PROJECT ON

“PORTFOLIO MANAGEMENT SERVICES”

MASTER OF BUSINESS ADMINISTRATION

(FINANCE SPECIALIZATION)

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR

AWARD OF MASTER OF BUSINESS ADMINISTRATION OF TILAK
MAHARASHTRA UNIVERSITY, PUNE.

SUBMITTED BY

[Link]

PRN NO: 07408015016

OF

KIRANDEVI SARAF INSTITUTE OF COMPLETE LEARNING

TILAK MAHARASHTRA UNIVERSITY

GULTEKDI, PUNE 411037

This is to Certify that the
project title
“Portfolio Management Service” Is a
bonafide work carried out by Ms.
Preeti .M . Ruparel a Student of Master
of Business Administration Semester 5th,
Specialization Finance, PRN. 07408015016
under Tilak Maharashtra University, in the
year 2010.

Head of the department Examiner Examiner

Internal External
 Date:

Place: University Seal

KIRANDEVI SARAF INSTITUE OF COMPLETE LEARNING

[Link], [Link] Hall, Malad West, Mumbai - 400064

CERTIFICATE OF INTERNAL GUIDE

This is to certify that the project titled (Portfolio Management

Services) is a bonafide work carried out by [Link] candidate

for the award of Master of Business Administration of Tilak Maharashtra

University, Pune under my guidance and direction.

Signature of Guide

Date: Name: Prof. Gurunath Pillai

Place: MUMBAI
Designation: Professor

Institute: KiranDevi Saraf

Institute of Complete Learning
 Acknowledgement

“Expression of feelings by words makes them less significant when it comes to make
statement of gratitude”

With regard to my Project on Portfolio Management Service, I would like to thank

each and every one who offered help, guidelines and support whenever required. I sincerely
express my thankfulness to Prof. Gurunath Pillai without whose guidance and inspiration to
conceptualize, this project would have not seen the light of the day. I express my deep sense of
gratitude to our college KiranDevi Saraf Institute of Complete Learning and my company
HSBC InvestDirect (India) Limited mentor Mr. Sanjay without whose support and cooperation
this project could not have been completed successfully.

Last, but not the least, my heartfelt love for my parents and my friends and also those people
about whom I cannot mention in acknowledgement, but my deep hearted thanks to these people
who gave me their important & valuable time and knowledge in successfully completion of my
project work, whose constant support and blessings kept me enthusiastic throughout this project.
 [Link]

INDEX

No Particulars

1 Rational for the study

2 Objective of the study

3 Profile of the company

4 About Portfolio Management Services -An Investment Option

5 Research Methodology

6 Data analysis & interpretation

7 Finding and Conclusion

8 Limitation of study

9 BIBLIOGRAPHY

10 Questionnaire
 1} RATIONAL OF STUDY

Investing in equities requires time, knowledge and constant monitoring of the market. For
those who need an expert to help to manage their investments, portfolio management
service(PMS) comes as an answer.

The business of portfolio management has never been an easy one. Juggling the limited
choices at hand with the twin requirements of adequate safety and sizeable returns is a task
fraught with complexities.

Given the unpredictable nature of the market it requires solid experience and strong
research to make the right decision. In the end it boils down to make the right move in the right
direction at the right time. That’s where the expert comes in.

So I select the “Portfolio Management Service”…which gives detail information about

PMS and the brokerage firm who operate it.
 2} OBJECTIVES OF THE STUDY

TITLE OF THE PROJECT:

“PORTFOLIO MANAGEMENT SERVICES”

OBJECTIVE OF THE STUDY:

Every study has its own purpose. It is very important to study all areas of the project so as to
plan n act in a well designed manner the main aim of our research to find out the aspects that is
hidden n not been discovered yet also to analyse review and rebalance of investment portfolio to
keep moving in the right direction with total peace of mind.

OBJECTIVES:

1. To know the concept of Portfolio Management.

2. To know about the schemes offered by the different insurance companies, new IPO’s,
Mutual Funds.
3. To know in depth about Insurance, Mutual Funds, Stock, Bonds etc.
4. To know about the awareness towards stock brokers and share market.
5. To study about the competitive position of HSBC IvestDirect in Competitive Market.
6. To study about the effectiveness & efficiency of HSBC IvestDirect in relation to its
competitors
7. To study about whether people are satisfied with HSBC IvestDirect Services &
Management System or not.
8. To study about the difficulties faced by persons while Trading in HSBC IvestDirect
9. To study about the need of improvement in existing Trading system.
Scope of the Study:

The study of the Portfolio Management Services is helpful in the following

areas.

 In today's complex financial environment, investors have unique needs which are
derived from their risk appetite and financial goals. But regardless of this, every investor
seeks to maximize his returns on investments without capital erosion. Portfolio
Management Services (PMS) recognize this, and manage the investments professionally
to achieve specific investment objectives, and not to forget, relieving the investors from
the day to day hassles which investment require.
 It is offers professional management of equity investment of the investor with an aim to
deliver consistent return with an eye on risk.
 Identify the key Stock in each portfolio.
 To look out for new prospective customers who are willing to invest in PMS.
 To find out the HSBC IvestDirect , PMS services effectiveness in the current situation.
 It also covers the scenario of the Investment Philosophy of a Fund Manager.
 3} PROFILE OF COMPANY

HSBC was established in 1865 (The Hong Kong and Shanghai Banking Corporation Ltd). Its
global headquarters is in London. It has offices in 86 countries and territories in Europe, the
Asia-Pacific region, the Americas, the Middle East and Africa, more than 295,000 employees
work worldwide for HSBC. In so many years of great service its has 100 million clients
worldwide. Its has comprehensive range of financial services also Global Banking and Markets,
Asset Management, Commercial Banking, Private Banking, Personal Financial Services. It is
listed in London, Hong Kong, New York, Paris and Bermuda stock exchanges.
HSBC has a Financial Strength of Aa2/P-1; AA-/A-1+ credit ratings*
 HSBC Global Asset Management - India

 Offers a comprehensive range of investment management solutions

 Funds Under Management of approx INR 39,099.95 Crores (US$ 8.31 Billion**) across
Mutual Funds and PMS offerings
 Around 144 people in 14 cities
 Good long-term performance
 More than 8,240 distributors
 Over 10,92,400 accounts across Mutual Funds and PMS
 One of the leading players in deregulation of Employee PF market – Employee
Provident Fund Mandate Presently being managed
 Currently manages assets of about INR 32,647.62 Crores including EPFO money
deployed till date as at 31 May 2010
 HSBC InvestDirect (India) Limited (HIL)

HSBC InvestDirect (India) Limited (HIL) is one of the India's leading financial services
organizations providing varied range of services through its subsidiaries to Individual and
Corporate customers. HIL is listed on the Bombay Stock Exchange Limited (BSE) and National
Stock Exchange Limited (NSE).
HSBC InvestDirect offers various services that include equity broking, wealth
management, IPO distribution and portfolio management services. HSBC InvestDirect has
around 240 offices in 80 cities around the country.

