals etc. as the age increases the risk appetite of investor
decreases, the riskier securities tend to fluctuate more than market fluctuations giving higher
returns than the market as in contrary to this conservative securities tend to fluctuate less than
the market giving less returns.

 Recommendations (to the investors):


I would recommend the investors to invest in the securities by having some knowledge about
the risk and return deriving out of that security and applying their wit before investment or it
would be better to get an advice from an expert financial advisor/advisory.

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 Special Achievements:

Winner of High-Flyer contest


During the marketing module, this contest was conducted for the intern, who will sell the
insurance product at the earliest. And I was the one to sell the insurance on the very first day
and to won this contest.

Runner up in Money Multiplier Activity


This was the activity related to multiply the certain amount of money as many times as
possible, only within an hour, through providing services or reselling to the general public.

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RESEARCH METHODOLOGY

Scope:
 Monitoring the performance of portfolio by incorporating the latest market conditions.
 Making an evaluation of portfolio income (comparison with targets and achievement).

Data Source:
The sources of data collected are:
1. Primary Data:
 Survey
 Client Interaction
2. Secondary Data:
 Stallion Capital official website
 HDFC Life official website
 Various other websites (in reference)

Sampling method:
 Sample size: 70
 Sample unit: Existing customers of Stallion Capital and own reference.
 Sample area: North India
 Sample Technique: Convenience sampling

Tools Used For Analysis:


MS excel
Limitations of the study:
 Constant changes in the securities as per the market and its interpretation.
 Reading the efficiency of the market as it changes and its effect on our securities.
 Persuading the client as to invest in the portfolio suggested.
 A period of 3 months was not sufficient to understand the working of portfolio management
as the scope of its working is vast.
 There are various techniques of portfolio management, but only those techniques have been
included in the project which is widely used by the analyst and industry.

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2. Introduction
2.1 Industry Overview
Indian financial services industry is the backbone of economic growth and development of
a nation. Finance industry enables creation of new business and expansion of existing ones.
Ultimately this facilitates more employment and job creation with the growth of other
mainstream industries. The financial services industry manages money for individuals and
corporations. Finance sector mainly comprises of commercial banks, insurance companies,
non-banking financial companies (NBFC), co-operatives, pension funds, mutual funds and
other smaller financial entities.

 The asset management industry in India is among the fastest growing in the world. As of
November 2017, 42 asset management companies were operating in the country
 At the end of March 2018, the assets under management of the mutual fund industry stood
at Rs 21.36 lakh crore (US$ 331.42 billion).
 India registered a record inflow of amount of US$ 51.02 billion in mutual funds in FY
2016-17. According to the Association of Mutual Funds in India (AMFI) data, this was the
highest investment in mutual fund schemes since the fiscal 1999-2000.
 The number of mutual fund (MF) portfolios has increased to 66.5 million as of December
2017, backed by rising interest in MFs among investoRs.
 Mutual fund (MF) equity portfolios in India reached a 10-year high of 49.3 million, by end
of 2017.
 The number of listed companies on NSE and BSE increased from 6,445 in FY10 to 7,501
in March 2018.
 The market capitalization of all the companies listed on the BSE reached a record Rs 150
lakh crore (US$ 2.33 trillion) backed by high gains in the broader market.
 The amount raised by IPOs in India increased from US$ 318 million in FY 2008-09 to US$
10,888 million in FY 2017-18*.
 Initial Public Offers (IPOs) by small and medium enterprises (SMEs) in India received
record funding of Rs 16.79 billion (US$ 259.35 million) in 2017 through 133 issues.
 The total amount of initial public offerings increased to Rs 84,357 crore (US$ 13,089
million) by the end of FY18.

Notes: FII – Foreign Institutional Investors, NSE – National Stock Exchange, BSE –
Bombay Stock Exchange, AUM – Assets Under Management, *

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Government incentives for financial services industry
SEBI has allowed exchanges in India to operate in equity and commodity segments
simultaneously, starting from October 2018. The banking regulator has recently allowed inclusion
of payments banks for better facility of fund transfer.
The Government and RBI have taken various measures to facilitate easy access to finance for
Micro, Small and Medium Enterprises. They have launched Credit Guarantee Fund Scheme for
Micro and Small Enterprises. Government has also set up Micro Units Development and Refinance
Agency (MUDRA) for small scale industries.

Road ahead for Indian financial services industry


India is today one of the most vibrant global economies, on the back of robust banking and
insurance sectors.
The Association of Mutual Funds in India (AMFI) is targeting nearly five fold growth in assets
under management (AUM) to Rs 95 lakh crore (US$ 1.47 trillion) and a more than three times
growth in investor accounts to 130 million by 2025.
India’s mobile wallet industry is estimated to grow at a Compound Annual Growth Rate (CAGR)
of 150 per cent to reach US$ 4.4 billion by 2022 while mobile wallet transactions to touch Rs 32
trillion (USD $ 492.6 billion) by 2022.

