Investors perception on portfolio management services


Full text




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

With regard to my Project with GEOJIT BNP PARIBAS, Bhubaneswar, I would like to thank each and everyone who offered help, guidelines and support whenever required.

I sincerely express my thankfulness to Mr. SWASTI SUNDER

BEHERA, Bhubaneswar for their valuable suggestions and help

during the project.

I am extremely grateful to my college guide, Mr. PK SAHOO

(Lecturer cum-Trainer), SRUSTI ACADEMY OF MANAGEMENT, Bhubaneswar.

I express my deep sense of gratitude to my company mentors, without whose support and cooperation this project could not have been completed successfully.

Last but not least, I am deeply indebted to GOD and my parents for their constant blessings.

A Study on Investor’s

Perception on




With reference to




Submitted By Mr.Saroj Kumar Behera Regd. No. 1006286054

Guided By

Mr. P K Sahoo (Asst. Prof)




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

With regard to my Project with GEOJIT BNP PARIBAS,

Bhubaneswar, I would like to thank each and every one who offered

help, guidelines and support whenever required.

I sincerely express my thankfulness to Mr. SWASTI SUNDER


PARIBAS, BHUBANESWAR, for their valuable suggestions and help during the project.

I am extremely grateful to my college guide, Mr. P.K SAHOO (Asst.


And all the faculty member of my college for their valuable suggestions and able guidance.

I express my deep sense of gratitude to my company mentors, without whose support and cooperation this project could not have been completed successfully.

Last but not least, I am deeply indebted to GOD and my parents for their constant blessings.

Saroj Kumar Behera Regd. No.1006286054



I hereby declare that this Summer Internship Project Report entitled


requirement of Management in Business Administration (MBA) to the Institute of SRUSTI ACADEMY OF MANAGEMENT, Bhubaneswar is based on primary and secondary data founded by me in various department, books, magazines and websites.

This is an original piece of work and has not been submitted to any other institution or university for any purpose.

I also declare that this project is a genuine work carried out by me and all the information submitted is true and original to the best of my knowledge and belief.

Place:-Bhubaneswar Saroj Kumar Behera



Investing is both Arts and Science. Every Individual has their own specific financial need and expectation based on their risk taking capabilities, whereas some needs and expectation are universal. Therefore, we find that the scenario of the Stock Market is changing day by day hours by hours and minute by minute. The evaluation of financial planning has been increased through decades, which can be best seen in customers. Now a day‟s investments have become very important part of income saving. In order to keep the Investor safe from market fluctuation and make them profitable, Portfolio Management Services (PMS) is fast gaining Investment Option for the High Net worth Individual (HNI). There is growing competition between brokerage firms in post reform India. For investor it is always difficult to decide which brokerage firm to choose.

The research design is analytical in nature. A questionnaire was prepared and distributed to Investors. The investor‟s profile is based on the results of a questionnaire that the Investors completed. The Sample consists of 50 investors from various broker‟s premises. The target customers were Investors who are trading in the stock market. In order to identify the effectiveness of GEOJIT BNP PARIBAS PMS services this Research is carried throughout the area of Bhubaneswar. At the time of investing money everyone look for the Risk factor involve in the Investment option. The Report is prepared on the basis of Research work done through the different Research Methodology the data is collected from both the source Primary sources which consist of Questionnaire and secondary data is collected from different sources such as Company website, Magazine and other sources.



The field of investment traditionally divided into security analysis and portfolio management. The heart of security analysis is valuation of financial assets. Value in turn is the function of risk and return. These two concepts are in the study of investment .Investment can be defined the commitment of funds to one or more assets that will be held over for some future time period.

In today fast growing world many opportunities are available, so in order to move with changes and grab the best opportunities in the field of investments a professional fund manager is necessary. Therefore, in the present scenario the Portfolio Management Services (PMS) is fast gaining importance as an investment alternative for the High Net worth Investors.

Portfolio Management Services (PMS) is an investment portfolio in stocks, fixed income, debt, cash, structured products and other individual securities, managed by a professional money manager that can potentially be tailored to meet specific investment objectives. When you invest in PMS, you own individual securities unlike a mutual fund investor, who owns units of the entire fund. You have the freedom and flexibility to tailor your portfolio to address personal preferences and financial goals. Although portfolio managers may oversee hundreds of portfolio, your account may be unique.

