A REPORT

ON

AN ANALYTICAL STUDY OF INVESTMENT PATERN OF HSBC CLIENTS UNDER

WEALTH MANAGEMENT SERVICES

BY

KAMLESH PALSANIYA

HSBC

1

A REPORT

ON

AN ANALYTICAL STUDY OF INVESTMENT OF HSBC CLIENTS UNDER

WEALTH MANAGEMENT SERVICES

BY

KAMLESH PALSANIYA

A report to be submitted in partial fulfillment of

The requirements of

BBA program

COMAPANY GUIDE FACULTY GUIDE

MR. NITIN VERMA RONAK MAHESHWARI

SALES MANAGER

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ACKNOWLEDGEMENT

It would be prudent to commence this report with an expression of gratitude towards all those

who have played an indispensable role in accomplishment of this project by providing their

valuable guidance.

I would first like to thank MR. PARMINDER SINGH, branch manager, HSBC, Jaipur for giving

me a platform to apply my theoretical knowledge in the practical world.

With due indebtedness, I am grateful to MR.NITIN VERMA, sales manager-acquisitions, PFS

for his cooperation in respect of fulfillment of the project. My increased spectrum of knowledge

in this field is the result of his relevant and high quality information.

Further I would like to extend my gratitude to the entire staff of HSBC for giving me inspiration,

guidance and support throughout my project. Lastly I would also like to thank my faculty guide

RONAK MAHESHWARI, MAHARISHI ARVIND INSTITUTE OF SCIENCE AND

MANAGEMENT, Jaipur for his regular guidance in the project and to sharpen our rough edges

from time to time.

It was indeed an enriching experience for me as a management student for getting a chance to do

a project in an organization of international repute like HSBC (HONGKONG AND SHANGHAI

BANKING CORPORATION LIMITED).

KAMLESH PALSANIYA

MAHARISHI ARVIND INSTITUTE OF SCIENCE AND MANAGEMENT

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EXECUTIVE SUMMARY

Investment management is one of the services provided under the wealth management.

Investment management is all about strengths, weakness, opportunities and threats in the choice

of debt vs. equity, domestic vs. international, growth vs. safety and many other tradeoffs

encountered in the attempt to maximize return at a given appetite for risk. This service specifies

investment objectives and constraints to the client and then tries to elaborate the choices that are

available in the asset mix and then future formulation of the investment portfolio strategy takes

place and then selection of the best possible securities and portfolio execution takes place after

that. It becomes mandatory to keep revising and evaluating the portfolio by the relationship

manager or financial advisor because of the changing market scenario and to achieve higher

returns with good growth perspective.

Each one of us harbors a dream that is distinct as our fingerprints and to achieve these different

needs we need different plans and different approaches, this calls for the services or the

suggestions which are now days are provided by the different banks and different financial

institutions like HSBC (launched its services in India in may 2005), HDFC, ICICI, CITI

GROUP, STANDARD CHARTED, ABN AMRO and lot more. For a plan to be successful the

first requirement is to know about the client, his present and future needs, to know about is risk

appetite and the time horizon, all these are included in the personal financial review which is

demanded from the client.

The project aims at studying about the investment pattern of different customers and the factors

which influence the designing of their investment portfolio.

HSBC” which is actually HONGKONG AND SHANGHAI banking corporation limited. It’s

presence in India dates back to 1853 when the mercantile bank of India was established In

Mumbai.

HSBC’s international network comprises over 10000 offices in 83 countries and territories in

Europe, Asia-pacific region, Americas, the middle east and Africa with headquarters in London.

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The shares are traded on NEW YORK stock exchange in the form of American depository

receipt.

In the very first week I got familiar with the various products offered by the bank which includes

different types of account, different schemes, credit facilities and other products related to wealth

management service. I gathered the information through websites and brochures and also

interacted with the persons in charge of these facilities in HSBC itself.

The second week was more focused on investment management and wealth management

services which included studying of personal financial reviews (PFR). The PFR provides with

the necessary and basic information about the client, his risk appetite and returns expected.

During this week I was working under a relationship manager with whom I went to the existing

clients and got to know about the requirement of the client and his expectations from the bank in

respect of the returns and other services.

With the starting of third week I was guided by a relationship manager to approach new clients

and make some cold calls. He guided me from time to time about how to pitch a customer as this

is the key step in banking it was followed by an appointment where I went with my relationship

manager. These types of meetings helped me in knowing how the clients react to the various

situations and also I got to know the product and services more. This also helped me in future

calls where I could talk to my client more confidently and pitch him in a more proper way.

The meeting helped us in knowing the clients in a better way, knowing his needs and

requirements. All these helped me in preparing my questionnaire. I was helped by my company

guide in preparation of the questionnaire.

The questionnaire aims to study the investment portfolio of the clients and included questions

which would help in knowing that what factors affect their investment and up to what extent

these factors affect their decisions. The questionnaire also contains questions relating in which I

will be able to judge that what type of investments does the investor favors and also their

investment patterns. The questionnaire included questions on demographic, psychographic and

behavioral aspects.

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On the completion of the project it was found that most of the investors investing through HSBC

were from the age group 20-29 years of age also they wants to invest in the avenues which have

low risk attached to it and which gives the maximum returns.

LIST OF ILLUSTRATIONS

SR. NO DESCRIPTION PAGE NO

1. Introduction of the project 8

1.1 Investment management as part of wealth management 8

1.2 A general introduction of wealth management 9

1.3 Investment avenues 11

1.4 Role of financial advisor 15

1.5 Investment management process 17

1.6 Importance of diversification 21

2 Company profile 21

2.1 Introduction to banking 21

2.2 Introduction of the organization 22

2.3 Entities present in India 23

2.4 Products and services of HSBC 24

3 Main text 30

3.1 Objectives 30

3.2 Scope of study 30

3.3 Research design 30

3.4 Sampling procedure 31

3.5 Sample size 31

3.6 Data collection 32

3.7 Data analysis and interpretation 32

3.7.1 Phase I-graphical analysis of questionnaire 33

3.7.2 Phase II-collective analysis 54

3.7.3 Phase III-hypothesis testing 56

3.8 Suggestions and recommendations 59

4 References & bibliography 60

5 Appendices 61

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5.1 Questionnaire 61

5.2 Respondent details 65

5.3 Investment portfolio of the clients

1. INTRODUCTION OF THE PROJECT

AN ANALYTICAL STUDY OF INVESTMENT OF HSBC

CLIENTS UNDER

WEALTH MANAGEMENT SERVICES

INVESTMENT AND INVESTMENT MANAGEMENT

Investment is putting aside and employing money in financial instruments in the present, with

the expectation of positive rate of return in the future. It can also be quoted as the investing of

money or capital in order to gain profitable returns as interest, income, or appreciation in value.

Investment management is the art of administering the employment of money in financial

instruments in the present, with the expectation of positive rate of return in the future.

1.1 INVESTMENT MANAGEMENT AS THE PART OF WEALTH

MANAGEMENT

Investment management is one of the services provided under wealth management. The wealth

management is all about managing the wealth that is surplus amount of money or the saving of

the individual by investing them into diversified tools like mutual funds, insurance, gold, real

estate etc.

Wealth management is an all-encompassing investor service comprising of:

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Investment advisory

Management of investments ranging from insurance to stocks

Maximizing returns on investments.

The concept of wealth management was originated in U.S. in 1990. It is investment advisory

service covering financial planning keeping in mind the individual’s current and future needs. It

provides the individual with personalized banking, asset management, taxation advisory and

portfolio management or investment management. Since early 1970’s there has been a dramatic

transformation in the way financial institutions and advisors serve the wealthy individual and

families. Today they follow a holistic and multi disciplinary approach to manage client affairs.

Large numbers of banks and financial institutions like HSBC(HSBC launched its services in

India in may 2005), HDFC, ICICI, CITI GROUP, STANDARD CHARTED, ABN AMRO and

lot more are seeking share in fast growing wealth management service market that sets to double

every two years.

Wealth management actually means more than just sticking to your budget it rather helps to plan

your future, this is actually a right kind of approach and a customized solution to fulfill and

achieve your financial goals. It claims to manage your money and provide you with complete

wealth management services which makes your path easier for the achievement of the bright

future and make us feel comfortable and assured that the wealth is managed in the best way.

Now because of the ongoing market scenario where the markets have become more complex,

with the kind of the current interest rate and taxation environment there is a need arising where

the people require somebody who is specialized in the field and can guide them in the best way,

where there wealth can be managed prudentially and professionally because the age of

guaranteed returns have gone and this calls for the wealth management services which include all

the services from cradle to grave, services like banking, investment, tax management, legal

solutions and transmission of wealth to next generation.

The various services offered are:

Private banking

Investment and banking

Banking and credit solutions

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1.2 A GENERAL INTRODUCTION OF INVESTMENT MANAGEMENT

As wealth management, which is still regarded as new and is unknown to the people so as the

investment management which is nearly a new concept A concept wherein the wealth of the

individual is managed looking at the various factors.

