Exploring optimal portfolio opportunities in Indian stock markets

Rajesh Mohnot

International Journal of Economics and Business Research, 2016, vol. 11, issue 4, 336-346

Abstract: It is comparatively easier to structure an optimal portfolio for investors in developed financial markets rather than to do it for investors in developing and emerging markets. Given the promising economic growth in emerging countries, foreign institutional investors have shifted their capital flow to emerging markets especially Indian stock markets. According to MSCI, the 13.2% total return in year 2010 is comprised of emerging markets returning 20.2 and developed markets, dominated by Western Europe and Japan, returning only 9.7%. On a pragmatic principle of high-risk, high-return, these returns pass through high volatility patterns in the stock markets especially in the developing countries. This research examines whether Indian stock markets provide optimal portfolio opportunities. A risk-return strategy is evaluated using the Sharpe model to check whether optimal portfolio can be constructed across different sectors.

Keywords: risk-return trade-off; optimal portfolio; investment strategies; Sharpe ratio; emerging markets; portfolio opportunities; India; stock markets; foreign investors; institutional investors; volatility patterns. (search for similar items in EconPapers)
Date: 2016
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