As a matter of fact, portfolio is combination of assets the outcomes of which cannot be defined with certainty new assets could be physical assets, real estates, land, building, gold etc. or financial assets like stocks, equity, debenture, deposits etc.

Portfolio management refers to managing efficiently the investment in the securities held by professional for others.

Merchant banker and the portfolio management with a view to ensure maximum return by such investment with minimum risk of loss of return on the money invested in securities held by them for their


clients. The aim Portfolio management is to achieve the maximum return from a portfolio, which has been delegated to be managed by manger or financial institution.

There are lots of organizations in the market on the lookout for the people like you who need their portfolios managed for them .They have trained and skilled talent will work on your money to make it do more for you.

Therefore, if any investors still insist on managing their own portfolio, then ensure you build discipline into their investment. Work out their strategy and stand by it.


Each research study has its own specific purpose. It is like to discover to Question through the application of scientific procedure. But the main aim of my research to find out the truth that is hidden and which has not been discovered as yet. My research study has five objectives:-


➢ To know the concept of Portfolio Management

➢ To know in depth about PMS, Insurance, Mutual Funds, Stock, Bonds etc

➢ To study about the effectiveness & efficiency of GEOJIT BNP PARIBAS Ltd. in relation to its competitors

➢ To study about whether people are satisfied with GEOJIT BNP PARIBAS Services & Management System or not

➢ To study about the difficulties faced by persons while Trading in GEOJIT BNP PARIBAS



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 GEOJIT BNP PARIBAS, PMS services effectiveness in the current situation.

➢ It also covers the scenario of the Investment Philosophy of a Fund Manager.


➢ As only Bhubaneswar was dealt in the survey so it does not represent the view of the total Indian market.

➢ The sample size was restricted with fifty 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.


Portfolio Management Service (PMS): An Overview

Portfolio Management Services (PMS) is a specialized service which offers a range of specialized investment strategies so as to capitalize on the opportunities present in the market.

Any form of investing requires time, knowledge, and the right mind-set. It also requires constant monitoring. Under PMS, professional managers strategize to deliver consistent returns while keeping in mind your risk appetite. Every portfolio manager is skilled and has a well-defined investment philosophy and a strategy which acts as a guiding principle.

PMS relieves an investor from all the administrative hassles that occur while investing. One receives periodic reports on his/her

portfolio performance as well as on other aspects

of investments. Investments are tracked on a continuous basis to maximize returns.

In case of a PMS setup, the relationship manager defines the financial goals and advises the right product mix. Personalized service is given that ensures that you receive periodic updates and also the account performance reports Portfolio managers manage stocks, bonds, and mutual funds of their clients considering their personal investment goals as well as their risk preferences.

What is PMS?

Portfolio Management Services (PMS) is an investment portfolio in stocks, fixed income, debt, cash, structured products and other individual securities, managed by a professional money manager that can potentially be tailored to meet specific investment objectives. When you invest in PMS, you own individual securities unlike a mutual fund investor, who owns units of the entire fund. You have the freedom and flexibility to tailor your portfolio to address personal preferences and financial goals. Although portfolio managers may oversee hundreds of portfolios, your account may be unique.


It is the art and science of making decisions about investment mix and policy, matching investments to objectives, asset allocation for individuals and institutions, and balancing risk against performance. In other words, Portfolio Management Services (PMS) is a specialized & customized service that offers a range of specialized investment strategies to capitalize on the opportunities in the market. Though, PMS is managed by a professional portfolio managers, it has potential to address the personal preferences tailored into the investment portfolio giving the freedom and flexibility required for achieving the financial goals. This is typically a high-end product meant for high net-worth individuals (HNIs) because it needs some significant minimum investment.

Portfolio management is different from investing in mutual funds. In mutual funds, the investments of various people are pooled together and the fund manager will invest it as a whole. But in portfolio management, the individuality of each client's portfolio is preserved and it will be tailor-made according to the requirements of the client.

Why Portfolio Management Services?

Today, the financial market is increasingly complex and managing your own portfolio will take up a lot of your time and effort. There are situations when you don't have time or knowledge to explore the best investment alternatives in the market. This is a common problem faced by many wannabe investors like you. At this juncture, portfolio management services can help you get out of this dilemma. So you can simply assign your investments to portfolio management services who will report to you regularly on your portfolio performance. Don't feel lost in this complex world of investments. Let the experts do their job.

But why should you opt for PMS? Here are a few aspects on which portfolio managers say they score on top like:-

Balanced Portfolio: Professional research and advice will help you

with information on the best investment options and ideas for your portfolio.