Investment management or asset allocation is an investment portfolio technique that aims to

balance risk and create diversification by dividing assets among major categories such as cash,

bonds, stocks, real estate and derivatives. Each asset class has different levels of return and risk,

so each will behave differently over time. For instance, while one asset category increases in

value, another may be decreasing or not increasing as much. Investment management can also

be explained as the professional management of various securities (shares and other bonds) or

assets (gold or real estate) to meet the specified goal or meet the requirements; it is for the

overall benefit of the investor. Investors could either be institution (corporate, insurance

company), or the private individuals who either do the investments directly or attaches with

either the bank or some institution for the investment.

It can also be said to be a disciplined management approach which combines an understanding of

the goals and objectives of the investors with a fine tuned plan out by various software and

managers keeping in mind all the factors which will affect the investment portfolio.

An investment management service includes

Financial analysis

Asset selection

Stock selection

Plan implementation

Ongoing monitoring of investments

Investment could be done in various avenues like:

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Gold

Direct investment in the equity market

Mutual funds

Fixed deposits

ULIP

SIP

Insurance linked investments

But the kind of portfolio designing done under investment management in HSBC majorly

includes the following avenues in the investment

Mutual funds

SIP

Insurance

ULIP

1.3 INVESTMENTS AVENUES

An investment portfolio may include investments in:

Real estate

Gold

Direct investment in the equity market

Mutual funds

Fixed deposits

ULIP

SIP

Insurance

REAL ESTATE

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Real estate is dealing in land and property. Due to increase in population, urbanization, and

developments have lead to increase in the prices of the land. If the investor has long time horizon

with the perspective of growth then this kind of investment is the best suited one

DIRECT INVESTMENT IN THE EQUITY MARKET

Equity investment generally refers to buying and holding of shares of stock on the stock market

by individuals and funds in anticipation of income from dividends and capital gains as the value

of the stock rises. It also sometimes refer to the acquisition of equity (ownership) participation in

private (unlisted) company or startup (a company being created or newly created). When the

investment is in infant companies, it is referred to as venture capital investing and is generally

understood to be higher risk then investment in listed and going concern situations.

MUTUAL FUNDS

A mutual fund is a corporation (trust) that pools the savings, which are then invested in money

market, debt market and capital market instruments such as shares, debentures and other

securities. Thus the mutual fund serves as a link between the public and the capital markets so as

to mobilize savings from the investors and invest them in the capital markets to generate returns.

It can also be said that a mutual fund is an investment tool that allows small investors to access

to well defined equities, bonds and other securities. Each share holder participates in the gain or

the loss of the fund. Units are issued according to the:

Money put in by the investor

Type of equity or bond chosen

NAV of the security prevailing in the market

NAV is the main performance indicator. A fund’s NAV is calculated as total assets minus all the

expenses and divided by the number of its total outstanding units.

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Mutual Funds are financial intermediaries. They are companies set up to receive your money,

and then having received it, make investments with the money Via an AMC. It is an ideal tool

for people who want to invest but don't want to be bothered with deciphering the numbers and

deciding whether the stock is a good buy or not. A mutual fund manager proceeds to buy a

number of stocks from various markets and industries. Depending on the amount you invest,

you own part of the overall fund.

TWO TYPES OF MUTUAL FUND ARE:

STRUCTURED BASED

INVESTMENT BASED

STRUCTURED BASED MUTUAL FUND ARE:

OPEN ENDED FUNDS- an Open-ended Fund is that kind of fund that are available for

subscription all through the year. These do not have a fixed maturity.

CLOSE ENDED FUNDS- A Close-ended Fund has a stipulated maturity period, which

generally ranges from 3 to 15 years. The fund is open for subscription only during a

specified period. Investors can invest in the scheme at the time of the initial public issue

and thereafter they can buy or sell the units of the scheme on the Stock Exchanges, if

they are listed. The market price at the stock exchange could vary from the scheme's

NAV on account of demand and supply situation, unit holders' expectations and other

market Factors.

INVESTMENT BASED MUTUAL FUNDS ARE:

GROWTH FUNDS- growth funds is to provide capital appreciation over the medium to

long term. Growth schemes are ideal for investors who have a long-term outlook and are

seeking growth over a period of time.

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INCOME FUNDS- The aim of Income Funds is to provide regular and steady income to

investors. Such schemes generally invest in fixed income securities such as bonds,

corporate debentures and Government securities. Income funds are ideal for regular

income and capital stability

BALANCED FUNDS- The aim of Balanced Funds is to provide both growth and regular

income. Such schemes periodically distribute a part of their earning and invest both in

equities and fixed income securities in the proportion indicated in their offer documents.

This proportion affects the risks and the returns associated with the balanced fund - in

case equities are allocated a higher proportion, investors would be exposed to risks

similar to that of the equity market.

MONEY MARKET FUNDS- The aim of Money Market Funds is to provide easy

liquidity, preservation of capital and moderate income. These schemes generally invest in

safer short-term instruments such as Treasury Bills, Certificates of Deposit, Commercial

Paper and Inter-Bank Call Money. Returns on these schemes may fluctuate depending

upon the interest rates prevailing in the market.

These are ideal for corporate and individual investors as a means to park their surplus funds for

short periods.

ADVANTAGES OF MUTUAL FUND

PORTFOLIO DIVERSIFICATION/RISK REDUCTION: An investor holds a diversified

portfolio even with a small amount of investment, which would otherwise require a big

capital. Further, the fund invests in diverse portfolios, hence reducing the riskiness of the

investments.

REDUCTION OF TRANSACTION COSTS: While investing through the funds, an

investor has the benefit of economies of scale; the funds incur lesser costs because of

larger volumes, a benefit passed on to its investor.

PROFESSIONAL MANAGEMENT: Mutual funds are managed by professional

management who has requisite skills and resources to analyze the various investment

options in these fast-moving, global and sophisticated markets.

LIQUIDITY: Often, investors hold shares or bonds they cannot directly, easily and

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quickly sell. If they invest in the units of a fund, they can generally cash their investment

any time, by selling their units to the fund if open-end, or selling them in the market if

the fund is close-end.

CONVENIENCE AND FLEXIBILITY: - Investors have the option of transferring their

holdings from one scheme to the other, get updated market information and so on.

FIXED DEPOSITS

Fixed deposit is made for those investors who want to deposit a lump sum amount of money for

a fixed period of time say a minimum of 15 days to 5 years and above there by earning a higher

rate of interest in return. Investors get a lump sum amount at the maturity at the deposit.

Banks fixed deposit are one of the common saving scheme open to an average investor. Fixed

deposits are one of the most common savings schemes open to an average investor. Fixed

deposits also give a higher rate of interest than a savings bank account.  The facilities vary from

bank to bank. Some of the facilities offered by banks are overdraft (loan) facility on the amount

deposited, premature withdrawal before maturity period (which involves a loss of interest) etc.

ULIP

ULIP stands for unit linked insurance plan. It is a kind of the life insurance where the policy

value at any time varies according to the value of the underlying assets at that time. It is a kind of

the policy which provides the benefit of protection with the flexibility in the investment. The

investment is denoted as units and is represented by the value that it has attained called as net

asset value (NAV). It is performance indicator of the fund. A fund’s NAV is calculated as total

assets minus expenses and divided by number of its total outstanding units. ULIP came into play

In 1960 and soon became popular in many countries in the world. The reason for the wide

popularity was because it is a very transparent scheme and the flexibility it offers in investments.

ADVANTAGES OF UNIT LINKED INSURANCE PLAN

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Simple, clear and easy to understand

Transparent and visible for customers to take decisions

Flexible and adaptable

Puts the policyholder in control

Policyholder gets the entire upside on the performance of his fund.

SIP

SIP is termed as systematic investment plan. In this the investor has the option of managing his

investments on the periodic basis and thus inculcates the regular saving habit. The investor has to

issue post dated cheques in favor of the fund and then gets the no. of units on the date of the

cheque. The number of units depends on the amount, the kind of fund and the NAV of that date.

SIP allows the investor to invest a prefixed amount with the scheme at set intervals, and derive

the benefit of fluctuating share prices and NAV. SIP works on the concept rupee cost averaging.

So if the NAV is high the entire investment is valued.

1.4 ROLE OF FINANCIAL ADVISOR

For this every institute or the bank provides the investor with a manager also called as a

relationship manager or the financial advisor who undertakes these jobs and design and looks

after the investment portfolio of the investor. It is the relationship manager who after listening

and studying the needs of the investor decides

What to buy

When to buy

What to sell

When to sell

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The role of the relationship manager or the financial advisor is very critical in the respect that he

is the one who makes the commitment to the investor on the behalf of his organization.

His job is to understand the needs and the goals of the investor properly prior to the decision of

investment and then decides that which strategy will work for the investor in terms of achieving

his goals and accordingly the investments are done. The relationship manager studies the

investment portfolio of the client on regular basis and also updates the investor about his

portfolio and market conditions. The relationship manager meets the client in regular intervals

and discusses about the satisfaction level of the investor, they discuss about the risk and return

and also about the prevailing market scenario. The relationship manager also guides the investor

about the new schemes prevailing in the market which could fetch him good returns with low

risk.