Online Stock Trading Platforms:

Online trading allows you to buy and sell shares on the exchange through Internet.
It is a truly powerful medium to be in direct control of your investments.

Freedom of information

The Internet can provide a new sense of control over your financial future. The amount of
investment information available online is truly astounding. It's one of the best aspects of
being a wired investor. For the first time in history, any individual with an Internet connection
can:

 Know the price of any stock at any time

 Review the price history of stock in chart format in the Smart Trade platform
 Follow market events in-depth
 Conduct extensive financial research on any company
Control of your Money

One of the great appeals of using an InvestDirect online account is the fact that the account
belongs to you, and is under your direct control. When you want to buy or sell stock, you no
longer need to call your broker on the phone; hope that he is in the office to place your order;
possibly argue with the broker about the order; and hope that the transaction is executed
instantly.

Access to the market

At the most basic level, an online trading account with InvestDirect gives you more agility in
buying and selling stocks. This is through sophisticated information streams, dedicated
trading platforms and sophisticated tools for accessing the markets.

Ensures the real time price for investors

We at InvestDirect specialize in the technique that offers the real time price for the buy and
sell orders of the investors and traders. Also due to the high level of transparency with regard
to display of information relating to the specific stocks and company profiles, you will be
able to get the real time quote for your orders.

Offers greater transparency

Online trading offers you greater transparency by providing you with an audit trail. This
involves a complete seamless process starting from order placement, to clearing and
settlement and finally ending with a credit into your depository account. All these stages are
subject to inspection, thus bringing in transparency into the system.

Enables hassle free trading

Online trading integrates your bank account, your trading account and your demat accounts,
which leads to easy and paperless trading for you.

Allow instant trade execution

You as an InvestDirect online customer will be able to execute the entire trading transaction,
right from logging on to our site, to the execution and settlement of your bank account, in a
Branch Trading

Atvery
HSBCshort period of time.
InvestDirect Securities (India) Limited, we are committed to make your trading
experience simple and hassle-free. Our relationship managers help you achieve your financial
Provides a level playing field
goals by providing a combination of advisory products and execution efficiency. 
Trading on the net, gives even the smallest retail investor access to information that earlier
With
wasusavailable
as your broker, youbig
only to the cantraders.
trade inThis
equities and derivatives
provides on leading
a level playing national
field for all investors in the
exchanges.
securitiesIn addition to that, our products are designed to suit your unique needs - they can
market.
be customized depending on your exposure and experience of trading. In short, we have a
Reduces the settlement
trading product risk
for you, irrespective of whether you're a beginner or an expert.
WeInalso understand
the case that no
of a demat trading
account is complete
your without
demat account the backing
is checked of before
by us strong executing
analysis and
your
advisory. Our advisory
sell transaction. This team prepares
reduces a gamut risk
the settlement of fundamental andwho
for the buyer, technical advisory
is assured of thereports
delivery
to of
facilitate your specific
the securities and fortrading
you as needs.
a seller of the securities.
Our dedicated team of relationship managers are continuously trained and equipped to
Live financial
facilitate news &decision
an informed Analysismaking for customers. We facilitate trading across our large
retail
As anetwork
client ofthrough our various
InvestDirect locations
online, you are in the country.
given free access to streaming news to give you the
latest financial information as it occurs.

Online
Online help desk Trade Online, Stock Market Trading, Trading Platform, Share
Trading
You can contact the tele trade desk anytime between 9 AM to 6 PM from Monday to Friday.
HSBC InvestDirect
Any questions youlive in an
might agewill
have where the power quickly
be addressed of internet
andhas created
your a world
trading of strategies
ideas and
convenience. Its time
can be discussed you
with chose online trading that allows you to place orders at your
them.
convenience without having to fill up lengthy forms.
Additional NRI Product Offerings
It understand that the customers needs are unique and hence make every possible effort to
Mutual Funds
provide them with products and services that they seek. True to their belief that Market
Mutual funds can offer the advantages of diversification and professional management. We offer you
opportunities
an often
opportunity to goinunrecognized
invest and of
a broad spectrum that they can
Mutual Fundshelp you
with spot
more them,
than 500 their advisory
schemes to choose
from to match your needs, goals and risk profile.  
services are also differentiated basis costomers trading profile.

IPO
As a part of wide range of offerings, NRIs can also invest in IPOs in India by applying
through any of our branches in India or by calling our customer service desk. Through our
trading website, you can receive regular updates on the IPO scenario, ongoing IPOs as well
as all the forthcoming IPOs at any given point of time.

Here's a look at a few benefits of our online trading platform:

Convenience - With online trading system, one can place orders from the comfort of their
Insurance 
We are a one stop shop for all Insurance & Retirement needs. We, as a composite insurance
broker, provide comprehensive risk management solutions. We offer both life insurance and
general insurance products for all insurance companies in India.

Instant order trade confirmations

Every trade is confirmed immediately and you will receive an on-screen confirmation
following every trade with full details for your records. This avoids costly errors that would
have been discovered when it is too late.

3-in-1 Proposition

The 3-in-1 proposition brings together your Bank, Demat and HSBC InvestDirect Trading
account for your convenience. As an HSBC InvestDirect online client you have the choice of
opening a bank account upto 5 different banks.
Keeps Your Information Secure

Why InvestDirect Online?

Your world of financial services and India's financial multiplex, HSBC InvestDirect Securities
(India) Limited* (HISL) is a premier financial service organization providing individuals and
corporate with customized financial management solutions.
We're here to tell you why you should be trading with HSBC InvestDirect (India) online. It's far
better to pick the right broker to begin with than to chop and change throughout your long and
fruitful investing life.

Compliance and Regulation - When dealing with HSBC InvestDirect

Securities (India) Limited, you are dealing in fully regulated and reliable
environment. We are subject to stringent financial reporting and specific
regulations regarding client treatment.

Transparency - HSBC InvestDirect Securities (India) Limited is a

leading direct access broker-dealer committed to giving you the trading
tools and services necessary to help you "own the trade."

Innovative - Continually enhancing our features, products, partnerships

and alliances, HSBC InvestDirect Securities (India) Limited strives to
give you the best opportunities while keeping you ahead in a changing
marketplace.

All in one - Whether you're looking for a brokerage specializing in

derivatives, capital markets, Mutual funds, IPO's, we understand you
have unique requirements and we tailor our products and services to meet
them.

Service oriented - Our goal is to provide a superior level of service to

you that will support a long-term relationship - and enable us to respond
more efficiently and proactively to your changing needs.

What HSBC InvestDirect (India) offers?

Accessibility- With an HSBC InvestDirect (India) online trading account, you can buy and sell
shares in an instant! Anytime you like and from anywhere you like!