Maximum Returns, Minimum Risks: Portfolio management

services assure you of the best downside protection for your portfolio. You will benefit with practical financial advice that can help convert all paper gains into real profits in the shortest time.

Adjust Your Portfolio To Market Trends: When you avail of

portfolio management services, you enjoy greater freedom and flexibility to diversify your investments.

Personalized Advice: Get investment advice and strategies from

expert Fund Managers. In PMS, you may gain direct personalised access to the professional money managers who actively manage your portfolio. This interaction may come in various different ways including in-person meetings, conference calls, written commentary, etc with the fund management team.

Professional Management: Money management services that work

for you.

Continuous Monitoring: You are informed about your investment

decisions. It is important to recognise that portfolios need to be constantly monitored and periodic changes made to optimise the results.

Hassle Free Operation: High standards of service and complete

portfolio transparency. The company takes care of all the administrative aspects of the client's portfolio with a periodic reporting (usually daily) on the overall status of the portfolio and performance.

Greater control: You have greater control over the asset allocation in

PMS. Here the portfolio can be customized to suit your risk-return profile.

Transparency: PMS provides comprehensive communications and

performance reporting that will give investors a complete picture regarding the securities held on his behalf. Web-enabled access will ensure that client is just a click away from all information relating to his investment.


Types of Portfolio Management Services

Investment Management Solution in PMS can be provided in the following ways:

 I. Discretionary

Ii. Non Discretionary iii. Advisory

Discretionary: Under these services, the choice as well as the

timings of the investment decisions rest solely with the Portfolio Manager.

Non Discretionary: Under these services, the portfolio manager

only suggests the investment ideas. The choice as well as the timings of the investment decisions rest solely with the Investor. However the execution of trade is done by the portfolio manager.

Advisory: Under these services, the portfolio manager only

suggests the investment ideas.

The choice as well as the execution of the investment decisions rest solely with the Investor.

Rule 2, clause (d) of the SEBI (portfolio managers) Rules, 1993

defines the term “Portfolio” as “total holding of securities belonging to any person”.

PMS Vs. Mutual Funds

A mutual fund is a collective pool where money is obtained from a large number of persons and invested by professionals. The fundamental difference between mutual fund and portfolio management service is that the latter involves management and implementation of your decisions.

Unless you specifically ask for the same, the PMS is not going to take investment decisions for you. On the other hand, you cannot instruct your mutual fund house manager to invest your money in specific sectors only, right? This decision should be taken when you are choosing the mutual fund scheme. However, once the choices been taken, you lose all freedom of indicating your personal choice.

Another significant difference between portfolio management service and mutual funds is that the former can offer customized and


individually tailored solutions. On the other hand, mutual funds offer group solutions for a large number of persons seeking a specific investment option. For example, if you wish to invest in the infrastructure sector and if you wish to spread your investment over a wide range of services, you can go in for an infrastructure related mutual fund. If you feel the existing mutual fund schemes are not good enough, there is nothing you can do about it.

When you take the same decision with the help of your portfolio management service, you can choose how much money goes into which industry and how it should be managed and assessed. The management service merely acts as an agent to facilitate and execute your decisions.

Another significant difference between the two solutions or services is the extent of regulation. Mutual funds have been very popular for the past five decades or more. Hence, there is well established set of regulations for mutual funds in the country. On the other hand, the idea of appointing a professional to manage one‟s investment is a recent entrant.

The charges of different mutual fund companies and schemes have been laid out in clear detail. On the other hand, PM Services offered by banks and other financial institutions have their own separate and independent set of charges.

Under certain conditions and circumstances, the portfolio management service may function just like a mutual fund. If your portfolio is not very high, your bank may combine it with portfolio of other customers in the same condition and take joint investment decisions. When this happens, the service provider will function just like a mutual fund manager. However, if you have a diverse portfolio and if you are a high net worth individual, you can insist on customized services from your bank or financial institution. This option is not available when you invest in mutual funds.