This may seem to be a very short process but the whole process is rather long and involves a lot

of study and deep thinking and decision making power.

The main emphasis while designing a particular portfolio is given to the following points:

Stock specific selection procedure based on research.

Focus on minimizing investment risk by following rigorous valuation

Capital preservation

Selling discipline and use of derivatives to control volatility

Enhance absolute returns for the investor

While designing a particular investment portfolio it becomes essential to know the client fully

like

To know about his future needs and desire

To know about the profile of the client which includes that currently what his source of

income, his family, his background in terms of whether he was ever involved in

investments and if yes then what kind, what were the returns.

To know about his risk appetite

To know about the kinds of returns expected.

To know about his current assets and liabilities

To know about his savings and expenditure

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To know the time period for which he wants to invest.

All these become the part of the personal financial review which is a kind of a form presented to

the investor during his meeting with the relationship manager.

Now with different kind of investors with different attitude and different demands there are

different kinds or styles of portfolios designed keeping in mind the risk and return appetite and

also the needs and demand of the investor for example

Growth

Value

Market neutral

Small capitalization

Indexed

As it is known that even the market plays a major role while designing the investor’s investment

portfolio, because market has the direct role in investment. While investing the money of the

investor the relationship manager has to keep in mind that the investment should be diversified

so that a downward trend in the particular sector does not effect the investment portfolio and it

can be covered by other sectors thus reducing the risk and increasing the returns.

Investment management is a part of wealth management services which are provided today by

various banks and other private institution. It is the growing trend.

1.5 INVESTMENT MANAGEMENT PROCESS

Investment management is six steps process

Determination of fit

Personal financial review

Financial planning

Investment management

Reporting and service

Periodic review and updating

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DETERMINATION OF FIT

This step includes the understanding and matching of the thoughts about the management of the

wealth of the client and looking for the best way out. It happens at the very first meeting with the

client. It is kind of the interaction where the client conveys his thoughts and looks for the

schemes or the products beneficial for him from his point of view.

PERSONAL FINANCIAL REVIEW

Every client is unique and deserves customized service, his needs and wants are different. Every

client has different attitude and different state of mind. So this is the first step to know about the

customer about his needs and his risk taking behavior. This further will help the portfolio

manager to decide upon his investment attitude.

Personalized financial review (PFR) is personalized to suit individual and hopes and aspirations.

The PFR assists in analyzing client’s financial situation and present and future needs by taking

into consideration his lifestyle, investment objectives, income stability, risk profile and financial

obligations.

A financial planner or portfolio manager or financial advisory manager uses the information to

help draw up a comprehensive financial plan that incorporates the most suitable financial

program that are available on the basis of best value to the client using a combination of deposits,

mutual funds, insurance schemes, FD’s and various other investments. The aim of the financial

advisors is to work closely with the client and achieve your financial goals.

Planning the life insurance, investment and pension program is the only way of ensuSring that

the financial objectives are achieved. The main area is identified and then it is worked upon by

the manager and it is worked out with mutual consent between the relationship manager and the

client. The investment pattern is prioritized according to the clients. From the personal financial

review it becomes easy to construct and understand the income and expenditure and the current

assets and liability portion.

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There is well defined format which is filled in by the client at the very 1 st or 2nd meeting. It is

kind of the form which contains questions about his family background, his needs, his liabilities,

his assets, and other information which makes it easier to know the client in a better way.

FINANCIAL PLANNING

The main concern of any individual are:

wealth accumulation-three key accumulation scenarios shared by investors are:

saving for retirement

sending children or grand children to college or school

Buying home or other properties to safe guard future.

Wealth preservation-managing the cash flow and taxes on the portfolio.

This includes the investment pattern where the core issues are tax planning, retirement planning

and estate planning and other issues like education savings and insurance protection. The

financial advisor works with the client to develop a long term investment strategy that is

designed to help the client preserve his wealth.

INVESTMENT MANAGEMENT

It consists of 2 integrated parts

Determining a strategic asset allocation

Investment allocation

Asset allocation is the distribution of assets among a variety of different asset categories such as

stocks, bonds, and cash equivalent instruments. At the foundation of a comprehensive wealth

management approach is an asset allocation strategy. The principle of asset allocation offers

investors several potential advantages:

Reducing emotional response to market volatility, allowing you to stay invested over the

long term.

Helping to minimize overall portfolio risk for a given level of return.

Seeking to provide more consistent long-term performance that can improve the

likelihood of achieving a desired investment goal over time.

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Encouraging a long-term investment perspective.

REPORTING AND SERVICE

Once the portfolio is discussed and designed by the investor and the capital is divided in the

different asset classes. After this the financial advisor has to update the client about his portfolio

in regular interval of time. It becomes the prime duty of the financial advisor to be in touch with

the client and report him with major up’s and down’s in the market and hence in the portfolio.

If the financial advisor feels the need of adding the stocks to his portfolio or to remove some of

the stock, he first needs to consult the client before taking any decisions.

The financial advisor meets the client either weekly, monthly or the meetings are conducted on

semiannual basis.

PERIODIC REVIEW

Once you have an established portfolio, you need to analyze and rebalance it periodically

because the market is very volatile and market movements may cause the initial weightings to

change.

The other factors that are likely to change over time are:

Current financial situation

Future needs

Risk tolerance

If at any point of time the financial advisor or the investor feels the need to revise his portfolio in

terms of the prevailing marketing condition or due to some reasons he can revise his portfolio

with the help of the financial advisor.

Portfolio revision is basically selling some of the stocks and buying the stocks or investing more

due to the reasons of risk and returns or may be the investor is in the urgent need of the liquid or

cash. It is analyzing all the factors which effects the portfolio directly or indirectly.

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1 . 6 IMPORTANCE OF DIVERSIFICATION IN THE INVESTMENT OR

THE INVESTMENT PORTFOLIO

Diversification is the key to growth in respect of investments. While deciding on the investment

avenues it is the prime factor to be kept in mind. It is not enough to own securities from each

asset class but there should be diversification within each of these asset classes.

Investors can achieve excellent diversification by investing in mutual funds. This kind of

investment vehicles allow the individual investors to attain economies of scale because of the

large amount money of many investors being invested in different categories and this is the

reason why a small investor with small amount money will not be able to produce the same

results as above.

2. COMPANY PROFILE

2.1INTRODUCTION

Bank is a financial institution that acts as a payment agent for customers, and borrows and lends

money.

The first modern bank was founded in Italy in Genoa in 1406; its name was Banco di San

Giorgio (Bank of St. George). The first bank in India through

Bank majorly act as a payment agents by conducting checking for current accounts for customers

on the bank, and collecting cheques deposited to customer’s accounts. Banks also enable

customer payments via other payment methods such as telegraphic transfer and ATM.

Bank’s activities can be divided into

RETAIL BANKING- dealing directly with individuals and small businesses.

BUSINESS BANKING- providing services to mid market business

CORPORATE BANKING- directed at large business entities.

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PRIVATE BANKING- providing wealth management services to high net worth individuals and

families

INVESTMENT BANKING- relating to activities on financial market.

Most banks are profit making, private enterprises. Whereas some banks are owned by

government or are non profit making.

2.2 INTRODUCTION OF THE ORGANIZATION

HSBC-“THE WORLD’S LOCAL BANK ”

“HSBC” which is actually HONGKONG AND SHANGHAI banking corporation limited. It’s

presence in India dates back to 1853 when the mercantile bank of India was established In

Mumbai.

HSBC’s international network comprises over 10000 offices in 83 countries and territories in

Europe, Asia-pacific region, Americas, the middle east and Africa with headquarters in London.

The shares are traded on NEW YORK stock exchange in the form of American depository

receipt.

HSBC is one of the largest banking and financial services organization in the world. Through an

international network linked by advanced technology, including a rapidly growing e-commerce

capability it provides a comprehensive range of financial services like

Personal financial services

Commercial banking

Investment banking which in general terms is also known as portfolio designing or

portfolio management under wealth management services.

Private banking

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The HSBC group is named after its founding member, the HONGKONG AND SHANGAI

banking corporation limited. It was established in 1865 to finance the growing trade between

china and Europe.

In India this group offers a comprehensive suite of world class products and services to its

corporate and commercial banking clients and is also growing fast in personal banking.

2.3 ENTITIES PRESENT IN INDIA

PRIVATE EQIUTY-HSBC private equity management (Mauritius) limited a subsidiary of

HSBC private equity (Asia) limited in Hong Kong, has a liaison office in Mumbai. The company

specializes in provision of equity capital to unlisted growth companies in India and Srilanka.

AUDIT SERVICES- HSBC professional service (India) private limited provides internal audit

unit worldwide with particular emphasis on it, treasury, asset management, private banking and

insurance functions.

INVESTMENT BANKING- HSBC securities and capital markets (India) private limited has two

main business lines. It’s institutional and proprietary, broking services are based in Mumbai and

has seat on two of India’s primer stock exchange, the Bombay stock exchange and national stock

exchange. It deals in the Indian securities for both Indian and international institutions and for

select retail clients and is backed by extensive research team. The corporate finance and advisory

business with office in Mumbai and new Delhi, offers a full range of integrated investment

banking services in India and internationally Software development- HSBC software

development (India) private limited has established a software centre in Pune to develop

solutions for HSBC’s group office worldwide.