Choice - You can choose the online trading account that suits your trading habits and
preferences - the SmartInvest account for serious investors and SmartTrade for active day
traders. Both these accounts holders can use the tele trading facility.
Flexibility-HSBC InvestDirect Securities (India) Limited constantly strives to offer the
capability to trade in a manner that meets each customer's needs.

You can be assured that you have in fact placed an order at the price you always wanted
to, but may not have been able to do so till now. Thereby giving you control over your own
trades.

How do you like to trade? HSBC InvestDirect Securities (India) Limited offers a number of
different ways to place orders.

Trading Online
Access the HSBC InvestDirect Securities (India) Limited website 24 hours a day. HISL offers
SmartInvest for the Serious Investor and Smart Trade for the Active Trader. Use the platforms
to:

 Place market, limit, and stop or stop limit orders.

 Buy or sell stocks or derivatives.
 Check your balance, Positions, order status or transaction history.
 Retrieve quotes and do research.
 Real time charting facility available on the SmartTrade product.

Trading using the "TeleTrade" facility.

Telephone trades are convenient, economical and hassle-free.

HSBC InvestDirect offers 3 different online trading platforms to their customers:

1. SmartSTART
 SmartStart is a powerful browser based Trading platform for beginners. SmartStart
trading platform allows their investor to flexibility of trading on both the NSE & BSE
via a single screen.

Features:

 Trade on NSE & BSE

 Simple order entry for Equity & Derivatives
 Fully Customizable display
 User friendly Get Quote screen
 Seamless 3-in-1 proposition
 Live order status
 Track your orders real-time
  Dynamic buying power
 Works behind a Proxy
 Back office access

[Link]

SmartInvest is a browser-based trading platform for customers who transact

occasionally. It is ideal for investors who believe in the Buy and Hold approach towards
investment in equities. It gives the benefit of real-time streaming data with the flexibility
of trading on any Internet capable system.

Features:
  Instant access to account with no wait time

 Works behind a Proxy

 Live Streaming quotes

 Multiple Watch lists

 NSE & BSE Access

 Single order form for Cash and FnO

 Point and Click order entry

 Hot Key Functions

 Back Office access

3. SmartTRADE

SmartTrade is an EXE based desktop software designed for active traders who transact
frequently to capture short-term price movements. This platform gives more personalized
investment options to the investors. Following are few popular features of SmartTrade account
 Features:

 Fully Customizable display

 Dynamic Charts with Indicators
 EOD Charts
 Real-Time market data
 Advanced Alert capabilities
 Live order status
 Track your orders real-time
 Real time position updates
 Dynamic buying power
 Message window docking

How to open account with HSBC InvestDirect?

For online trading with HSBC InvestDirect, investor has to open an account. Following are the
ways to open an account with HSBC InvestDirect.
  Call them at phone number provided below and ask that you want to open an account
with them.
Toll Free No.: 1800-209-4477 or 1800-22-4477
Other No: 022 - 30637777
 Visit one of their nearest branches.
[Link]
webapp/Home/AboutUs/[Link]?reqCode=getLocations
 You can send them an Email on info customerservice@[Link] to know about their
products and services

Document required to open HSBC InvestDirect Trading Account

For opening a account an Investors require following documents:

 Photograph - Two recent passport size

 Proof of Bank Account (Copy of Bank Statement / Copy of first page of the Bank Pass
Book / A cancelled cheque)
 Proof of Address (Passport, Driver's License, Ration Card, Voter's Identity card,
Telephone bill, and Electricity bill, Bank Passbook / Bank Statement or Rent
Agreement)
 Proof of Identity (PAN Card)

4} PORTFOLIO MANAGEMENT SERVICES

 Portfolio (finance) means a collection of investments held by an institution or a private
individual. Holding a portfolio is often part of an investment and risk-limiting strategy called
diversification. By owning several assets, certain types of risk (in particular specific risk) can be
reduced. There are also portfolios which are aimed at taking high risks – these are called
concentrated portfolios.

Investment management is the professional management of various securities (shares,

bonds etc) and other assets (e.g. real estate), to meet specified investment goals for the benefit
of the investors. Investors may be institutions (insurance companies, pension funds,
corporations etc.) or private investors (both directly via investment contracts and more
commonly via collective investment schemes e.g. mutual funds).
 The term asset management is often used to refer to the investment management of
collective investments, whilst the more generic fund management may refer to all forms of
institutional investment as well as investment management for private investors. Investment
managers who specialize in advisory or discretionary management on behalf of (normally
wealthy) private investors may often refer to their services as wealth management or portfolio
management often within the context of so-called "private banking".

The provision of 'investment management services' includes elements of financial

analysis, asset selection, stock selection, plan implementation and ongoing monitoring of
investments. Outside of the financial industry, the term "investment management" is often
applied to investments other than financial instruments. Investments are often meant to include
projects, brands, patents and many things other than stocks and bonds. Even in this case, the
term implies that rigorous financial and economic analysis methods are used.

Service overview
Individually Managed Portfolios
Each client portfolio can be customized* based on the following parameters:
 Any stocks and /or sector that he would not like to invest in
 Tailor-made investment strategies based on
 Risk Profile
 Liquidity
 Ability to take focused positions on individual stocks and sectors
- Transparent Detailed holding and transaction statements
 Service overview
Customized service for sophisticated investors
Ability to take over an existing stock portfolio based on a scientific approach
 Stock level:
 Consolidate the portfolio to a manageable level of 25 - 35 stocks
 Sell based on fundamental weakness / relative valuations
 Hold based on company specific fundamentals
 Buy new stocks which in the opinion of the Fund Manager may offer a
better risk-reward ratio
 Improve portfolio balance across sectors
Enhance weight age on under-represented sectors which in the opinion of the Fund Manager
may offer value

Investment Objective & Philosophy

“Fundamentals, not fashions”

 Emphasis on Primary research

 Focus on capital appreciation and wealth creation
-Use the long term power of compounding
 Focus on fundamental characteristics
 Sustainability of Business
 Quality of Management
 Value of business

 Limited Churning
Investment process
Institutionalized fund management approach: leverages global HSBC resources
 The Investment Management Committee exercises broad oversight on the process
 Morning meetings
-Discuss events and market outlook
 Weekly strategy meetings
-Discuss portfolio /sectoral strategy
-Compare and share research notes
 Monthly global equity forums
- Share and discuss global macro views
 Investment Management Committee meets monthly
-Compliance, risk and business views also taken into account to ensure a seamless customer
experience
HSBC Alpha Account Signature Portfolio

