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PORTFOLIO MANAGEMENT

DEFINITION

Portfolio Management is an art and science about the making decisions investment and other company policies.

In other words:

Portfolio management is the capacity of company’s strength, weakness, threats and opportunities to avail high class return to its investment.

INTRODUCTION:

Portfolio Management is the responsibility of company’s top level management team. It is helpful for new product development. Portfolio management is the responsibility of the senior members of the enterprise. The senior members are also called the product team of the organization. Portfolio management is helpful for making decision about the new product & planning and it also determine the expenditures on its product.

FORMS OF MANAGEMENT PORTFOLIO:

There are two forms of Management Portfolios,

• Passive portfolio
• Active portfolio

PASSIVE PORTFOLIO:

Passive management portfolio involves the market indexing and index investments.

ACTIVE PORTFOLIO:

Active management portfolio involves the active participation of manager, co- manager or team of management who takes the steps in gaining the high returns from its investments. It also includes the active participation of manager to manage their funds through its decision after the research and development. Mostly company close ended funds managed by the active portfolio manager.

USES OF PORTFOLIO MANAGEMENT:

Mostly the portfolio management is used to making the decision of new product, its planning, evaluation and its cost expenditures.

TYPES OF PORTFOLIO MANAGEMENT:

There are the two types of Portfolio Management which are as under,

• Enterprise Portfolio Management
• Project Portfolio Management

ENTERPRISE PORTFOLIO MANAGEMENT:

The enterprise portfolio management provides the information about the enterprise finance to spend on its business activities.

PROJECT PORTFOLIO MANAGEMENT:

The project portfolio management provides the information in analytical approach for decision making.

FACTORS TO INFLUENCE PORTFOLIO MANAGEMENT:

These factors to influence the portfolio management which are as under,

• Broad asset allocation
• Specific security selection
• Right investment
• Risk involvement
• Best management of portfolio
• Market efficiency
• Allocation of resources
• More then one investment portfolio
• Future profit & loss account

Tags: Allocation of Resources, Factors to Influence Enterprise, New Product Development, Types of Portfolio Management, Uses of Portfolio Management