FINANCIAL PLANNING SERVICES- inflation falling interest rates and fluctuating market

conditions entails to plan the finance carefully. HSBC financial planning services offer

assistance to secure the future.

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HSBC PREMIER- HSBC premier is all about the finer aspects of relationship banking. It

embraces a rage of benefits combining global expertise with local understanding.

2.4PRODUCTS AND SERVICES OF HSBC

Saving account

Current account

Fixed deposit

ULIP

SIP

Insurance

My term credit loans

Credit card

Criti care

HSBC SAVING ACCOUNT

The different types of saving account offered by HSBC are:

HSBC PREMIER ACCOUNT

POWER VANTAGE ACCOUNT

MASS MARKET ACCOUNT

HSBC PREMIER

HSBC premier is one of the world’s first linked up banking service that enables you to explore

and seize rich opportunities the world has to offer. At the heart of premier linked up banking, lies

the network of over 250 international premier centers. In every single one of them the client is

recognized by someone who is qualified to resolve the problems as quickly as a customer would

expect back home. HSBC helps the premier clients with basic banking transactions and with

preferential access to phone banking and internet banking services.

With HSBC premier, have a dedicated relationship manager, who, supported by a team of

experienced financial experts, gains thorough understanding of client’s current needs, risk profile

and future financial goals to help and develop personalized wealth management solutions. The

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relationship manager will suggest different investment avenues that suit the profile and helps in

deriving optimum returns on the investments. The premier relationship manager is the single

point of contact with the bank and takes care of all the banking needs of the customer. The

various other benefits and privileges provided by HSBC under premier are:

24*7 BANKING- the banking services can be availed through personal telephone all 24

hours and 7 days a week.

HOME BANKING- the client is entitled to the privileges of banking from the comforts

of the home. It offers physical delivery of cash and cheques, drafts etc.

NO BOUNCE CHEQUE PROTECTION-“no bounce cheque protection” of up to 100000

rupees is also one of the benefits provided to the premier customer.

SAFE DEPOSIT LOCKER SERVICE

HSBC PREMIER DEBIT CARD-with the debit card the withdrawal of rupees 1, 00,000

in a day from any visa or HSBC ATM without any charges.

EXCLUSIVE HSBC PREMIER CENTRES- the premier customer has an access to the

exclusive premier centers around the world in 33 countries where he can obtain money

with ease, seek assistance, and conduct banking transactions.

HSBC PREMIER MASTER CREDIT CARD- an approved HSBC premier master credit

card which has a minimum limit of rupees 2, 00,000.

GLOBAL PREVILIGES-various global privileges like:

o Exchange foreign currency without any commission at any branch of HSBC that handles

foreign currency exchange.

o Avail of emergency encashment service as an able backup in case of loss of card or

money during travel

o Air travel, hotel, and car hire reservation

o Medical and dental referral services

o Track lost luggage

o Information to help to know the destination better, even before the arrival.

POWER VANTAGE

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HSBC's Power Vantage Account is a proposition that offers, amongst other benefits, a feature

called the Personalized Financial Review (PFR). A trained Financial Planner uses the PFR to

help you evaluate your finances, identify your current and future financial needs and assist you in

drawing up a plan to meet them. While analyzing your current and future need we take into

consideration your lifestyle, investment objectives, income stability, risk profile and financial

obligations. Under Power Vantage account all the avenues of investment are available to a client

All these sets it apart from other ordinary banking accounts.

FEATURES OF POWER VANTAGE ACCOUNT

A Power Vantage Relationship Manager to there to assist the client in their banking and

financial planning needs

Unlimited free transactions (cash withdrawals and balance enquiries) at 23,500 HSBC

and non - HSBC Visa ATMs in India using your Power Vantage debit card

Dedicated Service Desk and Teller Counters to assist you with your banking needs,

enabling you to save time

Higher cash withdrawal limit of up to Rs. 50,000 and funds transfer up to Rs. 100,000

with your Power Vantage debit card, across 23,500 HSBC and non-HSBC Visa ATMs in

India and more than 1 million ATMs overseas

Use your Power Vantage debit card for purchases of up to Rs. 50,000 per day at over

350,000 merchant establishments in India and over 26 million such establishments

overseas

Free Cheques Payable at Par (CPP) facility in all cities where HSBC has branches,

helping you save on out-station clearing time and costs

No-bounce Cheque Protection which means cheques presented through clearing

irrespective of funds available, will be honored (overdrawing of a maximum of Rs.

10,000)

Monthly Composite Statement giving you a snapshot of all deposits and loans

Joining fee waiver and 50% off on the annual fee for your credit card

MASS MARKET ACCOUNT

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It is the kind of the account which targets the large mass of people who has a balance of less than

rupees 100000 and maintaining the average quarterly balance of rupees 25000.

FIXED DEPOSIT

fixed deposit is made for those investors who want to deposit a lump sum amount of money for a

fixed period of time say a minimum of 15 days to 5 years and above there by earning a higher

rate of interest in return. Investors get a lump sum amount at the maturity at the deposit.

Banks fixed deposit are one of the common saving scheme open to an average investor. Fixed

deposits are one of the most common savings schemes open to an average investor. Fixed

deposits also give a higher rate of interest than a savings bank account.  The facilities vary from

bank to bank. Some of the facilities offered by banks are overdraft (loan) facility on the amount

deposited, premature withdrawal before maturity period (which involves a loss of interest) etc.

ULIP-UNIT LINKED INSURANCE PLAN

ULIP stands for unit linked insurance plan. It is a kind of the life insurance where the policy

value at any time varies according to the value of the underlying assets at that time. It is a kind of

the policy which provides the benefit of protection with the flexibility in the investment. The

investment is denoted as units and is represented by the value that it has attained called as net

asset value (NAV). It is performance indicator of the fund. A fund’s NAV is calculated as total

assets minus expenses and divided by number of its total outstanding units. ULIP came into play

In 1960 and soon became popular in many countries in the world. The reason for the wide

popularity was because it is a very transparent scheme and the flexibility it offers in investments.

SIP-SYSTEMATIC INVESTMENT PLAN

SIP is termed as systematic investment plan. In this the investor has the option of managing his

investments on the periodic basis and thus inculcates the regular saving habit. The investor has to

issue post dated cheques in favor of the fund and then gets the no. of units on the date of the

cheque. The number of units depends on the amount, the kind of fund and the NAV of that date.

SIP allows the investor to invest a prefixed amount with the scheme at set intervals, and derive

the benefit of fluctuating share prices and NAV. SIP works on the concept rupee cost averaging.

So if the NAV is high the entire investment is valued.

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INSURANCE

Insurance, in law and economics, is a form of risk management primarily used to hedge against

the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss,

from one entity to another, in exchange for a premium. Insurer is the company that sells the

insurance. Insurance rate is a factor used to determine the amount called premium.

Different types of insurance provided by HSBC are:

Insurance for single

Insurance for married

Family insurance

Retirement insurance

Life insurance

Nirvana pension plan

Loan repayment protection insurance

Non life insurance

Travel guard

Home secure

Maharaksha personal injury policy

MY TERM CREDIT LOANS

My term credit loan is the only personal loan which lets you choose how to repay. It is Just like

a friend who lets you to repay the way you want. My Terms Credit Personal Loan gives client 4

easy repayment options, from which the client can select one that suits him the best. Loan covers

financing marriage, furnishing home or a family holiday. It's just like borrowing money from a

friend.

FETURES AND BENEFITS

Lower EMI in the first year

Interest on utilized amount only, not on the entire loan

Last EMI waiver

Standard EMI repayment

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CREDIT CARDS

A credit card is a plastic card that is issued by the bank authorizing payment for purchases and an

interest is charged on the outstanding balance. The card is issued by the bank which allows the

holder to buy goods and pay for them latter. HSBC provides 52 days of credit period by which a

customer has to pay back the amount, but if the customer does not pays back the amount till the

due date he is charged by the bank.

There are two types of credit card in which HSBC deals in:

HSBC gold credit card

HSBC classic credit card

FETURES AND BENEFITS

0% fuel surcharge

Lower interest options

Balance transfer facility

Loan on phone

Travel cash back

CRITICARE

Criti Care is a special product of HSBC which is provided only to existing HSBC clients.

These could be the account holders or a credit card holder of HSBC. CritiCare is basically an

illness insurance policy, which allows a client to nurse himself back to good health without

financial burdens about his medical expenses. It is a group insurance policy from TATA AIG

GENERAL INSURANCE COMPANY Ltd., it covers 11 critical illnesses and surgeries.

11 diseases that are covered under Criti Care are :

First heart attack

Stroke

Cancer (excluding skin cancer)

Kidney failure

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Major organ transplant

Coma

Major burn (75%)

Multiple sclerosis

Paralysis

Total blindness

Features

A client becomes eligible for the claim on the policy at the first diagnosis only

No pretest is required

Second opinion is provided

Tax exempted premium.