 Focus on companies which in the opinion of the portfolio manager have the capacity to
offer sustainable long-term business growth and are available at a discount to their
intrinsic value
 Managed with the objective of generating absolute & consistent performance from a
well-diversified portfolio
 A flexi-cap portfolio
 Max. Single Stock exposure of 15%
 Max. Single Sector exposure of 30%
HSBC Alpha Account Strategic Portfolio
 Focus on stocks that in the opinion of the Portfolio manager are mis-valued as they are
currently in an unusual situation resulting in a significant price-value mismatch
 Aims to deliver better returns over the long-term
 A flexi-cap portfolio; Max. Single Stock exposure of 20%, Max. Single Sector exposure
of 30%
 Few (historical) examples of unusual situations
 Turnaround or M&A
-Tata Motors
 Early Cycle
-Balrampur Chini
 Concept Business
-Financial Technology/ Pantaloon
 Mount Everest
 Value Investing
-Bombay Dyeing
 Ignored Idea
-Sterlite
HSBC Large Cap Oriented Portfolio

 The Portfolio aims to generate capital appreciation from investments in predominantly

large and established companies which in the opinion of the portfolio manager have a
proven track record and possess significant return potential
 The composition will be 70-100% in large cap stocks
 Mid-Caps (larger ones) 0-30% allocation
 Max. Single Stock exposure of 15%
 Max. Single Sector exposure of 25%
Need of PMS
As the PMS gives investors periodically review their asset allocation across different
assets as the portfolio can get skewed over a period of time. This can be largely due to
appreciation / depreciation in the value of the investments.
As the financial goals are diverse, the investment choices also need to be different to
meet those needs. No single investment is likely to meet all the needs, so one should keep some
money in bank deposits and / liquid funds to meet any urgent need for cash and keep the
balance in other investment products/ schemes that would maximize the return and minimize the
risk. Investment allocation can also change depending on one’s risk-return profile.

Objective of PMS:
There are the following objectives which full filled by Portfolio Management
Services.
1. Safety Of Fund: -
The investment should be preserved, not be lost, and should remain in the
returnable position in cash or kind.

2. Marketability: -
The investment made in securities should be marketable that means, the
securities must be listed and traded in stock exchange so as to avoid difficulty in their
encashment.

3. Liquidity: -
The portfolio must consist of such securities, which could be en-cashed without
any difficulty or involvement of time to meet urgent need for funds. Marketability ensures
liquidity to the portfolio.
 4. Reasonable return: -
The investment should earn a reasonable return to upkeep the declining value of
money and be compatible with opportunity cost of the money in terms of current income in the
form of interest or dividend.

5. Appreciation in Capital: -
The money invested in portfolio should grow and result into capital gains.

6. Tax planning: -
Efficient portfolio management is concerned with composite tax planning
covering income tax, capital gain tax, wealth tax and gift tax.

7. Minimize risk: -
Risk avoidance and minimization of risk are important objective of portfolio
management. Portfolio managers achieve these objectives by effective investment planning and
periodical review of market, situation and economic environment affecting the financial market.

PORTFOLIO CONSTRUCTION:

The Portfolio Construction of Rational investors wish to maximize the returns on

their funds for a given level of risk. All investments possess varying degrees of risk. Returns
come in the form of income, such as interest or dividends, or through growth in capital values
(i.e. capital gains).

The portfolio construction process can be broadly characterized as comprising the following
steps:
1. Setting objectives.
The first step in building a portfolio is to determine the main objectives of the fund
given the constraints (i.e. tax and liquidity requirements) that may apply. Each investor has
different objectives, time horizons and attitude towards risk. Pension funds have long-term
obligations and, as a result, invest for the long term.
 Their objective may be to maximize total returns in excess of the inflation rate. A charity
might wish to generate the highest level of income whilst maintaining the value of its capital
received from bequests. An individual may have certain liabilities and wish to match them at a
future date. Assessing a client’s risk tolerance can be difficult. The concepts of efficient
portfolios and diversification must also be considered when setting up the investment
objectives.

2. Defining Policy.
Once the objectives have been set, a suitable investment policy must be established.
The standard procedure is for the money manager to ask clients to select their preferred mix of
assets, for example equities and bonds, to provide an idea of the normal mix desired. Clients are
then asked to specify limits or maximum and minimum amounts they will allow to be invested
in the different assets available.
The main asset classes are cash, equities, gilts/bonds and other debt instruments,
derivatives, property and overseas assets. Alternative investments, such as private equity, are
also growing in popularity, and will be discussed in a later chapter. Attaining the optimal asset
mix over time is one of the key factors of successful investing.

3. Applying portfolio strategy.

At either end of the portfolio management spectrum of strategies are active and
passive strategies. An active strategy involves predicting trends and changing expectations
about the likely future performance of the various asset classes and actively dealing in and out
of investments to seek a better performance. For example, if the manager expects interest rates
to rise, bond prices are likely to fall and so bonds should be sold, unless this expectation is
already factored into bond prices. At this stage, the active fund manager should also determine
the style of the portfolio. For example, will the fund invest primarily in companies with large
market capitalizations, in shares of companies expected to generate high growth rates, or in
companies whose valuations are low? A passive strategy usually involves buying securities to
match a preselected market index. Alternatively, a portfolio can be set up to match the
investor’s choice of tailor-made index.
Passive strategies rely on diversification to reduce risk. Outperformance versus the chosen index
is not expected. This strategy requires minimum input from the portfolio manager. In practice,
many active funds are managed somewhere between the active and passive extremes, the core
holdings of the fund being passively managed and the balance being actively managed.

4. Asset selections.
Once the strategy is decided, the fund manager must select individual assets in
which to invest. Usually a systematic procedure known as an investment process is established,
which sets guidelines or criteria for asset selection.
Active strategies require that the fund managers apply analytical skills and judgment for asset
selection in order to identify undervalued assets and to try to generate superior performance.

5. Performance assessments
In order to assess the success of the fund manager, the performance of the fund is
periodically measured against a pre-agreed benchmark – perhaps a suitable stock exchange
index or against a group of similar portfolios (peer group comparison). The portfolio
construction process is continuously iterative, reflecting changes internally and externally. For
example, expected movements in exchange rates may make overseas investment more
attractive, leading to changes in asset allocation. Or, if many large-scale investors
simultaneously decide to switch from passive to more active strategies, pressure will be put on
the fund managers to offer more active funds. Poor performance of a fund may lead to
modifications in individual asset holdings or, as an extreme measure; the manager of the fund
may be changed altogether.
Steps to Stock Selection Process:

Types of assets:

1. Cash and cash instruments:

Cash can be invested over any desired period, to generate interest income, in a range
of highly liquid or easily redeemable instruments, from simple bank deposits, negotiable
certificates of deposits, commercial paper (short term corporate debt) and Treasury bills (short
term government debt) to money market funds, which actively manage cash resources across a
range of domestic and foreign markets.