Portfolio Management Services and Mutual Funds: The Differences

Features PMS Mutual Fund

Management Provide ongoing,

personalized access to professional money management services Provide access to professional money management services Customization Portfolio can be tailored to

address each investor's

specific needs

Portfolio structured to meet the fund's stated investment objectives

Ownership Investors directly own the

individual securities in their portfolio, allowing for tax management flexibility

Shareholders own

shares of the fund and cannot influence buy and sell decisions or control their exposure

to incurring tax


Liquidity Although managers may

hold cash, they are not required to hold cash to meet redemptions

Mutual funds

generally hold some

cash to meet


Minimums Significantly higher

minimum investments than mutual funds. Generally, minimum ranges from:

Rs. 1 Crore + for Equity


 Rs. 5 Crore + for Fixed Income Options  Rs. 20 Lacs + for Structured Products Provide ongoing, personalized access to professional money management services


Flexibility Generally more flexible than mutual funds. The

Portfolio Manager may

move to 100% cash if required.

The Portfolio Manager may take his own time in building up the portfolio. The Portfolio Manager can also manage a portfolio

with disproportionate

allocation to select

compelling opportunities

Comparatively less



Geojit BNP Paribas Financial Services Ltd. Evolution of the company

It all started in the year 1987 when Mr. C.J. George and Mr. Ranajit Kanjilal founded Geojit as a partnership firm. In 1993, Mr.Ranajit Kanjilal retired from the firm and Geojit became the proprietary concern of Mr. C .J. George. In 1994, it became a Public Limited Company named Geojit BNP Paribas Financial Services Ltd. The Kerala State Industrial Development Corporation Ltd. (KSIDC), in 1995, became a co-promoter of Geojit by acquiring a 24 percent stake in the company, the only instance in India of a government entity participating in the equity of a stock broking company. (BSE) in the year 2000. Company‟s wholly owned subsidiary, Geojit Commodities Limited, launched Online Futures Trading in agri-commodities, precious metals and energy futures on multiple commodity exchanges in 2003. This was also the year when the company was renamed as Geojit BNP Paribas Financial Services Ltd. (GFSL). The Board consists of professional directors; including a Kerala Government nominee. With effect from July 2005, the company is also listed at The National Stock Exchange (NSE).

Company is a charter member of the Financial Planning Standards Board of India and is one of the largest Depository Participant (DP) brokers in the country. On March 13, 2007 the formation of Geojit BNP Paribas Financial Services Ltd

About BNP Paribas

BNP Paribas ( is one of the 6th strongest banks in the world according to Standard & Poor's.* With a presence in 85 countries and more than 2, 05,000 employees, 1,65,200 of which in Europe, BNP Paribas is a global-scale European leader in financial services. It holds key positions in its three activities: Retail banking, Investment Solutions and Corporate & Investment Banking. The


Group benefits from its four domestic markets: Belgium, France, Italy and Luxembourg. BNP Paribas also has a significant presence in the United States and strong positions in Asia and the emerging markets. BNP Paribas has been operating in India since 1860 in a number of businesses such as Investment Banking (CIB), Private banking (BNP Paribas Wealth Management), Life Insurance (SBI Life) and Asset Management (Sundaram BNP Paribas), Infrastructure Funding (Srei BNP Paribas), Retail Financing (Sundaram BNP Paribas Home Finance), Car Contract Hiring (Arval), Institutional Broking (BNP Paribas Securities India) and Securities Services (Sundaram BNP Paribas Securities Services and BNP Paribas Sundaram Global Securities Operations).

A leading retail financial services player

Geojit BNP Paribas today is a leading retail financial services company in India with a growing presence in the Middle East. The company rides on its rich experience in the capital market to offer its clients a wide portfolio of savings and investment solutions.

The gamut of value-added products and services offered ranges from equities and derivatives to Mutual Funds, Life & General Insurance and third party Fixed Deposits.

The needs of over 495,000 clients are met via multichannel services - a countrywide network of over 500 offices, phone service, dedicated Customer Care centre and the Internet. Geojit BNP Paribas has membership in, and is listed on, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). In 2007, global banking major BNP Paribas joined the company‟s other major shareholders - Mr. C.J.George, KSIDC (Kerala State Industrial Development Corporation) and Mr.Rakesh Jhunjhunwala – when it took a stake to become the single largest shareholder.

Strategic joint ventures and business partnerships in the Middle East have provided the company access to the large Non-Resident Indian (NRI) population in the region. Now, as a part of the BNP Paribas


global network, Geojit BNP Paribas is well positioned to further expand its reach to NRIs in 85 countries. Barjeel Geojit Securities is the joint venture with the Al Saud group in the United Arab Emirates that is headquartered in Dubai with branches in Abu Dhabi, Ras Al Khaimah, Sharjah and Muscat. Aloula Geojit Brokerage Company headquartered in Riyadh is the other joint venture with the Al Johar group in Saudi Arabia. The company also has a business partnership with the Bank of Bahrain and Kuwait, one of the largest retail banks in Bahrain and Kuwait.