MAIN TEXT

3.1 OBJECTIVES

To study the profile of the HSBC clients

To analyze the pattern of investments of HSBC clients

To study the investment portfolio of special clients of HSBC.

To study the major factors influencing investment pattern.

To suggest the various measures for HSBC clients based upon the finding of the study.

3.2 SCOPE OF STUDY

The area covered under the project study was Jaipur. The study was conducted through

questionnaires and interaction with the investors. The questionnaire was filled by different

investors who were the existing clients of HSBC from different part of the city. The interaction

was done with the walk in customers of HSBC.

3.3 RESEARCH DESIGN

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The research design constitutes the blueprint for the collection, measurement and analysis of the

data. Basically research design is the plan and structure of investigation, so conceived as to

obtain answers to the research questions.

The kind of research design used for the completion of our project study is a combination of

exploratory and descriptive.

Exploratory study- it is a kind of study in which the researcher is not clear with the idea of

problem. Exploratory study helps the researcher to develop the concepts more clearly, establish

priorities, develop operational definitions, and improve the final research design.

3.4 SAMPLING PROCEDURE

The basic idea of sampling is that by selecting some of the elements in a population, we may

draw conclusions about the entire population. It is an essential part of research process.

Convenience sampling- The selection of units from the population based on their easy

availability and accessibility to the researcher.

Convenience sampling is best used in surveys dealing with an exploratory purpose for generating

ideas and hypothesis. In our study we have also used this kind of sampling because majorly the

respondents were walking customers of the bank.

3.5 SAMPLE SIZE: the sample size taken for the research study is 100(respondents)

3.6 DATA COLLECTION

Data collection for the research and to fulfill the objective will be done through

Primary sources

Secondary sources

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Under primary sources it includes questionnaire which will be filled by the investors as well as

the financial advisors. The respondents of my questionnaire will restrict to HSBC only. The

questionnaire compromises of the close ended.

The sample size taken for this is 100 respondents who are the clients of HSBC and the sampling

done is the convenient sampling.

The reason for preparing a questionnaire is that after analysis I will be able to present the data

about exactly what kind of investment does an investor prefers to do.

The data from secondary sources will be collected through various published and unpublished

sources

3.7 DATA ANALYSIS AND DATA INTERPRETATION

Data interpretation will be done through statistical tools like

Bar graphs

Pie charts

Hypothesis testing

In the hypothesis testing, we use two kinds of hypothesis first the null hypothesis and the other

one is the alternative hypothesis.

NULL HYPOTHESIS (Ho): it is the statement that that says that there exists no difference

between the parameter (a measure taken by a census of the population and prior measurement of

a sample of the population) and the statistic being compared to it (a measure from a recently

drawn sample of the population)

ALTERNATIVE HYPOTHESIS (Ha): it is the statement that says that there exists a

difference between the parameter (a measure taken by a census of the population and prior

measurement of a sample of the population) and the statistic being compared to it (a measure

from a recently drawn sample of the population). A alternative hypothesis is the logical opposite

of the null hypothesis.

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PHASE I

DATA ANALYSIS THROUGH GRAPHS AND CHARTS

20-29 years 30-39 years 40-49 years 50 & above

48 22 17 13

1. INVESTORS FROM DIFFETERNT AGE GROUP

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Interpretation

Total no of respondents taken were 100

The pie chart above indicates that the most of the investors are from the age group of 20 -29

years, out of the 100 respondents almost half falls in this category that is 48. This is due to the

availability of more versatile avenues available in the market as well as due to increasing

knowledge about these products. This age group trusts in multiplication of money.

This age group is followed by 22 respondents from the age group of 30-39. The next two are 17

respondents from 40-49 and the least number of respondents from 50 and above age group.

BUSINESS SERVICE PROFESSIONAL OTHERS

45 45 10 0

2. INVESTORS FROM DIFFERENT INCOME SOURCE

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Interpretation

The figures and the pie chart states that majority of the investor are from either the business or

service background. The distribution of the investors in these categories is equal. Out the 100

respondents 45 investors own the business and 45 are into service, the remaining 10 investors

were professional like lawyers and C.A.

The investor from other category is blank due to the reason that it was convenient sample and

investors from this category were not found but this does not say that the persons belonging to

this category does not invest.

3. FINANCIAL DEPENDENTS ON THE INVESTOR

NUMBER OF DEPENDENTS NUMBER OF RESPONDENTS

NO DEPENDENTS 31

1-2 DEPENDENTS 27

3-4 DEPENDENTS 28

5 OR MORE DEPENDENTS 2

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Interpretation

Most of the investor has none of the persons dependent on them. This may be due to the reasons

that as the major age group of people as respondents were from the age group of 20 -29 years,

which has rather less burden in terms of family and kids or it could be due to the fact that both

the spouses are working.

This was followed by the respondents which have 1-4 persons as dependents as this can be

thought upon as most of the families are nuclear.

4. RISK TAKING ABILITY OF THE INVESTORS

HIGH RISK TAKER LOW RISK TAKER RISK AVOIDER

37 45 18

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Interpretation

The graph above shows that there are very few investors who believe in avoiding risk while

investing in different investment avenues. Out of the 100 respondents only 18 respondents were

such who are risk avoiders remaining 82 persons out 100 believed in taking risk as it is very

much associated with investments and the returns. Of these 82 respondents, 45 respondents

which is almost the half of the total no of respondents belonged to low risk taker and the rest 37

were from the category of high risk taking.

As it has been already interpreted above that the major proportion is those of low risk taker. Here

the investors majorly invest their wealth in mutual funds, debts or fixed deposits.

5. INVESTORS INVESTING FROM PAST YEARS

INITIAL STARTER 1-3 YEARS 4-6 YEARS 7 OR MORE

20 42 27 11

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Interpretation

The graph shows that the majority of the investors are investing from past 1-3 years. The

numbers of respondents out 100 who are investing from last 1- 3 years are 42 investors; it is then

followed by almost equal but small number of investors investing from either 4-6 years or is the

initial starter. 27 investors out of the total were investing from 4-6 years and 20 investors have

just started investing. The least number of investors fall in the category who are old investors

investing from last 7 or more years. The numbers of these investors were found out to be 11.

The reason for the above result which shows majority of investors investing fro past 1-3 years

could be that HSBC is comparatively new bank in Jaipur and this stusy restricts only to HSBC

clients only.

6. PROPORTION OF INCOME DIVERTED TOWARDS PAYMENT OF LOANS AND

LIABILITY.

10%&LESS

THAN 10%

11-20% 21-30% MORE THAN

30%

51 34 12 3

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Interpretation

The graph says that out of the 100 respondents more than half of the respondents fall in the

category wherein the respondents have small liabilities on him and most of the amount can be

invested.

34 respondents are those whose 11-20% of the income goes in paying the liabilities.12

respondents are those paying loans and liabilities of 21-30% and a negligible no of people have

the liabilities of 31% or more.

7. PROPORTION OF SAVINGS GOING INTO INVESTMENTS

25% OR LESS THAN 25% 26

26-50% 29

51-75% 37

75% AND ABOVE 8

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Interpretation

Everybody saves some proportion of the income looking at the present and the future needs and

tries to judicially invest the saving for the purpose of keeping the principal amount intact,

looking forward for growth and multiplication of the money, and its easy liquidity. The saving is

also invested keeping in mind the risk that can be taken by the investor.

There are 37 respondents who say that they invest 51-75% of their saving whereas there are 29

who invests 26-50% and 26 investors invests 25% or less than 25% of their savings. A very less

no. of 8 respondents invests 76% or more of their savings.

8. PREFERRED TIME HORIZON OF THE INVESTOR FOR THE INVESTMENT

1-2 YEARS 3-5 YEARS 6-10 YEARS MORE THAN 10

YEARS

27 40 13 20

40

Interpretation

Preferred time horizon for investment is the time for which an investor wants to keep his

investment in the different avenues. It is the average time period for which the investment

portfolio in different investment avenues remains the same. As it is clearly indicated in the table

and the graph that the major respondents are those who wants to keep their investments for

approximately 3-5 years which is actually neither a very short period for keeping the investments

nor very long. This is then followed by those who keep their investments for relatively short time

of 1-2 years with the number falling in this category are 27 respondents.

Almost similar to these number 20 respondents are those who are long time investors who keep

their investments for approximately for more than 10 years. 13 respondents are those who keep

their investments for relatively long period of 6- 10 years.

9. KNOWLEDGE REGARDING THE INVESTMENT AVENUES

EXCELLENT 12

GOOD 51

AVERAGE 29

41

POOR 8

Interpretation

The pie chart and figures make it very clear that majority of the investor have good knowledge

about the different investment avenues. The figures for this are 51 falling in the category of good

knowledge,29 in the category of average, 12 in the category of excellent and only 8 In the

category of poor knowledge about the investment and its different investment avenues.

These figures speaks that in the present scenario where everybody do investments, there is a fair

knowledge about the investment and the avenues of the investments. The help is also rendered by

different institutions and banks which help the investor in guiding on the right path.