Indian financial services industry outlook for 2018


It is projected that national savings in India will reach US$ 1,272 billion by 2019. Over 95 per cent
of household savings in India goes to bank deposits and only 5 per cent in other financial asset
classes. But landscape is changing rapidly at present.
The relaxation of foreign investment rules has received a positive response from the insurance
sector. Many foreign companies announcing plans to increase their stakes in joint ventures with
Indian companies. Over the coming quarters there could be a series of joint venture deals between
global insurance giants and local players.
We are positive on brokerage industry, few holding companies, low cost housing finance
industry and insurance industry for 2018 and beyond. NBFC Industry is one of our favorite
industry at present where as we foresee challenges in Indian baking sector.

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2.1.1 Porter’s five forces analysis

As per Michael Porter, through analysis of five forces an industry can be evaluated to know the
potential of that particular industry. The five forces are:

Threat of New Entrants


Bargaining Power of
High Buyers
New independent broker. Medium
Number of sub-industries Large number of buyers.
developing
Era of technolgy: availabilty
Switching cost to new of every information.
customers.
Cost of switching is high
Close customer relations.

Bargaining Power of
Suppliers Availability of Substitutes
High High
Large no. of suppliers with Products from companies
diversifiesd products and like Milestone and India
services. Bulls are present.
Torrential hike in the Other industries are
commission and benefits of developing which can
provide the same services.
the suppliers.

Industry Rivalry
High
Individual financial
planners can also be
competitor.

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1. Threat of new entrants
As there is always a threat of new entrants in any market entrants in form of broker’s dealer
players as well as discounters, banks, insurance companies and credit unions enter the
market/ industries. The number of sub-industries developing within the financial services
industry has seen dramatic growth over the last couple of decades.
For instance, almost anyone can get a job with an insurance company selling insurance.
2. Bargaining power of suppliers
As long as financial service industry is concerned the suppliers are the Mutual fund
companies, hedge funds, other broker dealers in structured deals, separate account
managers, life insurance companies and advisors. Their bargaining power has grown over
the last 20 years and there has been a torrential hike in the commission and benefits of these
suppliers. And in order to remain enough various financial firms and industries pay these
“suppliers” a raised salary with additional bonus and perks.
3. Bargaining power of buyers
As we are living in a modern world every information is just a click away to the users and
buyers. In the previous times when the buyers didn’t have the information or any medium
to information the financial service providers could manipulate them and can misguide
them in order to benefit themselves. But as we are in the world of internet we have every
information to benefit us by taking a look at the services provided by these service
providers.
4. Threat of substitutes
Financial Services firms are not the place where investors go to become wealthier. It is the
place wealthy people go in hopes of maintaining their wealth.
This had opened a gate for substitutes such as wealth management industry which performs
wealth transfer, wealth preservation and wealth creation. Wealth Transfer can be handled
by insurance companies. Wealth Preservation by banks, trust companies, life insurance
companies. Wealth Creation in this country has always been through the creation of
businesses.
5. Intensity of rivalry
There is high intensity of rivalry among the financial services competitors to outperform
each other by providing various schemes and policies by taking a look in another’s scheme
and to make their product a better one to induce buyer. But due to various Government
norms there are some restrictions on competition among these competitors.

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2.2 About the Organization

Stallion Capital is a wealth advisory firm, which work with successful people at different stages
of their lives and provide them with the expert strategic financial advice they require to achieve,
or maintain financial independence. Our clients want to take control of their financial future and
we help them achieve this goal. By leveraging our expertise to create and implement a strategic
financial roadmap we can assist them to protect, grow and manage their wealth.
Stallion was established in 2013, on the principles of delivering high returns to its clients through
the network of government sector banks like PNB, Etc. Though client base is spread across, BFSI
Sector & Telecom. Since the company have a large client base in Banking Sector consisting more
of Public Sector Banks. Few of the prominent Banks are Punjab National Bank, Bank of Karnataka,
Bank of Baroda, Andhra Bank, etc. Stallion capital Management is able to facilitate various
training and development programs / internships in India and abroad with top B-school and has
trained almost 52000 and above interns till date. Company is having asset under management of
80cr. The operations of the company are spread beyond the national boundaries of India.

Mission - “To put all the financial transactions of client at one place for easy access and
planning.”

Vision - "To be most admired wealth management firm with best components.”

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2.2.1 Products and services offered by the Company

 Wealth Management:
The term Wealth Management refers to a professional investment and advisory service that
offers financial planning, investment management and other types of specialized financial
advice.

 Proprietary Financial Planning:


We offer property advisory services for all residential and commercial properties, rendered
by our expert team members having thorough market knowledge in residential, industrial
leading Prices.
We work on the following area:
1. Negotiate on Property valuation / deal on behalf of clients and get better value of
money.
2. To make appropriate proposal favoring our clients.
3. Projects offering assured return on investment.
4. Cash flow analysis & financial Modeling.
5. Legal documentation of properties in a methodical manner
.
 Portfolio Management:
A portfolio Management refers to the science of analyzing the strengths, weaknesses,
opportunities and threats for performing wide range of activities related to the one's
portfolio for maximizing the return at a given risk.

 Tax and retirement planning:


Tax planning is simply optimizing both the timing and strategy of your business tax
matters, to ensure that you pay as little tax possible. Those strategies should be geared to
optimize and improve business growth.
The goal of retirement planning is to achieve financial independence. So, we are here to
help you with the best advice regarding retirement savings.

