Portfolio Management Of Value Investing

Since 2003, with the promotion of mutual funds and QFII, the value investment (VI) theory has been accepted by Chinese capital market, and the portfolio management of VI having been regarded more and more highly. However, as the traditional value investment theory emphasizes concentrated investment behavior, VI portfolio theory isn't popular in stock market yet. So this paper will discuss how to build a VI portfolio and how to apply it in Chinese capital market.There are seven chapters in this paper, chapter 1 introduces the background and the significance of this paper research; chapter 2 mainly explains related fundamental concepts, theory bases and the necessarily of building VI portfolio;Chapter 3 introduces basic matters of modern portfolio theory and its directions to build VI portfolio; Chapter 4 discusses how to build VI portfolio by the number; Chapter 5 talk over risk things and methods which investors used to control them; Chapter 6 focus on the characteristics of Chinese securities market, the applying situation of VI theory in China and the strategy of building a portfolio in Chinese market; Chapter 7 focus on the study of Boshi fund's portfolio, such as how to build a portfolio, how to assign different assets and industries, how to select valued stocks, and how to manage VI portfolio. The conclusion of the study is that the applying basic of VI theory has already exists in Chinese securities market, and VI theory is also the reason of Boshi fund's success in the market. Today, in Chinese securities market, the assignment of assets and the timing of invest are more important, so does the balance between concentrated investment principal and diversification portfolio. In addition, for the purpose of transfer cost decrease and investment risk control, the steady of investment portfolio should be guided too.Being an investment theory and a management method, VI theory should have different strategy in different markets. In Chinese securities market, with the speeding of internationalization, standardization and progress, VI will host the market. But now, as the main investment model is still getting capital gain, value oriented investors should depend on the value guidance and evaluation system that accepted by domestic investors, and use step portfolio tactics, to transfer system risk and individual stock risk.