At the forefront of the many fruitful associations between Geojit BNP Paribas and BNP Paribas is their joint venture, namely, BNP Paribas Securities India Private Limited. This JV was created exclusively for domestic and foreign institutional clients. An industry first was achieved when Geojit BNP Paribas became the first broker in India to offer full Direct Market Access (DMA) on NSE to the JV‟s institutional clients. A strong brand identity and extensive industry knowledge coupled with BNP Paribas‟ international expertise gives Geojit BNP Paribas a competitive advantage.

Expanding range of online products and services

Geojit BNP Paribas has proven expertise in providing online services. In the year 2000, the company was the first stock broker in the country to offer Internet Trading. This was followed by integrating the first Bank Payment Gateway in the country for Internet Trading, and many other industry firsts. Riding on this experience, and harnessing BNP Paribas Personal Investors‟ expertise as the leading online broker in Europe is helping the company to rapidly expand its business in this segment. Presently, clients can trade online in equities, derivatives, currency futures, mutual funds and IPOs, and select from multiple bank payment gateways for online transfer of funds. Strategic B2B agreements with Axis Bank and Federal Bank enable the respective bank‟s clients to open integrated3-in-1 accounts to seamlessly trade via a sophisticated Online Trading platform.


Further, deployment of BNP Paribas‟ state-of-the-art globally accepted systems and processes is already scaling up the sales of Mutual Funds and Insurance.

Wide range of products and services

Certified financial advisors help clients to arrive at the right financial solution to meet their individual needs. The wide range of products and services on offer includes -

Equities | Derivatives | Currency Futures | Custody Accounts | Mutual Funds | Life Insurance & General Insurance | IPOs | Portfolio Management Services | Property Services | Margin Funding | Loans against Shares

A growing footprint

With a presence in almost all the major states of India, the network of over 500 offices across 300 cities and towns presently covers Andhra Pradesh, Bihar, Chhattisgarh, Goa, Gujarat, Haryana, Jammu & Kashmir, Karnataka, Kerala, Madhya Pradesh, Maharashtra, New Delhi, Orissa, Punjab, Rajasthan, Tamil Nadu & Pondicherry, Uttar Pradesh, Uttaranchal and West Bengal.

Geojit milestone

Product innovation backed by a high level of domain specific knowledge and state-of-the-art technology has helped Geojit BNP Paribas set many milestones including numerous industry firsts.


 Membership in Cochin Stock Exchange (CSE).


 Becomes a Public Limited Company named Geojit Securities Ltd.


 Kerala State Industrial Development Corporation Ltd. (KSIDC) acquires 24 percent equity stake.


 Membership in National Stock Exchange (NSE).  Public Issue


 Launch of Portfolio Management Services with SEBI registration.


 Depository Participant (DP) under National Securities Depository Limited.


 Membership in Bombay Stock Exchange (BSE).


 BSE Listing.

 1st broking firm in India to offer online trading facility.  Commences Derivative Trading with NSE.

 Integrates the 1st Bank Payment Gateway in the country for Internet Trading.


 Becomes India's first DP to launch depository transactions through Internet.

 Establishes Joint Venture in the UAE to serve NRI customers.


 1st in India to launch an integrated internet trading system for Cash & Derivatives segments.


 Geojit Commodities Limited, wholly owned subsidiary, launched Online Futures Trading in agri-commodities, precious metals and in energy futures on multiple commodity exchanges.  National launch of online futures trading in Rubber, Pepper,

Gold, Wheat and Rice.

 Company renamed as Geojit BNP Paribas.


 National launch of online futures trading in Cardamom.


 NSE Listing.

 Geojit Credits, a subsidiary, registers with RBI as a Non-Banking Financial Company (NBFC).



 Charter member of the Financial Planning Standards Board of India.


 BNP Paribas takes a stake in the company‟s equity, making it the single largest shareholder.

 Establishes Joint Venture in Saudi Arabia to serve the Saudi national and the NRI.


 BNP Paribas Securities India (P) Ltd. – a Joint Venture with BNP Paribas S.A. for Institutional Brokerage.

 1st brokerage to offer full Direct Market Access execution in India for institutional clients.


 Launch of Property Services division.

 Launch of online trading in Currency Derivatives.