 Mutual funds advisory:


Mutual Funds are measured on relative performance. Their performance is compared to a
relevant index such as the S&P 500 Index or to other Mutual Funds in their same sector.

 Business loan assistance:


We deploy technology and apply innovation to create unique and compelling propositions
that help you do what you always with the Business Loans from Bank, Financial
Institutions & FDIs. We help in making and designing appropriate project reports and

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presentations. Most of these features are industry firsts and come only with our portfolio
offerings.

2.2.2 Clients

Client base of the company varies from Entrepreneur to service professionals, old to young and
seasoned to first time investor. Client list is such that it would entice anybody to opt for their
Services Company has decided to build a focused approach to selected specific client only. Its aim
is to serve serious client with the vision of long term relation.

Clients age profile:

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Clients profile:

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2.2.3 Key Competitors

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2.3 SWOT Analysis

 Successful diversification in other


fields such as training programs
Strengths through various parts of world
 Professional consultant with
experience of more than 20 years
 Good corporate tie-ups, like with
HDFC Life, ICICI, etc.
 Solution to all financial problems
under one roof.
 Multi-lingual staff.

 Low key I.T. infrastructures as


Weakness compared to big brands
 Low marketing and brand
presence
 Lack of track record
 Fewer formal training programs

 Growing rural markets


Opportunities  Earning urban youth looking for
investments
 Could use their customer
relationships for increasing
database
 Cross selling through financial
services such as banking

Threats  Competition from large


companies
 Increasing no. of advisory firms

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3. INTRODUCTION TO INTERNSHIP

I joined the organization STALION CAPITAL MANAGEMENT (Wealth advisory firm) as a


Financial Wealth Manager on 22nd February 2018. The internship started with the training and
developing program which includes two modules:

1. Finance module
2. Marketing module

In stallion capital management my main task is facilitating the financial planning on basis of need
of the individual customers.

For that purpose I conducted a survey of 70 people in order to understand the buying behavior
and need analysis of individuals as per the financials requirements and financial goals of the
customers in the future and maintaining the portfolio of some individual clients on basis of the
above analysis and suggesting that on which assets they should invest and preparing a bouquet of
assets, so as to meet their financial goals in a particular period of time and besides this I have also
done some marketing and selling activities.

Apart from this, we have also done the sales of two Endowment Plans of HDFC Bank, i.e.
Sampoorna Samridhi Plus and Super Income Plan. Along with we have also created the awareness
about Personal Financial Planning among our prospective clients.

After completing the above part before time, we were given the chance to learn the basics of Digital
marketing, in which we learnt about email marketing and how to create email campaigns, list
building, etc.

We have also learnt the basics of HR as well, which included the interview process, use of an HR
software – payroll, ESS portal, attendance and leave.

From mangers point of view, we learnt to make the Problem Solving Organizer and various other
activities were conducted in order to enhance our overall skill set.

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3.1 Finance Module

Under the finance module, I have interacted with the no. of prospective clients, to aware
them about the personal financial planning and to understand their views on different
investment products; companies and institutions, who are selling related product and
services and their knowledge about wealth management. Reason behind the above was to
better understand the customer, so that it could have helped me while analyzing the
portfolios.

3.1.1 Personal Financial Planning

Financial planning is the process of meeting your life goals through the proper management
of your finances. Like goals can include buying a house, children’s education or for
retirement. The financial planning process includes five steps that helps you take a ‘big
picture’ look at where you are now, what you may need in the future and what you must
do to reach your goals. The process involves gathering relevant financial information,
setting life goals, examining your current financial status and coming up with a strategy or
a plan how you can meet your goals given your current solution and future plans.
A plan is a simple matter of listing out your needs and wants, and deploying the money in
right avenues so that you have it when you need it. As a first step, calculate your existing
worth and identify the goals for which you will require money in the future. Calculate the
exact amount required for each goal after factoring in inflation and the time horizon in
which you want it.
Find out your risk-taking ability and then pick the instruments you want to invest in (asset
allocation). Link your investments to goals and you won’t have to scrounge around for
money when you need it. Build a plan the minute you are employed because you can invest
without straining your finances and without the burden of responsibilities.

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More importantly, it will help you gain from the power of compounding. So if you wake up to the
need of a retirement kitty at 40, you’re likely to save much less than if you started at 25 (see
graphic). It is likely that your planning will go for a toss in a market collapse like that of 2008, but
will typically stand you in good stead through most ups and downs.

3.1.2 Study of Portfolio Analysis

Firstly we need to answer this question that ‘What is “portfolio”?’