2. Bonds:

Bonds are debt instruments on which the issuer (the borrower) agrees to make interest
payments at periodic intervals over the life of the bond – this can be for two to thirty years or,
sometimes, in perpetuity. Interest payments can be fixed or variable, the latter being linked to
prevailing levels of interest rates.
The bond markets are highly liquid, with many issuers of similar standing, including
governments (sovereigns) and state-guaranteed organizations. Corporate bonds are bonds that
are issued by companies. To assist investors and to help in the efficient pricing of bond issues,
many bond issues are given ratings by specialist agencies such as Standard & Poor’s and
Moody’s.
1. Equities:
Equity consists of shares in a company representing the capital originally provided
by shareholders. An ordinary shareholder owns a proportional share of the company and an
ordinary share carries the residual risk and rewards after all liabilities and costs have been paid.
Ordinary shares carry the right to receive income in the form of dividends (once declared out of
distributable profits) and any residual claim on the company’s assets once its liabilities have
been paid in full. Preference shares are another type of share capital. They differ from ordinary
shares in that the dividend on a preference share is usually fixed at some amount and does not
change.

2. Derivatives:
Derivative instruments are financial assets that are derived from existing primary
assets as opposed to being issued by a company or government entity. The two most popular
derivatives are futures and options.
A futures contract is an agreement in the form of a standardized contract between
two counterparties to exchange an asset at a fixed price and date in the future. The underlying
asset of the futures contract can be a commodity or a financial security.
An option contract is an agreement that gives the owner the right, but not
obligation, to buy or sell (depending on the type of option) a certain asset for a specified period
of time. A call option gives the holder the right to buy the asset. A put option gives the holder
the right to sell the asset. European options can be exercised only on the options’ expiry date.
US options can be exercised at any time before the contract’s maturity date.
 3. Property:
Property investment can be made either directly by buying properties, or indirectly by
buying shares in listed property companies. Only major institutional investors with long-term
time horizons and no liquidity pressures tend to make direct property investments.

Risk and Risk Aversion:

Portfolio theory also assumes that investors are basically risk averse, meaning that, given
a choice between two assets with equal rates of return they will select the asset with lower level
of risk. For example, they purchased various type of insurance including life insurance, Health
insurance and car insurance. The Combination of risk preference and risk aversion can be
explained by an attitude toward risk that depends on the amount of money involved. A
discussion of portfolio or fund management must include some thought given to the concept of
risk. Any portfolio that is being developed will have certain risk constraints specified in the
fund rules, very often to cater to a particular segment of investor who possesses a particular
level of risk appetite. It is, therefore, important to spend some time discussing the basic theories
of quantifying the level of risk in an investment, and to attempt to explain the way in which
market values of investments are determined.

Definition of Risk
Although there is a difference in the specific definitions of risk and uncertainty, for our
purpose and in most financial literature the two terms are used interchangeably. In fact, one way
to define risk is the uncertainty of future outcomes. An alternative definition might be the
probability of an adverse outcome.
Composite risks involve the different risk as explained below:-

i. Interest rate risk:

It occurs due to variability cause in return by changes in level of interest rate. In
long runs all interest rate move up or downwards. These changes affect the value of security.
RBI, in India, is the monitoring authority which effect the change in interest rate. Any upward
revision in interest rate affects fixed income security, which carry old lower rate of interest and
thus declining market value. Thus it establishes an inverse relationship in the prize of security.

TYPES RISK EXTENT

Cash equivalent Less vulnerable to interest rate risk

Long term Bond More vulnerable to interest rate risk.

ii. Purchasing power risk:

It is known as inflation risk also. This risk emanates from the very fact that
inflation affects the purchasing power adversely. Purchasing power risk is more in inflationary
times in bonds and fixed income securities. It is desirable to invest in such securities during
deflationary period or a period of decelerating inflation. Purchasing power risk is less in flexible
income securities like equity shares or common stuffs where rise in dividend income offset
increase in the rate of inflation and provide advantage of capital gains.

iii. Business risk:

Business risk emanates from sale and purchase of securities affected by business
cycles, technological change etc. Business cycle affects all the type of securities viz. there is
cheerful movement in boom due to bullish trend in stock prizes where as bearish trend in
depression brings downfall in the prizes of all types of securities. Flexible income securities are
nearly affected than fix rate securities during depression due to decline n the market prize.
iv. Financial risk:

Financial risk emanates from the changes in the capital structure of the company.
It is also known as leveraged risk and expressed in term of debt equity ratio. Excess of debts
against equity in the capital structure indicates the company to be highly geared or highly
levered.
Although leveraged company’s earnings per share (EPS) are more but dependence
on borrowing exposes it to the risk of winding up. For, its inability to the honor its
commitments towards the creditors are most important.

Here it is imperative to express the relationship between risk and return, which is
depicted graphically below,

Maximize returns, minimize risks:

RISK VERSUS RETURN:

Risk versus return is the reason why investors invest in portfolios. The ideal goal in
portfolio management is to create an optimal portfolio derived from the best risk–return
opportunities available given a particular set of risk constraints. To be able to make decisions, it
must be possible to quantify the degree of risk in a particular opportunity. The most common
method is to use the standard deviation of the expected returns. This method measures spreads,
and it is the possible returns of these spreads that provide the measure of risk. The presence of
risk means that more than one outcome is possible. An investment is expected to produce
different returns depending on the set of circumstances that prevail.

For example, given the following for Investment A:

Circumstance Return(x) Probability(p)

I 10% 0.2

II 12% 0.3

III 15% 0.4

IV 19% 0.1

It is possible to calculate:

1. The expected (or average) return

Mean (average) = x = expected value (EV) = Σpx
Circumstance Return(x) % Probability(P Px
)

1 10 0.2 2.0

2 12 0.3 3.6

3 15 0.4 6.0

4 19 0.1 1.9

Expected Return (Σpx) = 13.5%

2. The Standard deviation
Standard deviation =σ=√ Σp(x- x) 2
Also Variance (VAR) is equal to the standard deviation squared or σ2
Circumstanc Return(x) Probability(P Deviation p (x
e % ) from -x)2

expected Return
(x -x)- %

1 10 0.2 -3.5 2.45

2 12 0.3 -1.5 0.68

3 15 0.4 +1.5 1.90

4 19 0.1 +5.5 3.03

VARAIANCE= 7.06

Standard deviation (σ) = √Variance

= √ 7.06

= 2.66%
The standard deviation is a measure of risk, whereby the greater the standard deviation,
the greater the spread, and the greater the spread, the greater the risk.

If the above exercise were to be performed using another investment that offered the same
expected return, but a different standard deviation, then the following result might occur:

If the above exercise were to be performed using another investment that offered the same
expected return, but a different standard deviation, then the following result might occur:
 Plan Expected Return Risk(standard
deviation)

Investment A 9% 2.5%

Investment B 9% 4.0%

Since both investments have the same expected return, the best selection of investment
would be Investment A, which provides the lower risk. Similarly, if there are two investments
presenting the same risk, but one has a higher return than the other, that investment would be
chosen over the investment with the lower return for the same risk. In the real world, there are
all types of investors. Some investors are completely risk averse and others are willing to take
some risk, but expect a higher return for that risk. Different investors will also have different
tolerances or threshold levels for risk–return trade-offs – i.e. for a given level of risk, one
investor may demand a higher rate of return than another investor.