 Consequent to BNP Paribas becoming the largest stakeholder in Geojit BNP Paribas, company is renamed as Geojit BNP Paribas Financial Services Ltd.


 Launch of FLIP (Financial Investment Platform), a new advanced online investment platform.

Mission of the GEOJIT BNP PARIBAS is

“To educate and empower the individual investor to make better investment decisions through:




Why geojit ?

1. 24 years of history in Indian Capital Market

Geojit BNP Paribas has 24 years of in-depth broking experience in the Indian Capital Market. More than 5, 76,000 clients and over Rs


13,800 crores (as of 31st Dec ‟2010) in Assets under Management reflect the trust reposed in our expertise.

2. Pioneer in Online Trading in Feb. 2000

In the year 2000, Geojit BNP Paribas pioneered the simple concept of providing individuals with the facility to trade online. This revolution has given the company the first mover advantage in online trading. As a creative innovator, Geojit BNP Paribas uses advanced technology in online trading to meet client requirements such as customized online trading platforms and many other services.

3. Strong Shareholders

Geojit BNP Paribas is backed by strong shareholders. In 2007, global banking major BNP Paribas joined the company‟s other major shareholders - Mr.C.J.George, KSIDC (Kerala State Industrial Development Corporation) and Mr.Rakesh Jhunjhunwala when it took a stake to become the single largest shareholder.

4. Wide range of products

Geojit BNP Paribas offers a wide range of trading and investment products and solutions. Certified financial advisors help clients to arrive at the right financial solution to meet their individual needs. The wide range on offer includes - Equities | Derivatives | Currency Futures | Custody Accounts | Mutual Funds | Life Insurance &

General Insurance | IPOs | Portfolio Management Services | Property Services | Margin Funding | Loans against Shares

5. Attractive brokerage slabs

We provide value for money! To start with, we offer low online

brokerage charges which further decrease automatically, as and when, your volumes increase.0.03 to 0.01 for intra-day trades


6. Learn the craft

You too can develop your trading skills by availing of the effective guidance by our research department. We offer-

 Daily mails delivered to our client‟s mailbox on market

conditions and recommendations

 Technical analysis of BSE 200 Index scrip‟s

 Free monthly investment magazine

Services of professionally qualified executives at 540

offices across India.

 Our strong research ideas have been instrumental in converting our clients into successful traders.

7. Multichannel service- Internet, Phone, Branch trading

Trade the way that you want to by selecting from multiple channel options- Internet, Phone or Branch.

8. First mover advantage

Geojit BNP Paribas through its first mover advantage in different

areas has been the first to serve investors with its innovative offerings.

1st to launch internet trading in the year 2000.

 1st to launch integrated internet trading system for cash and derivative segments in the year 2002.

 1st Indian stock broking company to commence domestic

retail broking operations in any foreign country.

1st in the industry to have a global player offering its name

thereby creating Geojit BNP Paribas.

1st to launch exclusive branches for women in 2005.

9. Our deep reach

We have a pan-India network of over 540 offices with industry certified executives and a dedicated Call Centre to provide you quality services.


10. Wide range of fund options

Geojit BNP Paribas gives you the option to choose from the 700 plus Mutual Fund schemes offered by over 35 Asset Management companies such as SBI Mutual Fund, Reliance Mutual Fund, Franklin Templeton India Mutual Fund, Tata Mutual Fund, Sundaram BNP Paribas Mutual Fund, Fidelity Mutual Fund, and HDFC Mutual Fund.


1- Equity Trading Platform & Derivatives (Online/Offline). 2- Commodities Trading Platform (Online/Offline).

3- Portfolio Management Service (PMS). 4- Mutual Fund Advisory and Distribution. 5- Insurance Distribution.

6- Fixed Deposits.

7- Trade Confirmation via SMS.


Geojit BNP Paribas has more than eight decades of trust and credibility in the Indian stock market. It is one of the few Indian brokers to have one of the largest international banks, namely BNP Paribas, as its main shareholder, and to be able to use its name.BNP Paribas is ranked as the 11th company worldwide by Forbes in its Top 2000 list of The World‟s Leading Companies.


Geojit BNP is recognized as a pioneer in introducing innovative technology driven investment solutions in the industry. With their online trading account one can buy and sell shares in an instant from any PC with an internet connection. Customers get access to the powerful online trading tools that will help them to take complete control over their investment in shares.