10. FREQUENCY OF INVESTMENTS OF THE INVESTORS

WITHIN 4 MONTHS 5-8 MONTHS 9-12 MONTHS MORE THAN 12

MONTHS

32 18 35 15

42

Interpretation

As the figures from the table itself speaks that most of the investors investing in different

avenues of investment, invest within 9 to 12 months. The least number of investors are those

who invest with the frequency of investing in more than 12 months. The frequency of investment

within 9-12 months may be because of tax planning and a handsome amount of money can be

invested when accumulated throughout the whole year.

There is equal number of distribution within the two categories of frequency of investments,

within 4 months and 5-8 months. 32 respondents are those which invest within 4 months and

with not much difference 35 are those who invest within 9-12 months. 5- 8 months constitutes 18

respondents and more than 12 months constitutes 15 respondents out of the total number of 100

respondents surveyed.

11. APPROXIMATE SIZE OF INVESTMET PORTFOLIO OF THE INVESTORS OF HSBC

0-20 LAC 21-40 LAC 41-60 LAC 61 AND ABOVE

65 27 5 3

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Interpretation

Although 0-20 lac of investments is considered to be small investments but still the major

number occupied this group of investments. As this group may be occupying the highest number

of 65 respondents out of the total 100 respondents but this does not prove that only small

investors exists but it says that the majority of the investors belong to this group. There may be a

case wherein the investor might have invested his money through different banks and institution

but this study restricts only to HSBC.

Following this category is the one with the investments of 21-40 lacs and the numbers of

respondents from this group are 27. The next two groups are 41-60 lac and 61 and above are 5

and 3 respectively.

12. INVESTMENTS AVENUES IN THE CURRENT PORTFOLIO OF THE CLIENTS

MUTUAL FIXED DIRECT DEBT ULIP SIP ELSS

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FUNDS DEPOSITS INVESTMENT

IN EQUITY

78 75 51 31 50 51 18

Interpretation

The graph makes it very clear that among the different categories of investment avenues the

most preferred avenues are the mutual funds and the fixed deposits. Almost equal number of

respondents had investments in these avenues. The numbers of respondents preferring these

avenues are 78 for mutual funds and 75 for fixed deposits, which is one third of the respondents

being surveyed. The next three avenues which hold the equal position in the investor’s

preference are investments in equity, ULIP (unit linked insurance plan), SIP (systematic

investment plan). The number of respondents responded to these avenues were half that is 50

respondents. The least preferred one were debt and ELSS (equity linked saving scheme) with 31

and 18 respondents respectively.

These figures shows that the investor believes in multiplication of the money, preservation of the

capital and growth keeping the principal amount intact by taking low risk.

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13. WEALTH DIVIDED IN DIFFERENT INVESTMENT AVENUES CONTAINED IN

THE CURRENT PORTFOLIO

INVESTMENT AVENUES 1-20% 21-40% 41-60% 61-80% 81-100%

MUTUAL FUNDS 28 40 8 0 2

FIXED DEPOSITS 22 32 14 4 0

DIRECT INVESTMENT IN EQUITY 22 23 2 2 1

DEBT 27 4 0 0 0

ULIP 42 4 0 0 0

SIP 27 24 2 1 0

Interpretation

The graph and figures shows that major part of the investments goes into the mutual funds

followed by fixed deposits. This may be due to the low risk attached to these avenues.

Although lot of investors invests in ULIP but the proportion of investment is considerably low

this is around 1-20% and that too because of the tax saving purpose

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14. RETURNS FROM THE CURRENT PORTFOLIO

Up to 20% 21-30% 31-40% 41 and above

50 40 8 2

Interpretation

Out of 100 respondents, half of the respondents belong to that group wherein the investor re

getting up to 20% of returns from their current portfolio. The closest to this is that category

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where 40 respondents who are getting 21-30% returns from their current portfolio. Only 8

respondents are getting return of 31-40% and the negligible number falls in the category of 41%

and above.

The return from the investments depends on various things like the investment avenues, time

horizon for the investment, and the risk appetite, market trends and diversification of the

investments.

15. EXTENT TO WHICH SENSEX AND OTHER GLOBAL CUES EFFECT THE

INVESTMENTS OF THE INVESTORS

0-20% 21-40% 41-60% 61-80% 81-100%

30 42 12 13 3

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Interpretation

The majority of the respondents feel that the SENSEX and other global cues effect their

investments by 21-40%. The numbers of respondents feeling this are 42 and the next 30

respondents feel that their investments are affected by these changes up to 20%. 41-60% and 61-

80% effect is felt by 12 and 13 respondents respectively, which are equal in number.

Out of 100 respondents only 3 investors feel that their investments are effected by 80- 100%.

Every investment portfolio is affected by changes in SENSEX and other global cues but the

extent of effect depends on avenues in which the investment is done.

16. NEEDS FOR INVESTMENT AND THEIR PREFERENCE

Rank 1 Rank 2 Rank 3 Rank 4 Rank 5

MAXIMIZE

RETURNS

69 12 7 3 3

SAVING

TAXES

21 36 14 12 12

KIDS

PLANNING

13 20 14 16 32

FAMILY

PLANNING

16 20 19 16 21

BUILDING

CORPUS

18 25 21 11 19

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Interpretation

69 respondents have marked maximization of returns as the very first choice for investment. The

second choice followed by this is for the tax saving purpose with 36 respondents responding

towards it. Others are almost rated equally (kids planning rated as least prioritized need for

investments).

By looking at the graph we can very well interpret that the primary aim of investment of most of

the investor is maximization of the returns that is multiplication of the money or earning returns

on the principal amount keeping the principal amount intact.

17. FACTORS AFFECTING THE INVESTMENT PORTFOLIO ACCORDING TO THE

PREFERENCE NEEDS OF THE INVESTORS

RANK 1 RANK 2 RANK 3 RANK 4 RANK 5 RANK 6 RANK 7

RISK 44 22 10 11 7 4 2

GROWTH 50 29 10 4 2 5 0

MARKET 30 14 34 15 3 2 2

INCOME 26 28 18 23 1 1 3

OCCUPATION 14 13 13 9 34 7 4

AGE 10 7 9 11 13 32 12

50

OTHERS 4 4 2 8 10 14 52

Interpretation

The major factors affecting the investment portfolio of the investors are risk, growth, market,

income, occupation, age, and others like family size and marital status. Among them growth is

ranked as 1st by 50 investors as majorly the objective of people is to multiply their wealth .The

next factor following this is risk which is ranked 1st by 44 investors as risk is associated with the

returns and which is an integral part of the investments.

The factor following risk and growth is the market trends which effect the investments of the

investors. According to the investors the factor least affecting the investment decisions are age

group and others like family size and marital status. This was ranked as last by 52 investors for

others and 32 investors rated age as 6th.

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18. INVESTMENT AVENUES IN AN IDEAL PORTFOLIO DEPENDING ON THE

PREFERENCE NEEDS

RANK 1 RANK 2 RANK 3 RANK 4 RANK 5 RANK 6 RANK 7

REAL ESTATE 56 10 9 6 5 3 9

GOLD 6 28 6 14 13 16 12

MUTUAL

FUNDS

26 39 18 8 1 0 3

FIXED

DEPOSITS

24 18 22 10 6 6 8

DIRECT

INVESTMENT

IN EQUITY

20 27 13 17 14 2 2

DEBT 2 14 10 19 20 20 9

ULIP 3 12 12 12 7 9 39

Interpretation

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The graph shows that in a ideal portfolio respondents feel that real estate is the best option to be

invested ideally, for this the figures are 56.the second most prioritized by the investor is mutual

funds with 39 respondents giving it 2nd rank and 26 giving it 1st rank.

The reason behind the investment in real estate and mutual funds because of moderate risk

attached to it with higher returns.

Among the least prioritized one are ULIP (unit linked insurance plan).the respondents

responding for ULIP giving it 7th rank are 39.

Debt and gold are also not given preference by the investors to be covered in ideal portfolio.

Although the investment in debt and gold is comparatively less as compared to other investment

avenues available in the market still people invest a little amount of their wealth in these avenues

for the safety of principal.

19. PREFERENCE OF PEOPLE TOWARDS DIFFERENT INVESTMENT AVENUES IN

THE PRESENT MARKET SCENARIO

INVESTMENT AVENUES RESPONDENTS

REAL ESTATE 70

COMMODITIES 18

MUTUAL FUNDS 48

DIRECT INVESTMENT IN EQUITY 30

FIXED DEPOSITS 38

DEBT 13

INSURANCE 32

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Interpretation

It can be interpreted from the graph the major proportion of the investor states real estate their

choice, the reason being the up and down trends prevailing in the market with lot of risk attached

to the investments without any security for even the principal amount. Also it shows that the

investor know that land is one avenue which never depreciates giving him the sense of security

and adding more assets to his balance sheet.

Following this is mutual funds which do depend on the market fluctuations but still with low risk

attached to the investment.

Fixed deposits, insurance are almost equally favored because fixed deposits provides with the

easy liquidation and the other with the protection and safety.

The figures supporting the statement are: 70 for real estate, 48 for mutual funds, 38 for fixed

deposit and 35 for insurance.