INDIFFERNCE CURVE:
Plan Expected Return Risk(standard
deviation)

Investment A 10% 5%

Investment B 20% 10%

The question to ask here is, does the extra 10% return compensate for the extra risk?
There is no right answer, as the decision would depend on the particular investor’s attitude to
risk.
A particular investor’s indifference curve can be ascertained by plotting what rate of return the
investor would require for each level of risk to be indifferent amongst all of the investments.
For example, there may be an investor who can obtain a return of 50% with zero risk and a
return of 55 %with a risk or standard deviation of 5% who will be indifferent between the two
[Link] further investments were considered, each with a higher degree of risk, the
investor would require still higher returns to make all of the investments equally attractive. The
investor being discussed could present the following as the indifference curve shown in Figure.

Expected return % Risk %

50 0

55 5

70 10

100 15

120 18

230 25

Indifference Curve
Utility scores:

At this stage the concept of utility scores can be introduced. These can be seen as a
way of ranking competing portfolios based on the expected return and risk of those portfolios.
Thus if a fund manager had to determine which investment a particular investor would prefer,
i.e. Investment A equaling a return of 10% for a risk of 5% or Investment B equaling a return of
20% for a risk of 10%, the manager would create indifference curves for that particular investor
and look at the utility scores. Higher utility scores are assigned to portfolios or investments with
more attractive risk–return profiles. Although several scoring systems are legitimate, one
function that is commonly employed assigns a portfolio or investment with expected return or
value EV and variance of returns σ 2the following utility value:
U = EV –.005Aσ2 where:
U = utility value
A= an index of the investor’s aversion, (the factor of .005 is a scaling convention that allows
expression of the expected return and standard deviation in the equation as a percentage rather
than a decimal).

Utility is enhanced by high expected returns and diminished by high risk. Investors
choosing amongst competing investment portfolios will select the one providing the highest
utility value. Thus, in the example above, the investor will select the investment (portfolio) with
the higher utility value of 18.

Expected Return Risk(standard Utility=EV-.005Aσ2

deviation)

10% 5% 10 –.005 *4 * 25 =
9.5

20% 10% 20 –.005 * 4 *100 =

18
 (Assume A= 4 in this case)

Portfolio Diversification:
There are several different factors that cause risk or lead to variability in returns on an
individual investment. Factors that may influence risk in any given investment vehicle include
uncertainty of income, interest rates, inflation, exchange rates, tax rates, the state of the
economy, default risk and liquidity risk (the risk of not being able to sell on the investment). In
addition, an investor will assess the risk of a given investment (portfolio) within the context of
other types of investments that may already be owned, i.e. stakes in pension funds, life
insurance policies with savings components, and property.

One way to control portfolio risk is via diversification, whereby investments are made
in a wide variety of assets so that the exposure to the risk of any particular security is limited.
This concept is based on the old adage ‘do not put all your eggs in one basket’. If an investor
owns shares in only one company, that investment will fluctuate depending on the factors
influencing that company. If that company goes bankrupt, the investor might lose 100 per cent
of the investment. If, however, the investor owns shares in several companies in different
sectors, then the likelihood of all of those companies going bankrupt simultaneously is greatly
diminished.

Thus, diversification reduces risk. Although bankruptcy risk has been considered here,
the same principle applies to other forms of risk.

TECHNIQUES OF PORTFOLIO MANAGEMENT:

Various types of portfolio require different techniques to be adopted to achieve the

desired objectives. Some of the techniques followed in India by portfolio managers are
summarized below.
(1). Equity portfolio: -Equity portfolio is affected by internal and external factors:

(a) Internal factors –Pertain to the inner working of the particular company of which
equity shares are held.

These factors generally include:

(1) Market value of shares
(2) Book value of shares
(3) Price earnings ratio (P/E ratio)
(4) Dividend payout ratio

(b) External factors –

(1) Government policies

(2) Norms prescribed by institutions
(3) Business environment
(4) Trade cycles

(2). Equity stock analysis – The basic objective behind the analysis is to determine the
probable future-value of the shares of the concerned company. It is carried out primarily fewer
than two ways.

(a) Earnings per share

(b) Price earnings ratio

(A) Trend of earning: -

  A higher price-earnings ratio discount expected profit growth. Conversely, a
downward trend in earning results in a low price-earnings ratio to discount
anticipated decrease in profits, price and dividend. Rising EPS causes appreciation in
price of shares, which benefits investors in lower tax brackets? Such investors have
not pay tax or to give lower rate tax on capital gains.

 Many institutional investor like stability and growth and support high EPS.
 Growth of EPS is diluted when a company finances internally its expansion program
and offers new stock.

 EPS increase rapidly and result in higher P/E ratio when a company finances its
expansion program from internal sources and borrowings without offering new
stock.

(B) Quality of reported earning:

Quality of reported earnings affects P/E ratio. The factors that affect the quality of
reported earnings are as under:

 Depreciation allowances: -

Larger (Non Cash) deduction for depreciation provides more funds to company to
finance profitable expansion schemes internally. This builds up future earning power of
company.

 Research and development outlets : -

There is higher P/E ratio for a company, which carries R&D programs. R&D
enhances profit earning strength of the company through increased future sales.
  Inventory and other non-recurring type of profit : -

Low cost inventory may be sold at higher price due to inflationary conditions among
profit but such profit may not always occur and hence low P/E ratio.

(C) Dividend policy:

Dividend policy is significant in affecting P/E ratio. With higher dividend ratio,
equity price goes up and thus raises P/E ratio. Dividend rates are raised to push in share prices
up. Dividend cover is calculated to find out the time the dividend is protected, In terms of
earnings. It is calculated as under:

Dividend Cover = EPS / Dividend per Share

(D) Investors demand - Demand from institutional investors for equity also enhances the P/E
ratio.

(3) Quality of management - Investors decide about the ability and caliber of management and
hold and dispose of equity academy. P/E ratio is more where a company is managed by reputed
entrepreneurs with good past records of management performance.

Types of Portfolios:

The different types of Portfolio which is carried by any Fund Manager to maximize
profit and minimize losses are different as per their objectives .They are as follows,

Aggressive Portfolio:
Objective: Growth. This strategy might be appropriate for investors who seek High growth and
who can tolerate wide fluctuations in market values, over the short term.