GEOJIT BNP PARIBAS provides ADVICE, EDUCATION, TOOLS AND EXECUTION services for Investors. These services are accessible through many centres across the countrywide network of over 500 offices, Internet, dedicated Customer Care centre and phone services.


In a business where the right information at the right time can translate into direct profits, investors get access to a wide range of information on the content-rich portal, Investors will also get a useful set of knowledge-based tools that will empower them to take informed decisions.


One can call GEOJIT BNP PARIBAS‟s Dial-N-Trade number to get investment advice and execute his/her transactions. They have a dedicated call-centre to provide this service via a Toll Free Number 1800 425 5501 from anywhere in India.

Customer Service

Its customer service team assist their customer for any help that they need relating to transactions, billing, demat and other queries. Their customer service can be contacted via a toll free number, email or live chat on

Investment Advice

GEOJIT BNP PARIBAS offered personalised advice- „when and where to invest‟- based on the financial profiles made by trained advisory specialist from a gamut of instruments ranging from the „very safe to the very risky‟: Fixed Deposits, Life Insurance, Mutual Funds, Equities, Portfolio Management and Derivatives.



➢ Free Depository A/c ➢ Instant Cash Transfer ➢ Multiple Bank Option

➢ Secure Order by Voice Tool Dial-n-Trade

➢ Automated Portfolio to keep track of the value of your actual purchases

➢ 24x7 Voice Tool access to your trading account

➢ Personalized Price and Account Alerts delivered instantly to your Mobile Phone & Email address.

➢ Live Chat facility with Relationship Manager on Yahoo Messenger ➢ Special Personal Inbox for order and trade confirmations

➢ On-line Customer Service via Web Chat ➢ Enjoy Automated Portfolio

➢ Buy or sell even single share ➢ Anytime Ordering


➢ Online trading account for investing in Equity and Derivatives via

➢ Live Terminal and Single terminal for NSE Cash, NSE F&O & BSE

➢ Integration of On-line trading, Saving Bank and Demat Account ➢ Instant cash transfer facility against purchase & sale of shares. ➢ Competitive transaction charges

➢ Instant order and trade confirmation by E-mail ➢ Streaming Quotes (Cash & Derivatives)

➢ Personalized market watch





Mr. C.J. George Managing Director

Mr. Satish Menon Director(Operations)

Mr. A. Balakrishnan Chief Technology Officer

Mr. Venkitesh National Head Distribution

Mr. Martin Zachmeier Director (Planning and Control)

Mr. Binoy .V.Samuel Chief Financial Officer





Mr. A. P. Kurian Non - Executive & Independent


Mr. C. J. George Managing Director & Chief


Mr.Alkeshkumar Sharma Non - Executive & Independent


Mr. Mahesh Vyas Non - Executive & Independent


Mr. Rakesh Jhunjhunwala Non - Executive Director

Mr. Ramanathan Bupathy Non - Executive & Independent


Mr. Punnoose George Non - Executive Director

Mr. Olivier Le Grand Non - Executive Director






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 GEOJIT BNP PARIBAS Limited. For the purpose of the study 50 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


➢ Primary data: Questionnaire and field visit

➢ Secondary data: Published materials of GEOJIT BNP PARIBAS Limited. Such as periodicals, journals, news papers, and website

Duration of Study

The Study was carried out for the period of one and half months from 3rd August to 15th of September 2011.


➢ Sampling:

Since GEOJIT BNP PARIBAS 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 GEOJIT BNP PARIBAS limited.

➢ Sampling size:

A sample of fifty 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 ➢ Mailed Questionnaire



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.


Need of PMS

As in the current scenario the effectiveness of PMS is required. 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 is the following objective which is 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.


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 while 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.

Types of assets

The structure of a portfolio will depend ultimately on the investor‟s objectives and on the asset selection decision reached. The portfolio structure takes into account a range of factors, including the investor‟s time horizon, attitude to risk, liquidity requirements, tax position and availability of investments. The main asset classes are cash, bonds and other fixed income securities, equities, derivatives, property and overseas assets.


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. Cash is normally held over the short term pending use elsewhere (perhaps for paying claims by a non-life insurance company or for paying pensions), but may be held over the longer term as well. Returns on cash are driven by the general demand for funds in an economy, interest rates, and the expected rate of inflation. A portfolio will normally maintain at least a small proportion of its funds in cash in order to take advantage of buying opportunities.


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. Bond markets are international and have grown rapidly over recent years. 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. Depending on expected movements in future interest rates, the capital values of bonds fluctuate daily, providing investors with the potential for capital gains or losses.