PHASE II

COLLECTIVE ANALYSIS

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As stated above that the study restricts only to HSBC clients and more over it was a convenient

sampling. After the analysis was done it can be summed up that the major group of investors out

of the 100 being surveyed belonged to the age group of 20-29 years. This can be due to various

reasons like that it was more of the young crowd that participated and helped us in filling the

questionnaires, it can be also said that it is the young generations who are more cautious about

the brand image, technology and the non banking services and hence choosing HSBC which is

no.1 international bank as ranked by KPMG.

The reason for choosing wealth management services by this age group could be for the

multiplication of money, safeguarding the future, personalized services.

During the analysis it also came out that most of the investor preferred taking low risk this could

be because of the prevailing market conditions, like the downward trend in SENSEX and

unstable market conditions also because of dollar depreciation. Most of the investors feel that

SENSEX and other global cues effect their investment by 21-40%.

The study also revealed that most of the investors either had their own business or they belonged

to the service background. The time horizon preferred by them was 3-5 years which is neither a

very long term investment nor a very short term investment. Majorly the investors invest in the

avenues like mutual funds, fixed deposits which have low risk attached to it. The other reasons

for investing in these avenues are easy liquidity, multiplication of money. Almost 40-50% of the

money for the investment goes in these avenues. Small investments are also done in ULIP which

are also contained in the existing portfolio of the HSBC clients. ULIP is favored by the investor

as an avenue for investment because it is the product which provides the benefit of both the

insurance and investment. Majorly the investment portfolio size of the investor was 20 lac which

is although a small portfolio but there were clients who had the portfolio of above 50 lac but very

few high end clients were surveyed due to the scope of the study. The returns coming from the

current portfolio is up to 20%. There were investors who said that they are getting higher returns

but the majority of them fall in the category of 20%.

Investment depends on the various factors which influence it either directly or indirectly. Various

factors were rated by the investor and among those the most influencing factor was risk and

55

returns, which are the integral part of the investments. Among the factors which were least

prioritized were family size and marital status.

Talking about the investment preference needs of the investor, the prime need came out of the

study was maximization of the returns (multiplication of the wealth) followed by tax saving

purposes. Other like family planning and kids planning was not given much importance because

the major age group was 20-29 years of age.

The study also gave the idea about the part of savings which goes into investment. The result

came out to be that almost 70% of the investor invests their one-third of the savings. The

frequency of investments is 9-12 months i.e. within a year.

When the respondents were asked that what all avenues do they prefer looking at the present

market condition and in which avenue will they invest the most in the present time. The

collective result for this came out to be that 70% of the investors said that they will go for real

estate as it is one avenue where there is no depreciation. This choice of avenue was followed by

mutual funds and fixed deposits.

Ideally according to the study and investors responses the investment should be in real estate,

mutual funds and fixed deposits as there is low risk attached to these avenues. Although

investment in equity fetches good returns but the amount of risk attached with it is very high.

During the investment one thing should be clear that investments should be diversified and it

should not restrict to only few of the sectors because diversification lowers down the risk and

also increases the returns.

PHASE III

HYPOTHESIS TESTING

The hypothesis taken for the study was whether there is any significant relationship between the

factors affecting the investment portfolio and the choosing of the investment avenues.

THE NULL HPOTHESIS TAKEN IS (H0)

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There is no significant relationship between the factors affecting the investment portfolio and the

choosing of the investment avenues.

THE ALTERNATIVE HYPOTHESIS TAKEN IS (H1)

There is significant relationship between the factors affecting the investment portfolio and the

choosing of the investment avenues.

Chi square test will be applied for finding the hypothesis.

TABLE-1

RISK MARKET GROWTH INCOME

RANK 1 44 50 30 26

RANK 2 22 29 14 28

RANK 3 10 10 34 18

RANK 4 11 4 15 23

RANK 5 7 2 3 1

RANK 6 4 5 2 1

RANK 7 2 0 2 3

Degree of freedom

= (Number of rows-1)*(number of coloumns-1)

=(R-1)*(C-1)

= (7-1)*(4-1)

= (6)*(3)

So, D.F. =18

Confidence level =.95

Value=9.390

R = rows

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C =columns

Fo =observed frequency

Fe = expected frequency

TABLE-2

ROWS COLOUMNS Fo Fe=RT*CT/N Fo-Fe (Fo-Fe)^2/Fe

1 1 44 37.5 6.5 1.126

1 2 50 37.5 12.5 4.166

1 3 30 37.5 -7.5 1.5

1 4 26 37.5 11.5 3.526

2 1 22 23.25 -1.25 0.06

2 2 29 23.25 5.75 1.422

2 3 14 23.25 9.25 3.68

2 4 28 23.25 4.75 0.97

3 1 10 18 -8 3.555

3 2 10 18 -8 3.555

3 3 34 18 16 14.22

3 4 18 18 0 0

4 1 11 13.25 -2.25 0.382

4 2 4 13.25 -9.25 6.457

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CONFIDENCE LEVEL

4 3 15 13.25 1.75 0.2311

4 4 23 13.25 9.75 7.174

5 1 7 3.25 3.75 4.326

5 2 2 3.25 -1.25 0.48

5 3 3 3.25 -0.25 0.0192

5 4 1 3.25 -2.25 1.557

6 1 4 3 1 0.333

6 2 5 3 2 1.333

6 3 2 3 -1 0.333

6 4 1 3 -2 1.333

7 1 2 1.75 0.25 0.035

7 2 0 1.75 -1.75 1.75

7 3 2 1.75 0.25 0.035

7 4 3 1.75 1.25 0.8928

64.4511

Tabulated value=9.390

Calculated value=64.4511

INTERPRETATION: since the calculated value is more than the tabulated value, the null (Ho)

hypothesis which was taken is rejected, whereas the alternate hypothesis (Ha) is accepted which

means that there is a significant relationship between the factors affecting the investment

portfolio and the choosing of the investment avenues.

SUGGESTIONS

Investment avenues- investment avenues provided by HSBC to its clients are less as

compared to the avenues provided by other institutions.

Demat account- HSBC should provide its clients with the Demat account facility.

Although this was not part of the study but during the survey it was found to be the most

common complaints from the investors.

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The no of branches should be increased do that it becomes easy for the clients to

approach the bank

Most of the people in Jaipur are not even aware of the additional services provided by the

bank; to promote this HSBC should aggressive marketing strategy.

4. REFERENCES

www.hsbc.co.in

www.hsbc.com

www.google.com

www.investopedia.com

www.wikipedia.com

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www.amfi.com

www.valueresearchonline.com

www.moneycontrol.com

BIBLIOGRAPHY

Donald R Cooper and Pamela S Schindler, Business research methods 9th edition, TATA

MCGRAW-HILL publishing company page nos.138, 143,403,494,423

ICFAI UNIVERSITY, Financial Management October, 2005 edition, page nos.89 and 91

Levin and Rubin,

5. ANNEXURES5.1 QUESTIONNAIRE

We the students of IBS are here to collect data and study about investment management .The information given here will not be dispersed or used other than academic purpose.

PERSONAL DETAILS:

Name

Address

Marital status Telephone no Date

1. Please indicate your age group.

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a) 20-29 years b) 30-39 yearsc) 40-49 years d) 50 years and above

2. What is your present income sourcea) Business b) Servicec) Professional d) Others………………..

3. Please indicate the number of financial dependents on you.a) None b) 1-2 c) 3-4 d) 5 and more

4. How would you describe your investment knowledgea) Excellent b) Good c) Average d) Poor

5. Please divide your total income in terms of % under the following categories. Less than 20% 21-40% 4 1-60% 61% and moreExpenditure…………… Savings ………………..

6. What % of your saving goes into investmenta) 25% or less than 25% b) 26-50%c) 51-75% d) 76% or more

7. % of income goes towards paying of installments of loans and other liabilities?a) 10% or less than 10% b) 11-20%c) 21-30% d) 31% & above

8. Describe yourself in terms of risk taking ability 1. High risk taker2. Low risk taker3. Risk avoider

9. You are investing from last…a) Initial starterb) 1-3 yearsc) 4-6 yearsd) 7 or more

10. What is your investment time horizon you prefer (the period for which the recommended investment portfolio will be appropriate) in years?a) 1-2 yearsb) 3- 5 yearsc) 6-10 yearsd) More than 10 years

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11. Please rank on the scale of 1 to 5 based on your investment preference needs( where 1 is most preferred and 5 is the lest preferred) 1 2 3 4 5a) Maximize returns………………………. b) Saving taxes…………………………….c) Kids planning…………………………..d) Family planning………………………...e) Building corpus…………………………

12. How frequently do you do investmentsa) Within 4 monthsb) 5-8 monthsc) 9-12 monthsd) More than 12 months

13. Rank the following investment avenues on the scale of 1 to 7 (where 1 is the most prioritized and 7 is the least prioritized) that your ideal portfolio may contain. Please give a unique rank to each of the category.