AGGRESSIVE PORTFOLIO

STOCKS BONDS
15%

85%

Growth Portfolio:
Objective: Growth. This strategy might be appropriate for investors who have a preference for
growth and who can withstand significant fluctuations in market value.
 GROWTH PORTFOLIO
STOCK BONDS SHORT TERM

5%
25%

70%

Balanced Portfolio:
Objective: Capital appreciation and income. This strategy might be appropriate for investors
who want the potential for capital appreciation and some growth, and who can withstand
moderate fluctuations in market values.

BALANCED PORTFOLIO
10%
STOCKS BONDS SHORT TERM

50%

40%

Conservative Portfolio:

Objective: Income and capital appreciation. This strategy may be appropriate for investors who
want to preserve their capital and minimize fluctuations in market value.
CONSERVATIVE PORTFOLIO
STOCKS BONDS SHORT TERM

20%
30%

50%
 5} RESEARCH METHODOLOGY

RESEARCH DESISGN OF THE STUDY:

This report is based on primary as well secondary data, however primary data
collection was given more importance since it is overhearing factor in attitude studies. One of
the most important users of research methodology is that it helps in identifying the problem,
collecting, analyzing the required information data and providing an alternative solution to the
problem .It also helps in collecting the vital information that is required by the top management
to assist them for the better decision making both day to day decision and critical ones.

The study consists of analysis about Investors Perception about the Portfolio Management
Services offered by HSBC InvestDirect (India) Limited. For the purpose of the study 100
customers were picked
up at random and their views solicited on different parameters.

The methodology adopted includes

➢ Questionnaire
➢ Random sample survey of customers
➢ Discussions with the concerned

SOURCES OF DATA

 Primary data: Questionnaire

 Secondary data: Published materials of HSBC InvestDirect (India) Limited. Such as
periodicals, journals, news papers, and website
SAMPLING PLAN
Since HSBC InvestDirect (India) Limited has many segments I selected Portfolio
Management Services (PMS) segment as per my profile to do market research. 100% coverage
was difficult within the limited period of time. Hence sampling survey method was adopted for
the purpose of the study.

 Population:
(Universe) customers & non consumers of HSBC InvestDirect (India) Limited

 Sampling size:
A sample of hundred was chosen for the purpose of the study. Sample consisted of
Investor as based on their Income and Profession as well as Educational Background.

 Sampling Methods:
Probability sampling requires complete knowledge about all sampling units in the
universe.
Due to time constraint non-probability sampling was chosen for the study.

 Sampling procedure:
From large number of customers & non consumers sample lot were randomly picked up by me.

Field Study:
Directly approached respondents by the following strategies
 Tele-calling
 Personal Visits
 Clients References
 Promotional Activities
 Database provided by the HSBC InvestDirect (India) Limited.
 6} DATA ANALYSIS AND INTERPRETATION

 Do you know about the Investment Option available?

Knowledge of Investors

knows don’t knows

15%

85%

Interpretation:
As the above graph shows the knowledge of Investor out of 100 respondent carried
is only 85%. The remaining 15% take his/her residential property as an investment. According
to law purpose this is not an investment because of it is not create any profit for the owner. The
main problem is that in this time from year 2008-2010 , the recession and the Inflation make the
investor think before investing a even a Rs. [Link] , it also create the problem for the Investor
to not take interest in Investment option.
  What is the basic purpose of your Investments?

Purpose of your Investments

25%

Interested in liquidity, returns and

tax benefits

Interested in capital
appreciations, risk covering, and
others
75%

Interpretation
As with the above analysis, it is found 75% people are interested in liquidity, returns and
tax benefits. And remaining 25% are interested in capital appreciations, risk covering, and
others. In the entire respondent it is common that this time everyone is looking for minimizing
the risk and maximizing their profit with the short time of period.
As explaining them About the Portfolio Management Services of HSBC InvestDirect,
they were quite interested in Protech Services.

 From which option you will get the best returns?

Interpretation:
Most of the respondents say they will get more returns in Share Market. Since Share
Market is said to be the best place to invest to get more returns. The risk in the investment is
also high.
Similarly, the Investor are more Interested in Investing their money in Mutual Fund
Schemes as that is also very important financial product due to its nature of minimizing risk and
maximizing the profit. As the commodities market is doing well, so Investors are also prefer to
invest their money in Commodities Market basically in GOLD nowadays.
 Moreover, even who don’t want to take Risk they are looking for investing in Fixed Deposit
for long period of time.

 “Investing in PMS is far safer than Investing in Mutual Fund”. Do you agree?

PMS is far safer than Investing in Mutual Fund

yes no
24%

76%

Interpretation
In the above graphs it’s clear that 24% of respondent out of hundred feel that investing their
money in Mutual Fund Scheme are far safer than Investing in PMS.
This is because of lack of proper information about the Portfolio management services. As
the basis is same for the mutual fund and PMS but the investment pattern is totally different
from each other and which depends upon different risk factor available in both the Financial
Products.

 How much you carry the expectation in Rise of your Income from Investments?

Interpretation
The optimism is shown in the attitude of the respondents. The confidence was
appreciable with which they are looking forward to a rise in their investments.
Major part of the sample feels that the rise would be of around 15%. Only 8% of the
respondents were confident enough to expect a rise of upto 35%.
 As all the respondents were considering the Risk factor also before filling the
questionnaire and they were asking about the performance report of all the PMS services
offered by HSBC InvestDirect.

 If you invested in Share Market, what has been your experience?

Interpretation
20% of the respondents have invested in Share market and received satisfactory
returns, 40% of the respondents have not at all invested in Share Market. Some of the investors
face problems due to less knowledge about the market. Some of the respondents don’t have
complete overview of the happenings and invest their money in wrong shares which result in
Loss. This is the reason most of the respondents prefer Portfolio Management Services to trade
now a days, which gives the Investor the clear idea when is the right time to buy and right time
to sell the shares which is recommended by their Fund Manger.

 How do you trade in Share Market?

Interpretation
As we know that Share market is totally based on psychological parameters of
Investors, which changed as per the market condition, but at the same time the around 45%
investor trade on the basis of speculation and 31% depend upon Investment option Bonds,
Mutual Funds etc.
Moreover, the now a day’s Hedging is most common derivatives tools which is used
by the Investor to get more return from the Market ,this is mostly used in the Commodities
Market.
  How do you manage your Portfolio?

MGMT OF PORTFOLIO
INVESTOR THEMSELVES BY COMPANY

43%
57%

Interpretation

About 57% of the respondents say they themselves manage their portfolio and 43% of
the respondents say they depends on the security company for portfolio Management. 43% of
the respondents prefer PMS of the company because they don’t have to keep a close eye on their
investment; they get all the information time to time from their Fund Manager.

 Are you using Portfolio Management services (PMS) of HSBC InvestDirect?

