Security Analysis

Portfolio
Management
Group 9

Sector - FMCG

Age – 30 Years
Amount – 25 Lakhs

Assumptions:
1. Assuming the Client to be an Aggressive investor and wants to take
20% risk and wants to invest major portion in Equity.
2. The client is not looking for any tax saving schemes. Yash Bhansali MG1921- B45
3. The client is fully insured and is receiving benefits under 80 C and
10(10)D. Mayur Agrawal MG1921- B46
4. No assumptions with respect to tax slab applicable have been made. Kashish Thakur MG1921-
5. All Investments in stocks to be made in FMCG sector. B47
6. Client Needs money at end of 5 years hence investments beyond 5
years maturity are ignored. Kunal Jadhav MG1921- B48
1
Calculation of Weights Security
Stocks
Amount
1,736,360
Percent
69%
Security
DABUR
Amount
238,159
Percent No of shares
10% 479
FD 513,640 21% HUL 703,487 28% 346
• Jensen alpha and Treynor GODREJ CONS 404,194 16% 573
Mutual Fund Bonds 250,000 10%
ratio suggest to invest more Total 2,500,000 100%
NESTLE IND 390,520 16% 25
in HUL and Nestle. Total 1736360 69% 1423

• Whereas Markowitz
Theory suggest to invest
more in HUL and Godrej.

• So we have invested based

on the average of weights
calculated from Treynor
ratio and Markowitz
Theory.

• RFR taken as 6%.

Dabur HUL Godrej Nestle

Jensen alpha 8.59% 16.96% 10.27% 17.00% In Markowitz theory we have assumed that a minimum
Treynors Ratio 0.17 0.30 0.17 0.33 investment of 10% and maximum 50% to be made in each
Weights as per JA & TR 17.23% 30.47% 17.86% 34.44% stock also the maximum return is calculated at a 20% risk
2

Weights as per MT 10% 50% 28% 12% appetite based on Assumption.

Applied weights 14% 40% 23% 23% Source - Calculated
 WHY INVEST IN THIS
STOCKS

Source – Money Control

• Stocks like Emami and MC-Dowells have given a negative Return.

• Also ITC has given negative returns and also a major part of their revenue comes from Cigarettes and only
12-18% are from FMCG goods.
• All Other Investment have been made in stock providing the highest return in comparison to their risk.

3
 Aggressive Defensive
69% 31%
17,36,360 7,63,640

Security Investment Return SD/Risk

Stocks 17,36,360 22.41% 25.65%
F.D. 5,13,640 8.40% 0.00%
Mutual Fund 2,50,000 10% 3.74%
Total 25,00,000 18.25% 18.19%

NESTLE
Particular DABUR HUL GODREJ Cons IND
Annual Return 16.72% 25.11% 18.70% 24.88%
4
S.D. 24.99% 23.39% 30.74% 24.87%
Beta 0.64 0.65 0.73 0.57
Source - Calculated
FIXED DEPOSIT

Source - Paisa Bazar 5

IDFC BOND FUND MEDIUM TERM PLAN DIRECT
GROWTH

Source - Money Control

 CONCLUSION

• HEDGING THE PORTFOLIO.

• REINVESTMENT OPPORTUNITY.
• DIVERSIFIED PORTFOLIO.
• PORTFOLIO DRIFT.
• BUFFER CASH IN AGGRESSIVE INVESTMENT.
• LIFE COVER.

7
THANK YOU