Portfolio is a group of financial assets such as shares, stocks, bonds, debt instruments, mutual
funds, cash equivalents, etc. A portfolio is planned to stabilize the risk of non-performance of
various pools of investment.
In today's financial marketplace, a well-maintained portfolio is vital to any investor's success. As
an individual investor, you need to know how to determine an asset allocation that best conforms
to your personal investment goals and risk tolerance. In other words, your portfolio should meet
your future capital requirements and give you peace of mind while doing so.
Portfolio construction refers to the process of selecting the optimum mix of securities for the
purpose of achieving maximum returns by taking minimum risk.
A portfolio is a combination of various securities such as stocks, bonds and money market
instruments. Diversification of investments helps in spreading risk over many assets; hence one
must diversify securities in the portfolio to create an optimum portfolio and ensure good returns
on portfolio.
Portfolios can be constructed in aligned to investor’s goals and objectives by following a
systematic approach. Here are some essential Steps for construction of a portfolio

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1.
Financial
brief

5. 2.
Recomm- Financial
endations goals

3. Current
4. Gap investme
nt pattern

1. Financial Brief: Under this head, all the financial information of the client is collected
in order to know and understand him. Information collected like: age, annual income,
annual family income, no. of dependents, annual expenses (fixed and variable), etc.
2. Financial Goals: There is always a reason behind any investment and to understand the
same, client is asked about his goals for which he wants to invest, like: child education,
marriage, house, retirement, etc.
3. Current Investment Pattern (CIP): To understand the client’s investment pattern,
he has been asked about his active plans and policies in order to calculate the actual worth
of his investment, on the basis of which further decisions are made.
4. Gap: Now the difference is calculated between the value of goals and actual worth of
CIP. For example: if client’s goal is daughter’s education i.e. after 5 years ad he will require
amount of Rs.22 L. but according to his CIP he would get Rs.17 L after 5 years, then the
Gap is of Rs.5 L, for which action is required.
5. Recommendation: To fill the Gap, financial advisor recommends his clients with some
good investment instruments through which they would be able to fulfill their financial
goals in the year they want.

Therefore following the above steps, I have analyzed the portfolio for some of the clients.
But before that I have conducted a survey of around 70 people, to understand the behavior of
Indian Investors, like what they think while investing and reasons behind choosing any investment,

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bank or any other thing. So that, I can use those instincts, while analyzing my client’s portfolios,
in form of suggestions.

3.1.3 Survey

1.

Conclusion: around 65% of the respondents are male and rests are females.

2.

Conclusion: investors whom I am studying are maximum of age under 39.

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3.

Conclusion: maximum people are in income group of 5lakhs to 20lakhs

4.

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Conclusion: maximum investors like to invest 0-15% of their income

5.

Conclusion: on an average people have very basic knowledge in understanding different


investment avenues.

6.

Conclusion: most of the people don’t have any financial adviser in order to guide them in their
financial decisions. There is a trend of doing it themselves.
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7.

Conclusion: most popular one among the above are: saving a/c, bank fixed deposits and post
office savings.

Conclusion: maximum preference is given to the Life Insurance in moderate risk avenues.

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Conclusion: maximum people know about equity share market in high risk investments.

Conclusion: maximum people like to invest in real estate and gold/silver instead of chit funds in
traditional investment avenues.

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8.

Conclusion: while coming to sector most of the people trust government sector

9.

Conclusion: while investing in any avenue, concern of maximum investors is safety of their
principal following with returns.

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10.

Conclusions: according to the survey everyone has their own different objectives according to
their age and income level but maximum people opt for their children’s education and
retirement.

11.

Conclusions: maximum people invest their money for the wealth creation but with not a big
difference people also do it for tax savings as well as for meeting future expenses.

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12.

Conclusions: maximum no. of people likes to invest in medium term securities, followed by
long term securities.

13.

Conclusions: 51% of the population likes to go for term insurance followed by ULIPS.

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14.

Conclusions: reason behind choosing the term plan over the other type of life insurance is good
returns.

15.

Conclusions: mostly people like to buy the insurance plans from LIC following by HDFC Life.

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16.

Conclusions: Reason behind selecting the LIC for life insurance is mainly the personal
experience.

17.

Conclusions: maximum no. of people likes to invest in mutual funds through ICICI, following
by SBI.

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18.

Conclusions: reason being of selecting the above banks for mutual funds are good returns and
interest rate.

19.

Conclusions: 50% of the respondents like to invest in the share market.

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20.

Conclusions: If stock market will drop, 47% of the population would like to wait to increase in
the price of the stocks.

21.

Conclusions: around 55% of the sample population is not ready to take the risk of losing their
principal investment amount but may be 31% of the population can take a chance.

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FINDINGS

As per my research, the followings are the findings:


 Every investor has their separate needs and financial goals, as per which they invest in
various investment avenues, so as to meet their financial goals and to support their
dependents.
 The investment preference of investors varies from each other as per their age group, i.e.,
whether they are young, or poor, whether they are young earner or on their verge of taking
retirement.
 Besides age group there are other factors which are considered before decision making for
investment purpose. Beside age the other factors for investment are his annual income,
dependents over him as per which securities are considered for his investment purpose.
 The age group is a major factor for investment pattern as for example when the age group
is of 20-30 generally the investment is mostly preferred on equities so as to attain higher
returns out of it, and the risk appetite of the investors is also good and they are described
as high risk tolerant investor as it this age group, they don’t have any dependents over
them, and some part of their investment is also done in debt instruments too in order to
provide safety against the risk arising out of equities.
 As the age-group increases the risk appetite of the investor also decreases due to increase
in dependents over him and to secure their future and to be prepared for a retirement.
 The age group of 25-40 years and above mostly invests in order to save tax and the main
concern of their investment is tax-saving.
 The new investors i.e. the ones who are in the age group of 25-40 years are showing
immense interest in doing investment in various securities that can not only benefitted them
for tax saving purposes but can also proves to be a measure of wealth creation, can provide
for their future expenses and also facilitate long and short term goals which can vary
individual to individual.

