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Equity Portfolio

Managementstrategies

- V. Sriram

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Background

Presentation on designing Equity Portfolio

consists of 4 parts

Review of EMH and its implication for active/passiveManagement of portfolio

Different forms of passive investment strategies

Styles and strategies of active management of

portfolios Combinations of active and passive management

strategies

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Approaches to equity investment

Equity portfolio management style falls intopassive and active management strategies

Passive equity portfolio management is a longterm buy and hold strategy

Active equity portfolio management attempts tooutperform a passive benchmark portfolio on arisk adjusted basis

Active investment strategies maximize returnsbased on proper market timing, team selectionand proper selection of individual stocks

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Passive Equity Investing Passive equity investment can be

classified into 3 types

Index Funds/ Index ETFs

Customized funds

Factor/Style funds

Techniques used in index funds may befull replication, sampling or optimization

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Factor/ Style Funds This type of fund replicates a benchmark

geared to mimic the performance of a

given common stock factor such as

growth, capitalization or yield generation

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Combining active and passive

styles

Combination of use of various equity fund

mangers who play complimentary roles

Use of factor models- statistical factor

models, macro economic factor models

eg. Economic growth, business cycle, long

term interest rates, short term interestrates, inflation, value of currency.

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Diversified Schemes 10 Yr

CAGR

Scheme NameNAV

25.11.

10 Yr

CAGR

Rs.10 lakh

becomes

(Rs. in lakhs)Reliance Growth 491.56 35.12 202.85

SBI Magnum Sector Umbrella - Contra 59.24 33.48 179.54

Reliance Vision 280.02 31.54 155.09

HDFC Equity Fund 292.07 31.46 154.15

Franklin India Prima Fund 295.85 31.31 152.40

HDFC Top 200 218.67 31.05 149.41

S&P Nifty 16.56 46.29

BSE Sensex 17.15 48.69

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Diversified Schemes 10 Yr

CAGR

Scheme NameNAV

25.11.

10 Yr

CAGR

Rs.10 lakh

becomes

(Rs. in lakhs)JM Equity 38.50 14.17 37.63

Birla Sun Life India Opportunities Fund 55.91 13.82 36.49

LIC Equity Fund 27.76 13.15 34.40

L&T Opportunities Fund - Cumulative 46.25 12.96 33.83

ING Core Equity Fund 39.47 9.78 25.42

Taurus Discovery Fund 17.01 9.44 24.65

S&P Nifty 16.56 46.29

BSE Sensex 17.15 48.69

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Top Sectors Taurus Discovery

Fund

Top 5 SectorsTaurus

Discovery FundTop 5 Sectors

Taurus

Discovery Fund

Date Sep-10 Date Sep-08

ar aceutica s

iotec no o y

S ippin

an s onstruction and

n ras tructure

onsu er Dura es and

ectronics

etro eu as and

petroc e ica products

So t are and onsu tancy

Services

Stee and Ferrous eta

S ippin Te eco Services

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Top Holdings - Taurus

Discovery FundCompany Name % of N. A.

Taurus Discovery Fund - Grow th

Fund Size = 29.67 Crs . (30-Sep-10)

ol as d

o a a ind ra an d

u ro indo a r a d

erca or ines d

pollo Tyres d

Company Name % of N. A.

Taurus Discovery Fund - GrowthFund Size = 26.85 Crs. (30-Sep-08)

ipyard d

rea s ore d

iv- ani il as plora ion erv ices d

dea ellular d

arg ons ruc ions d

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Thank You