Interpretation
As talking about the Investment option, in most of clients it was common that they
know about the Option but as the PMS of HSBC InvestDirect have different Product offering,
Product Characteristics and the Investment amount is also different this makes the clients to
think differently.
It is found that 56% of HSBC InvestDirect client where using PMS services as for their
Investment Option.
 10. Which Portfolio Type you preferred?

PORTFOLIO PREFERD
27%
EQUITY BALANCED DEBT

45%

28%

Interpretation
The above analysis shows, in which portfolio the investor like to deal more in PMS. As
45% investor likes to go for Equity Portfolio and 28% with Balanced Portfolio, whereas around
27% investor like to, go for Debt Portfolio.

 How was your experience about Portfolio Management services (PMS) of HSBC
InvestDirect Limited?

Portfolio Management services of HSBC

InvestDirect Ltd

Investor earned suffer losses BEP

30%
54%
16%
 Interpretation
In the above analysis it is clear that the Investor have the good and the bad
experience both with the HSBC InvestDirect PMS services.
In this current scenario 54% of the Investor earned, whereas around 16% have to
suffer losses in the market. Similarly 30% of the Respondents are there in Breakeven Point
(BEP), where no loss and no profit.

11. Does HSBC InvestDirect Limited keep it PMS process Transparent?

HSBC InvestDirect Limited keep it PMS

process Transparent
yes no

34%

66%

Interpretation
The above analysis is talking about the Sharekhan Transparency of their PMS
services. In hundred respondents 66% said that they get all the information about their scrip
buying and selling information day by day, where as 34% of respondents are not satisfied with
the PMS information and Transparency because they don’t get any type of extra services in
PMS as they were saying.
  Do you recommend HSBC InvestDirect PMS to others?

Recommend HSBC InvestDirect PMS to others

Yes No
20%

80%

Interpretation:
The above analysis shows the Investor perception toward the HSBC InvestDirect
PMS as on the basis of their good and bad experience with HSBC InvestDirect limited. Among
hundred respondents 80% respondents were agree to recommend the PMS of HSBC
InvestDirect to their peers, relatives etc.
 7} FINDING AND CONCULSION

OBSERVATION AND FINDING:

 About 80% Respondents knows about the Investment Option, because remaining 15%
take his /her residential property as Investment, but in actual it not an investment
philosophy carries that all the Investment does not create any profit for the owner.
 More than 70% Investors are investing their money for Liquidity, Return and Tax
benefits.
 At the time of Investment the Investors basically considered the both Risk and Return in
more %age around 60%.
 As among all Investment Option for Investor the most important area to get more return
is share around 22%after that Mutual Fund and other comes into existence.
 More than 74% of Investors feels that PMS is less risky than investing money in Mutual
Funds.
 As expected return from the Market more than 46% respondents expect the rise in
Income more than 15%, 30% respondents are expecting between 15-25% return.
 As the experience from the Market more than 33% Investor had lose their money during
the concerned year, whereas 18% respondents have got satisfied return.

About 48% respondents do the Trade in the Market with Derivatives Tools Speculation
compare to 21% through Hedging .And the rest 31% trade their money in Investments.
 Around 59% residents manage their Portfolio through the different company
whereas 41%Investor manage their portfolio themselves.
 The most important reasons for doing trade with HSBC InvestDirect Limited is
HSBC InvestDirect, Research Department than its Brokerage rate Structure.
 Out of hundred respondents 54% respondents are using HSBC InvestDirect PMs
services.
 Investors preferred more than 48% equity Portfolio, 22%Balanceed Portfolio
and about 30% Debt Portfolio with HSBC InvestDirect PMS.
 About 52% Respondents earned through HSBC InvestDirect PMS product,
whereas 18% investor faced loses also.
 More than 63% Investor are happy with the Transparency system of HSBC
InvestDirect limited.
 As based on the good and bad experience with HSBC InvestDirect limited
around 86% are ready to recommended the PMS of HSBC InvestDirect to their
peers, relatives etc.
 CONCLUSION AND SUGGESTIONS

On the basis of the study it is found that HSBC InvestDirect Ltd is better services
provider than the other stockbrokers because of their timely research and personalized advice on
what stocks to buy and sell. HSBC InvestDirect Ltd. provides the facility of Trade tiger as well
as relationship manager facility for encouragement and protects the interest of the investors. It
also provides the information through the internet and mobile alerts that what IPO’s are coming
in the market and it also provides its research on the future prospect of the IPO. We can
conclude the following with above analysis.

 HSBC InvestDirect Ltd has better Portfolio Management services than Other
Companies
 It keeps its process more transparent.
 It gives more returns to its investors.
 It charges are less than other portfolio Management Services
 It provides daily updates about the stocks information.
 Investors are looking for those investment options where they get maximum returns
with less returns.
 Market is becoming complex & it means that the individual investor will not have the
time to play stock game on his own.
 People are not so much ware aware about the Investment option available in the Market.
Suggestions:

 The company should also organize seminars and similar activities to enhance the
knowledge of prospective and existing customers, so that they feel more comfortable
while investing in the stock market.
 Investors must feel safe about their money invested.
 Investor’s accounts must be more transparent as compared to other companies.
 HSBC InvestDirect limited must try to promote more its Portfolio Management
Services through Advertisements.
 8} LIMITATIONS OF THE STUDY

 The sample size was restricted with hundred respondents.

 There was lack of time on the part of respondents.
 The survey was carried through questionnaire and the questions were based on
perception.
 There may be biasness in information by market participant.
 Complete data was not available due to company privacy and secrecy.
 Some people were not willing to disclose the investment profile.
 9} BIBLIOGRAPHY

 ✔ [Link]
 ✔ [Link]
 ✔ [Link]
 ✔[Link]
 ✔ [Link]
 ✔ [Link]
 ✔ [Link]
 ✔ [Link]

10} QUESTIONNAIRE
NAME:
AGE:
OCCUPATION:
TEL NO:

1. What is the basic purpose of your Investments?

A) Liquidity B) Return C) Tax Benefits D) Risk Covering

E) Capital Appreciation F) Others

2. What is the most important factor you consider at the time of Investment?

A) Risk B) Return C) Both

3. From which option you will get the best returns?

A) Mutual Funds B) Shares C) Commodities Market D) Bonds

E) Fixed Deposits F) Property G) Others

4. If you invested in Share Market, what has been your experience?

A) Satisfactory Return B) Burned Finger C) Unsatisfactory Results

D) No

5. How do you trade in Share Market?

A) Hedging B) Speculation C) Investment

6. How do you manage your Portfolio?

 A) Self B) Depends on the company for portfolio

7. Are you using Portfolio Management services (PMS) of HSBC InvestDirect?

A) Yes B) No

8. Which Portfolio Type you preferred?

A) Equity B) Debt C) Balanced

9. Does HSBC InvestDirect Limited keep it PMS process Transparent?

A) Yes B) No

10. Do you recommend HSBC InvestDirect PMS to others?

A) Yes B) No