While keeping the above instincts in mind, I move forward, towards analyzing the different
client’s portfolios and helping them through giving the suggestions, in view of attaining their
financial goals.

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3.1.4 Clients Portfolios

A) Mr. Ajay Goyal (34 years old)

Ajay stays in Gurgaon, with his homemaker wife and two year old son. He brings the monthly
salary of Rs.75000 and after household expenses of around Rs.25000 and insurance premium of
Rs.12500; he left with the surplus of Rs.37500. He has been living in his own house worth
Rs.20Lakh. His portfolio comprises of real estate, 2.5Lakh in cash, Rs. 6Lakh in EPF, equity in
the form of stocks worth Rs. 4Lakh as well as mutual funds worth Rs.2Lakh. His goals includes
saving for emergencies, child’s education and wedding, buying a house and a car.

Current Portfolio

Asset Current Value


Real Estate 20 Lakh
Cash/Bank 2.5 Lakh
Debt
EPF 6 Lakh
Equity
Stocks 4 Lakh
Mutual Funds 2 Lakh
Total 34.5 Lakh
Liabilities Current Value
Loan Nil
Total Nil
Net Worth RS.34.5 Lakh

Suggestion

 Being a Financial Planner I suggested Mr. Ajay to first build the emergency corpus of
Rs.3Lakh by allocating his cash worth Rs.2.5Lakh and increasing the amount by Rs.50,000
at the earliest. This should be invested in an ultra short-term fund.
 Mr. Ajay wants to buy another house worth Rs. 50Lakh in a couple of years, but I suggested
him to do it in next six months by selling his current property and using it for down
payment. For the remaining Rs.30lakh he can take the loan and EMI will come to Rs.30,428

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p.m. This can be sourced from the surplus. But he should make sure to take the constructed
house.
 For the life insurance Ajay has a 1crore term plan and does not need any more cover. As
for his two traditional plans worth Rs.25lakh, I suggested him to surrender all and use the
part of a premium amount worth Rs10,000 in investing in child’s education. Besides these,
he should pick an accident disability plan worth Rs.25lakh at Rs.334 a month.
 For his child’s education expenses of Rs.50lakh in 16 years, he will need to start an SIP of
Rs.8686.26 p.m. in an equity fund.
 For the kid’s wedding in 23 years, Ajay will need Rs.1crore. He will have to start an SIP
of Rs. 6856.4, which will be sourced from surplus.
 He will however, have to put off his goals of buying a car worth Rs.8lakh for now, due to
lack of surplus as well as priority.

Cash Flow

Existing Suggested
Income 75,000 75,000
Outflow
Household 25,000 25000
Expenses
Loan EMI - 30,428
Insurance Premium 12,500 2,834
Investment - 15,542.75
Total Outflow 37,500 73,470.75
Surplus (in bank) 37,500 1,354

How to invest for goals

Goal Future cost/ time to Resources used Investment


achieve needed/month
Emergency fund 3.7lakh Cash -
Down payment for 20lakh/1 year Real estate EMI of Rs.30,428
house
Child’s education 50lakh/16 years - 8686.26
Child’s wedding 1crore/23 years - 6856.49
Investible surplus 45,970.75
needed
* Annual return assumed to be 12% on equity, inflation assumed to be 6%.

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Insurance portfolio

Insurance Existing Existing Suggestions Suggested


cover monthly monthly
premium premium
Life Insurance

Term Plan 1crore 1,000 1crore 1,000


(existing) (existing)
Traditional plan (2) 25 lakh 10,000 Surrender -
ULIP - - - -
Total 1,000 1,000
Health Insurance
Own 6lakh 1500 No more cover 1500
needed (existing)
Employer’s 4 lakh - - -
Total 10lakh 1,500 - 1,500
Critical illness & - - Buy Rs. 25lakh 334
accident disability accident
disability
Insurance cost - 2,500 - 2,834
*Premium are indicative and could vary

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B) Mr. Shailesh Bansal (38 years old)

Mr. Shailesh stays in Delhi with his homemaker wife (35 years old), twelve year old daughter,
eight year old son and his parents. He owns a business worth Rs.1crore which brings him the
average income of around Rs.2lakh p.m. and after household expenses of around Rs.1,20,000 and
insurance premium of Rs.16,300; he left with the surplus of Rs.63,700. He has been living in his
own house worth Rs.60Lakh; apart from this he also has a piece of land worth Rs.50lakh. His
portfolio comprises of real estate, business, Rs.5Lakh in cash, equity in the form of stocks worth
Rs. 4Lakh, gold worth Rs.25Lakh. His goals include children’s education and wedding, a vacation
and sufficient amount to meet his requirements in old age.