Future interest rates are driven by the likely demand/ supply of money in an economy, future inflation rates, political events and interest rates elsewhere in world markets. Investors with short-term horizons and liquidity requirements may choose to invest in bonds because of their


relatively higher return than cash and their prospects for possible capital appreciation. Long term investors, such as pension funds, may acquire bonds for the higher income and may hold them until redemption – for perhaps seven or fifteen years. Because of the greater risk, long bonds (over ten years to maturity) tend to be more volatile in price than medium- and short-term bonds, and have a higher yield.


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. Also, preference shares usually do not carry voting rights and, in the event of firm failure, preference shareholders are paid before ordinary shareholders. Returns from investing in equities are generated in the form of dividend income and capital gain arising from the ultimate sale of the shares. The level of dividends may vary from year to year, reflecting the changing profitability of a company. Similarly, the market price of a share will change from day to day to reflect all relevant available information. Although not guaranteed, equity prices generally rise over time, reflecting general economic growth, and have been found over the long term to generate growing levels of income in excess of the rate of inflation. Granted, there may be periods of time, even years, when equity prices trend downwards – usually during recessionary times. The overall long-term prospect, however, for capital appreciation makes equities an attractive investment proposition for major institutional investors.



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. The extent to which a fund may incorporate derivatives products in the fund will be specified in the fund rules and, depending on the type of fund established for the client and depending on the client, may not be allowable at all.

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. Each contract specifies the type and amount of the asset to be exchanged, and where it is to be delivered (usually one of a few approved locations for that particular asset). Futures contracts can be set up for the delivery of cocoa, steel, oil or coffee. Likewise, financial futures contracts can specify the delivery of foreign currency or a range of government bonds. The buyer of a futures contract takes a „long position‟, and will make a profit if the value of the contract rises after the purchase. The seller of the futures contract takes a „short position‟ and will, in turn, make a profit if the price of the futures contract falls. When the futures contract expires, the seller of the contract is required to deliver the underlying asset to the buyer of the contract. Regarding financial futures contracts, however, in the vast majority of cases no physical delivery of the underlying asset takes place as many contracts are cash settled or closed out with the offsetting position before the expiry date.

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. Option contracts on stocks or stock indices are particularly popular. Buying an option involves paying a premium; selling an option involves receiving the premium. Options have the potential for large gains or losses, and are considered to be high-risk instruments. Sometimes, however, option contracts are used to reduce risk. For example, fund managers can use a call option to reduce risk when they own an asset. Only very specific funds are allowed to hold options.


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. These institutions purchase freehold and leasehold properties as part of a property portfolio held for the long term, perhaps twenty or more years. Property sectors of interest would include prime, quality, well-located commercial office and shop properties, modern industrial warehouses and estates, hotels, farmland and woodland. Returns are generated from annual rents and any capital gains on realization. These investments are often highly illiquid.


Portfolio theory also assumes that investors are basically risk adverse, 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:-

(1). 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 effectalises 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.


Cash equivalent less vulnerable to interest rate risk Long term Bond More vulnerable to interest rate risk.

(2) 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.


(3) 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.

(4) 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 honour 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 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: Possible returns (xi) Probability P(xi) 30 0.10 40 0.30 50 0.40 60 0.10 70 0.10 It is possible to calculate:

1. The expected (or average) return

If the possible returns are denoted by x and the related probabilities are p(x), the expected return may be represented as x (mean) and can be calculated as:- x = ∑ Possible returns Xi Probability P(xi) xi p(xi) 30 0.10 3 40 0.30 12 50 0.40 20 60 0.10 6 70 0.10 7 ∑ =48.0 Expected Return (Σpx) = 48%

2. The Standard deviation

Standard deviation =σ=√ Σ p(xi- x) 2

Also Variance (VAR) is equal to the standard deviation squared or σ2 Possible return Xi Probability P(xi) Deviation (xi-x) Deviation squares (xi-x) 2 Product (xi-x) 2 p(xi) 30 0.10 -18 324 32.4


40 0.30 -8 64 19.2

50 0.40 2 4 1.6

60 0.10 12 144 14.4

70 0.10 22 484 48.4

Standard deviation (σ) = √Variance = √ 116

= 10.77%

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.


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.

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.

Stocks 85% Bonds 15%

Aggressive Portfolio

Stocks 70% Bonds 25% Short term 5%

Growth Portfolio



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