1 2 3 4 5 6 7a) Real estate …………………. b) Gold………………………….c) Mutual funds………………....d) Fixed deposits………………..e) Direct investment in equity…..f) Debt………………………….g) ULIP…………………………

14. Please rank on the scale of 1 to 7(where 1 is the most and 7 is the least) the following factors which according to you affect the investment portfolio.

1 2 3 4 5 6 7

a) Risk …………………………………... b) Growth…………………………….........c) Market …………………………………..d) Income…………………………………...e) Occupation……………………………….f) Age……………………………………….g) Others like family size or marital status….

15. What is the approximate size of your portfolio

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a) Rs.0-20 lakhb) Rs.21-40 lakhc) Rs.41-60 lakhd) Rs.61 & above

16. Your current investment portfolio contains the following investment avenues. (Please tick)a) Mutual fundsb) Fixed depositsc) Direct investment in equitiesd) Debte) ULIP(unit linked insurance plan)f) SIP(systematic investment plan)g) ELSS(Equity linked saving scheme)

17. How is your wealth divided in the above categories you mentioned in your current investment portfolioa) Mutual fundsb) Fixed depositsc) Direct investment in equityd) Debte) ULIP(unit linked insurance plan)f) SIP(systematic investment plan)g) ELSS(equity linked saving scheme)

18. What returns are you getting from your current portfolio?a) Up to 20%b) 21-30%c) 31-40%d) 41% or above

19. How often do you review your portfolio?a) Within a yearb) 2-3 yearsc) 4-5 yearsd) More than 5 years

20. Up to what extent does the SENSEX or the other Global cues affect your portfolio? Please rate on the scale of 1 to 5(where 1 is strongly effected and 5 is not effected) 1 2 3 4 5

a) 0-20 % b) 21-40%c) 41-60%d) 61-80%e) 81-100 %

21. Looking at the present market scenario in which avenue will you prefer to invest?

a) Real estateb) Commodities(like gold and silver)c) Mutual fundsd) Direct investment in equitiese) Fixed deposits

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f) Debtg) Insurance

5.2 DETAILS OF THE RESPONDENTS

SR. NO NAME AREA OF THE RESPONDENT

1. MRS. SAROJ KABRA GAURAV NAGAR, CIVIL LINES

2. MR. AMIT KABRA SHYAM NAGAR

3. MR.AMIT MAHESHWARI C-SCHEME

4. MRS. POOJA KABRA GAURAV NAGAR, CIVIL LINES

5. MR. KAMAL SARDA C-SCHEME

6. MR. JWALA PRASAD JI KABRA SANGRAM COLONY

7. MR. DWARKA PRASAD JI KABRA SHYAM NAGAR

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8. MR. RAMESH MAKHARIA GAURAV NAGAR, CIVIL LINES

9. MR. PURSHOTTAM GUPTA AMBABARI

10. MR. B.D MALOO GAURAV NAGAR, CIVIL LINES

11. MR. VINOD MAKHARIA GAURAV NAGAR, CIVIL LINES

12. MR. MAHENDRA GUPTA GAURAV NAGAR, CIVIL LINES

13. MR. B.L. AGGARWAL GAURAV NAGAR, CIVIL LINES

14. MR. RISHABH CHAUDHARY GAURAV NAGAR, CIVIL LINES

15. MR. PRAKASH JAIN GAURAV NAGAR, CIVIL LINES

16. MR. AKSHAY MITTAL MANSAROVAR

17. MR. HEMANT VIJAY VAISHALI NAGAR

18. MR. S.L. VIJAY VAISHALI NAGAR

19. MR. HEMANT CHANDAK HATHROI FORT

20. MR. ANSHUL SHARMA SHYAM NAGAR

21. MR. UTTAM RATHI SHYAM NAGAR

22. MR. AMIT KUMAR SHYAM NAGAR

23. MR. VIJAY KASLIWAL JOHRI BAZAR

24. MR. VINAY SINGHAL JOHRI BAZAR

25. MR. ARJUN SHARMA M.I. ROAD

26. MR. VINAY AJMERA KESHAV NAGAR, HAWA SARAK

27. MR. ANKUSH SARDA HATHROI FORT

28. MR. GIRISH BHUTRA SHYAM NAGAR

29. MISS. SONAL KHANDELWAL BANI PARK

30. MR. RISHABH GARG KANTI NAGAR

31. MR. HANS SHARMA BAIS GODAM

32. MR. RAVI JAIN TILAK NAGAR

33. MR. K.K. MORYA JANPATH, SHYAM NAGAR

34. MR. SURESH BHANSALI ADARSH NAGAR

35. MRS. RUCHI AKAR BANI PARK

36. MR. RAJENDRA GANGWAL MALVIYA NAGAR

37. MR. SHISHIR AGGARWAL FARM

38. MR. AMAN VERMA MANSAROVAR

39. MR. MANPREET CHUGH ADARSH NAGAR

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40. MR. RAVI MEHTA JAWAHAR NAGAR

41. MR. ALPESH KANUNGO JAWAHAR NAGAR

42. MR. ANKIT VAJPAYEE C-SCHEME

43. MR. VISHAL MAKHARIA GAURAV NAGAR

44. MR. RADHEY SHYAM KABRA GAURAV NAGAR, CIVIL LINES

45. MR. ASHUTOSH BANSAL VAISHALI NAGAR

46. MRS. NISHA AGGARWAL SURAJ NAGAR,CIVIL LINES

47. MR. SHALENDRA SHRDA GAURAV NAGAR,CIVIL LINES

48. MR. BRIJESH VYAS ADARSH NAGAR

49. MISS. ALPA RANKA TONK ROAD

50. MR. NAVAL KISHORE AKAR BANIPARK

51. MR. ANAND KABRA GAURAV NAGAR

52. MR. NITIN VERMA SHYAM NAGAR

53. MR. VAIBHAV CHANDOLA V.K.I. INDUSTRAIL AREA

54. MAYANK BIDYASAR JAWAHAR NAGAR

55. MR.PATEL SING CHAUDHRAY QUEENS ROAD

56. MR. SUDHIR GUPTA DULESHWAR GARDEN

57. MR. SANJEEV AKAR KISHANPOLE BAZAR

58. MR. SANDEEP CHAUDHARY QUEENS ROAD

59. MR. MANISH SHARMA TRANSPORT NAGAR

60. MR. ABHEENAV AKAR AKAR MARG,BANI PARK

61. MR. N.K. SHARMA MALVIYA NAGAR

62. MR. NEERAV AKAR BANIPARK

63. MR. DEEPAK AKAR BANIPARK

64. MR. SANJAY GUPTA SHASTRI NAGAR

65. MR. PRATEEK JAIN SETHI COLONY

66. MR. GAURAV SHARMA NEW VIDHAN SABHA

67. MRS. ANUBHA BAHETI BAHETI MARG, BANI PARK

68. MR. ANKIT JAIN SETHI COLONY

69. MR. DILIP PALIWAL SINDHI COLONY

70. MR. BANNEY CHAN JAIN GAURAV NAGAR, CIVIL LINES

71. MR. G.D. RATHOD IBS JAIPUR

72. MR. PRIYANSHU BANSAL VAISHALI NAGAR

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73. MR. N.K. AKAR AKAR MARG, BANIPARK

74. MR. JITENDRA SINGH VAISHALI NAGAR

75. MRS. HIMANI JETHANI BEES DUKAN, ADARSH NAGAR

76. MR. MANUJ SHARMA BHAGIRATHI COLONY,C-SCHEME

77. MR. GAURAV MISHRA MALVIYA NAGAR

78. MR. C.B. GUPTA KAVERI PATH,MANSAROVAR

79. MISS. RASHMI JETHANI ADARSH NAGAR

80. MR. ASHISH SHARMA RAM NAGAR, SODALA

81. MR. BHARAT GUPTA KISHANPOLE BAZAR

82. MR. RAKESH BAHETI DHULESHWAR GARDEN

83. MR.SUMMET GUPTA NIRMAN NAGAR

84. MR. ANUJ SHARMA CHITRAKOOT, VAISHALI NAGAR

85. MRS. RAKHI DATTA RAJA PARK

87. MR. PAWAN KUMAR GOYAL VISHESHWARIYA NAGAR EXT.

88. MR. AMIT SABOO SHANTI NAGAR, AJMER ROAD

89. MRS. PUSHPA GOYAL VIDYADHAR NAGAR

90. MR. PREM PRAKASH CHITRAKOOT,VAISHALI NAGAR

91. MR. T.D VYAS ADARSH NAGAR

92. MR. SUNEEL MAKHARIA MANSAROVAR INDUSTRAIL AREA

93. MR. GOVIND LODHA KESHAV NAGAR, HAWA SARAK

94. MR.PAWAN BANTHIA BURMEESE COLONY

95. MR.SUJEET LUHADIA MAHAVEER NAGAR

96. MR.GORISHANKAR KABRA SHYAM NAGAR EXT.

97. DR. JUGAL PRASAD KABRA SETHI COLONY

98. DR. SHYAM SUNDER KABRA SETHI COLONY

99. MAJOR. AMIT SHARMA NEAR SANGANER AIRPORT

100. MRS. ANITA BHOOP RAM NAGAR,SODALA

68

69