Current Portfolio

Asset Current Value


Real Estate 1.10 crore
Business 1 crore
Cash/Bank 5 Lakh
Gold 30 Lakh
Equity
Stocks 4 Lakh
Total 2.5 Crore
Liabilities Current Value
Loan Nil
Total Nil
Net Worth 2.5 Crore

Suggestion

 Firstly, Mr. Shailesh needs to reduce his monthly expenses at least by Rs.35,000, as he has
less time for investment therefore the amount for investment needed is more.
 Being a Financial Planner I suggested him to finance his girl child’s education expenses he
need to start an SIP of Rs.47,750 p.m. in an equity fund in order to get Rs.50lakh in next 6
years. And for his boy child’s education he will need to invest Rs.27,170 for 10 years to
get the sum of Rs.62.5lakh.
 For the girl’s wedding, Mr. Shailesh will need Rs.75lakh in around 13 years. For which he
already has Gold worth Rs.15lakh. But for rest 60lakh he need to start a monthly investment
of Rs. 16,120 in SIP consisting of diversified equity funds, which will be sourced from
surplus.

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 Similarly for the boy’s marriage he has same amount of gold and further he will require
Rs.85lakh in next 17 years, for which he has to start investing Rs.12,853 in SIP from this
year only. For which he will get the amount from surrendering his traditional plan worth
Rs.25lakh and he can use the part of a premium amount worth Rs10,000 in investing in
child marriage.
 For the life insurance, Mr. Shailesh has a 2crore term plan and does not need any more
cover. Besides these, he already has a health insurance worth Rs.15lakh for which he is
paying Rs. 2,805 a month.
 For meeting the expenses in his old age, Mr. Shaillesh can use his land to get the amount
by giving it on lease or on reverse mortgage.
 For a family vacation, Mr. Shailesh is not left with enough surplus, so he have to wait till
the time of increase in income or finishing uo of any other goal.

Cash Flow

Existing Suggested
Income 2,00,000 2,00,000
Outflow
Household 1,20,000 85,000
Expenses
Insurance Premium 16,300 6,300
Monthly Investment - 103,893
Total Outflow 1,36,300 1,95,193
Surplus 63,700 4,807

How to invest for goals

Goal Future cost/ time Resources used Investment


to achieve needed/month
Girl child’s education 50lakh/6 years - 47,750
Boy child’s education 62.5lakh/10 years - 27,170
Girl child’s wedding 75 lakh/13 years Gold worth 16,120
RS.15lakh
Boy child’s wedding 1crore/17 years Gold worth 12,853
RS.15lakh
Amount to meet old 1.5 crore/22 years Land -
age expenses
Investible surplus 1,03,893
needed

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* Annual return assumed to be 12% on equity, inflation assumed to be 6%.

Insurance portfolio

Insurance Existing Existing Suggestions Suggested


cover monthly monthly
premium premium
Life Insurance

Term Plan 2crore 3,825 No more cover 3,825


needed (existing)
Traditional plan 25lakh 10,000 Surrender -
Ulip - - - -
Total 11,000 3,825
Health Insurance
Own 15lakh 2,805 No more cover 2,805
needed (existing)
Insurance cost - 2,805 - 2,805
*Premium are indicative and could vary

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C) Mr. Vishal Jain (age 30 years)

Mr.Vishal is a salaried person. He stays in Delhi, with his homemaker wife, four year old daughter
and a son of 7 months. He brings the monthly salary of Rs.75,000 and after household expenses
of around Rs.22,000, Rs.5000 contribution to parents, Rs.5000 to PPF account and insurance
premium of Rs.958; he left with the surplus of Rs.42,042. He has been living in his own house
worth Rs.35Lakh. His portfolio comprises of real estate, 4Lakh in cash, Rs. 8Lakh in EPF,
Rs.5lakh in PPF. His goals includes saving for emergencies, child’s education and wedding,
buying a car and planning for retirement.

Current Portfolio

Asset Current Value


Real Estate 35 Lakh
Cash/Bank 4 Lakh
Debt
EPF 8 Lakh
PPF 5 lakh
Total 62 Lakh
Liabilities Current Value
Loan Nil
Total Nil
Net Worth RS.62 Lakh

Suggestion

 For emergency corpus Mr. Jain can use his cash worth Rs.4Lakh and This should be
invested it in an ultra short-term fund.
 For his girl child’s education expenses of Rs.45lakh in 14 years, he will need to start an
SIP of Rs.10,414 p.m. in an equity fund. For boy’s education, he will need Rs.67 lakh after
17 years, for which he need to start investing Rs.10,131 from now onwards only.
 For the kids wedding, Vishal will need Rs.85 lakh and Rs.1crore, in 21 and 24 years for
his girl and boy respectively. For this he will have to start investing in diversified equity
funds under SIP with amount of Rs.7539 and Rs.6038 monthly, which will be sourced from
surplus.

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 For the life insurance Ajay has a 1crore term plan and does not need any more cover.
Besides these, he should pick an family health insurance plan covering upto 6lakh at
Rs.1,450 a month.
 For retirement after 30 years, he will require an amount of Rs.1.14 crore, for which he
needs to start investing monthly Rs.3,262 in SIP.
 For buying a car, Mr.Vishal can use the PPF amount worth Rs.5 lakh after a year, when it
will get matured.

Cash Flow

(monthly) Existing Suggested


Income 75,000 75,000
Outflow
Household Expenses 22,000 22,000
Contribution to 5,000 5,000
parents
Insurance Premium 958 2,408
Monthly Investments 5,000 (PPF) 42,384
Total Outflow 32,958 71,792
Surplus 42,042 3,208

How to invest for goals

Goal Future cost/ time to Resources used Investment


achieve needed/month
Emergency fund 4lakh Cash -
Girl’s education 45lakh/14 year - 10,414
Boy’s education 67lakh/17 years - 10,131
Girl’s wedding 85lakh/21 years - 7,539
Boy’s wedding 1 crore/24 years - 6,038
Retirement 1.14 crore/30 years EPF 3,262
Buying a car 5lakh/1 year PPF _
Investible surplus 37,384
needed
* Annual return assumed to be 12% on equity, inflation assumed to be 6%.

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Insurance portfolio

Insurance Existing Existing Suggestions Suggested


cover monthly monthly
premium premium
Life Insurance

Term Plan 1crore 958 No more cover 958


needed (existing)
Traditional plan - - - -
Ulip - - - -
Total 958 958
Health Insurance - - Buy a plan worth 1,450
RS. 6 lakh
Total - - - 1,450

Insurance cost - 2,500 - 2,458


*Premium are indicative and could vary

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D) Mr. Nikhil Agrawal (age 26 years)

Mr. Nikhil is a bachelor, who stays in Delhi with his parents. He brings the monthly salary of
Rs.90,000 and after household expenses of around Rs.20,000, insurance premium of Rs.20,897;
he left with the surplus of Rs.49,103. He has been living in his own house worth Rs.25Lakh. His
portfolio comprises of real estate, Rs.5Lakh in cash, gold worth Rs.10lakh, Rs.3Lakh in EPF, FD
worth Rs.20 lakh. His goals include saving for emergencies, wedding, buying a house and a car
and setup a venture.

Current Portfolio

Asset Current Value


Real Estate 25 Lakh
Cash 5 Lakh
Gold 10 lakh
Fixed deposit 20 lakh
Debt
EPF 3 Lakh
Total 63 Lakh
Liabilities Current Value
Loan Nil
Total Nil
Net Worth Rs.63 Lakh

Suggestion

 As the priority of Mr. Nikhil was to buy another house worth Rs. 50Lakh in a couple of
years, so I suggested him to do it in next six months by selling his current property i.e., of
worth RS. 25lakh and using it for down payment. For the remaining Rs.25lakh he can take
the loan and EMI will come to Rs.28,451 p.m., for next 12 years (assumed interest rate
9%). This can be sourced from the surplus. But e should make sure to take the constructed
house.
 For the emergency purpose, he can use cash which is kept aside and can be invested in ultra
short term investments.

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 For his next goal of marriage, he will require Rs. 35lakh in next 3 years. For which he can
use the amount of FD worth Rs.20 lakh, this will get matured in next two years, further he
can use gold of Rs.10lakh. And for the rest of the amount of Rs.5 lakh, he can invest
Rs.11,607 p.m. in SIP for next 3 years, which he can use from the surplus.
 For the life insurance Mr. Nikhil has a 1crore term plan and does not need any more cover.
As for his two traditional plans worth Rs.25lakh, I suggested him to surrender all and use
the part of a premium amount worth Rs.10,897 in investing for setting up his venture.
Besides these, he should pick an accident disability plan worth Rs.25lakh at Rs.334 a month
and a family health insurance plan at Rs.2890 p.m., which will cover upto Rs.10 lakh
 For his venture, Mr. Nikhil will require Rs. 20lakh after 5 years, for which he can start
investing Rs.24,500 in SIP, in diversified equity funds.
 For car, Mr. Nikhil has to wait, due to lack of surplus, till increase in his income.

Cash Flow

Existing Suggested
Income 90,000 90,000
Outflow
Household 20,000 20,000
Expenses
Insurance Premium 10,908 4,132
Monthly - 64,558
Investments
Total Outflow 30,908 85,789
Surplus 59.092 1,310

How to invest for goals

Goal Future cost/ time to Resources used Investment


achieve needed/month
House 50L/1 year Real estate 28,451
Emergency corpus 5lakh/1year Cash -
Marriage 35lakh/3 year Gold & FD 11,607
New Venture 20lakh/6.5 years - 24,500
Investible surplus 64,558
needed
* Annual return assumed to be 12% on equity, inflation assumed to be 6%.

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Insurance portfolio

Insurance Existing Existing Suggestions Suggested


cover monthly monthly
premium premium
Life Insurance

Term Plan 1crore 908 No more cover 908


needed (existing)
Traditional plan 28 lakh 10,000 Surrender -
Ulip - - - -
Total 10,908 908
Health Insurance - Buy a family HI 2890
- plan worth Rs.
10L
Critical illness & - - Buy Rs. 25lakh 334
accident disability accident
disability
Total - - - 3,224

Insurance cost - 10,908 - 4,132


*Premium are indicative and could vary

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3.2 Marketing Module

The Marketing module started with the sales of two Endowment Plans of HDFC Bank:
1. Sampoorna Samridhi Plus
2. Super Income
As said by our company guide ‘Sales of financial instruments is the first step to enter in to the
finance industry and learn the new aspects of investments’.
The purpose of this task was to find prospective customers through our own references and
increases the sales and generates the revenue for the company. And for the same purpose I have
met and contacted around 6 people, to whom I have explained both the policies, thoroughly. In the
given period, I was able to meet the demand of a single person, through whom I generated the
revenue of Rs.50k for my company.

Learning’s:

 Business is all about relationship: As we have generate leads through our own references
therefore it is very important that you have close relation with your known’s, so that at
least they would listen to you.

 Understanding the decision maker's motives is important: It is important to identify the


decision maker and understanding what motivates him, then only one would be able to got
succeed.

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5. CONCLUSION

The successful completion of this internship indicates that as I was engaged in the making of the
portfolio I have come to the following facts that most of the investors aren’t aware of the various
investment avenues available in the country. Of which most of the older investors mostly invest
in order to save tax and want to have an average growth rate of their investment and the main
concern of their investment is tax-saving and they majorly have an apprehension of the loss of
their principal amount as this is one of the major factors that they think about before investing is
that of safeguarding of the principal amount, so in order to save money in order to meet their and
family’s future expenses and to be prepared for the retirement. In short, they aren’t quite interested
in doing investment and somewhat interested in debt market instruments to get a risk- free return
out of their investment when needed.
On the contrary, the new investors i.e. the ones who are in the age group of 20-30 years are showing
immense interest in doing investment in various securities that can not only benefitted them for
tax saving purposes but can also proves to be a measure of wealth creation, can provide for their
future expenses and also facilitate long and short term goals which can vary individual to
individual.
These new investors also keep them aware about the various investment avenues in order to
generate wealth and attain high return by investing in these in these securities.

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6. ATTACHMENT
6.1 Questionnaire

Dear Respondent, this survey is carried to find the investment behavior of consumers and is for
Academics purpose only, all your disclosures will be kept confidential.

1. Name _____________
2. Gender
o Male
o Female
3. Age
o under 30
o 30-39
o 40-49
o 50-59
o 60 or above
4. Current annual family income (including pensions) before taxes:
o under 5 lakh
o 5 lakh – 10 lakh
o 11 lakh - 20 lakh
o 20 lakh - 30 lakh
o above 30 lakh
5. What percentage of income do you invest?
o 0% - 15%
o 15% - 30%
o 30% - 50%
6. When it comes to understanding your investments, how would you rate your knowledge?
o very limited knowledge
o basic knowledge (understand the differences between stocks , bonds , GIC's)
o fair amount of knowledge (aware of different investment options and there risks)
o considerable knowledge (understand different investment philosophies)
o extensive knowledge (complete understanding of investment products and strategies)

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7. Do you have a financial adviser?
o Yes
o No
8. Please tick the instruments you are aware of:
(a) Safe and low risk investment avenues
 Saving account
 Bank fixed deposits
 Public Provident Fund
 National Saving Certificate
 Post Office Savings
 Government Securities
b) Moderate risk investment avenues
 mutual funds
 Life Insurance
 Debentures
 Bonds
c) High risk investment avenues
 Equity share market
 Commodity market
 FOREX market
d) Traditional investment avenues
 Real Estate
 Gold/Silver
 Chit funds
9. In which sector do you prefer to invest your money?
o Private
o Government
o Public
o Foreign

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10. What are the important factors guiding your investment decisions?
o Return
o Safety of Principal
o Diversification
o Progressive values
o Maturity period
o Other ______________
11. What are your saving objectives?
o Children's education
o Retirement
o home purchase
o children's marriage
o healthcare
o Other _______________
12. What is the purpose behind investment?
o Wealth creation
o tax saving
o earn returns
o future expenses
o Other _______________
13. What is the time period you prefer to invest?
o Short term
o medium term
o long term
14. Which type of life insurance policy you prefer?
o Endowment plan
o Unit-Linked Insurance (ULIP)
o Term Plan

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15. Why you prefer the above mentioned?
o Security
o Interest rate
o Good returns
o Liquidity
o Other ______________
16. Which bank do you prefer for the above?
o HDFC Life
o LIC
o ICICI Prudential
o Shriram Fortune
o Other _______________
17. What influences you to select the above mentioned bank?
o Advertisements
o Personal experience (friends & relatives)
o Word of mouth
o Online promotion
18. Which bank you prefer for the mutual funds?
o SBI
o ICICI
o JP Morgan
o IDBI
o Other _______________
19. Why you prefer the above mentioned bank?
o Security
o Good returns
o Interest rates
o Liquidity
o Other ______________

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20. Do you invest your money in share market?
o Yes
o No
21. If stock market drops after you invest in it then what will you do?
o withdraw your money
o wait to increase
o invest more in it
22. Can you take the risk of losing your principal investment amount? (if yes, then please mention
the percentage)
o Yes ________
o No
o Maybe

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7. REFERENCES

 http://ourstockpick.com/indian-financial-services-industry/
 https://www.ibef.org/industry/financial-services-presentation
 https://economictimes.indiatimes.com/wealth/plan/5-golden-rules-of-financial-
planning/articleshow/50149594.cms
 www.karvy.com/sip-calculator
 www.iciciprulife.com/term-insurance-plans/iprotect-smart-term-insurance-calculator.html
 https://homeloans.sbi/calculators
 http://health.policybazaar.com/quotes?enquiryid=NjAzMzQwNDc&profileid=20654786&sifr
om=15&sito=15
 www.icicibank.com/calculator/car-loan-emi-calculator.page

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