Final Project

INTRODUCTION OF THE COMPANY

VISION OF THE COMPANY

Vision is to be the most respected company in the financial

services space.

INTRODUCTION

5paisa is the trade name of the India Info Line securities private

limited, a wholly owned subsidiary of India Info Line ltd. 5paisa holds

membership of both the leading stock exchange of India viz. the

Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) and

is also a depository participant with NSDL and CDSL. It has tied up with

the leading banks for funds transfer facilities Viz. City Bank, Centurion

Bank, ICICI Bank and UTI Bank. The group has a membership of a Multi

Commodities Exchange (MCX), National Commodities and Derivative

Exchange of India (NCDEX) and the Dubai Gold and Commodities

Exchange (DGCX).

India Info Line Ltd was founded in 1995 by a group of professionals

with impeccable educational qualification and professional credentials.

India Info Line is listed on BSE and NSE with a market capitalization of

over $ 150 million.

The India Info Line group, comprising the holding company, the

India Info Line Ltd. And its wholly owned subsidiaries offers the entire

gamut of investment products ranging from Equities and Insurance,

Fixed Deposits, GOI Bonds, Loan Products and other Small Saving

Instruments. It also owns and operates web sites,

www.indiainfoline.com and www.5paisa.com.

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India Info Line is a forerunner in the field of equity research. India

Info Line’s research is acknowledged by none other than Forbes as

“The best of the web” and “----a must read for investor in Asia”. India

Info Line’s research is available not just over the Internet but also on

international wire services like Bloomberg (code: ILL), Thomson first

call and Internet securities where it is amongst the most read Indian

brokers. The India info Line group has a significance presence across

the country with over 500 branches in over 300 cities across India. All

these offices are networked and connected with the corporate office in

Mumbai. The group has invested significantly in technology and

research, the result of which are there for every one to see. The 5paisa

trading interface is one of the most advanced platforms available to

retail investor in India. The group has membership on BSE and NSE for

equities trading. It has a SEBI license for portfolio management under

which, various schemes are offered, which have been continentally

beating the benchmark indices since inception.

THE INDIA INFOLINE LTD.

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India Info Line Ltd., being a listed entity, is regulated by SEBI

(Securities and Exchange Board of India). It undertakes equities

research which is acknowledged by none other than Forbes as Best of

the web must read for investors in Asia'. India Info Line's research is

available not just over the Internet but also the international wire

services like Bloomberg (Code: IILL), Thomson First Call and Internet

Securities where it is amongst the most read Indian brokers.

Its various subsidiaries are in different lines of business and hence

are governed by different regulators. The subsidiaries of India Info Line

Ltd are:

India Info Line Securities Private Ltd.:

India Info Line Securities Pvt. Ltd is a 100% subsidiary of India Info

Line Ltd, which is engaged in the businesses of Equities broking and

Portfolio Management Services. It holds memberships of both the

leading

Stock exchanges of India viz. the Stock Exchange, Mumbai (BSE) and

the National Stock Exchange (NSE). It offers broking services in the

Cash and Derivatives segments of the NSE as well as the Cash

segment of the BSE.

India Info Line Investment Services Ltd.:

India Info Line Investment Service Ltd is also a 100% subsidiary

of India Info Line Ltd. It has an NBFC license from the Reserve Bank of

India (RBI) and offers margin-funding facility to the broking customers.

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OPERATIONS

This is where the 5paisa subsidiary of the India Info Line

group, comes in. They operate their functions through their domain

knowledge and database on in depth research of complex paradigms

of commodity kinetics; offer their customers a unique insight into

behavioral patterns of these markets. Their customers are ideally

positioned to make informed investment decisions with a high

probability of success.

Trading can be online, over the phone or at their branches.

Highly qualified, well-trained relationship managers are available at

their investor points across the country, to help the investor make the

best of commodities trading!

Besides all the above functions, they also leverage their skills

in research, investments in cutting edge technology and understanding

of investor’s requirements to ensure that their needs are taken care of.

Thus, they perform the function of adding value to the investor’s

money.

MANAGEMENT TEAM

The management team of the INDIA INFOLINE includes the

following members:

1. Mr. Nirmal Jain

Nirmal Jain is the founder and Chairman of India Info Line Ltd.

He holds an MBA degree from IIM Ahmedabad, and is a Chartered

4

Accountant (All India Rank 2) and a Cost Accountant. He has had an

impeccable professional and academic track record. He started his

career in 1989 with Hindustan Lever Limited. During his stint with

Hindustan Lever, he handled a variety of responsibilities, including

exports and trading in agro commodities with Rs.3bn annual turnover.

He then joined hands with two local brokers to set up their equity

research division, Inquire, in 1994. His work set new standards for

equity research in India. In 1995, he founded his own independent

financial research company, now known as India Info Line Ltd.

2. Mr. R.Venkataraman

R Venkataraman is the co-promoter and Executive Director of

India Info Line Ltd. He holds a B. Tech degree in Electronics and

Electrical communications engineering from IIT Kharagpur and an MBA

degree from IIM Bangalore. He has held senior managerial positions in

various divisions of ICICI Limited, including ICICI Securities Limited,

their investment banking joint venture with J P Morgan of USA and with

BZW and Taib Capital Corporation Limited. He has also held the

position of Assistant Vice President with G E Capital Services India

Limited in their private equity division. He has varied experience of

more than 14 years in the financial services sector.

The Board of Directors

Apart from Nirmal Jain and R Venkataraman, the Board of Directors of

India Info Line comprises:

Mr. Sat Pal Khattar (Non Executive Director)

Mr.Sanjiv Ahuja (Independent Director)

Mr.Nilesh Vikamsey (independent director)

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Mr.Kranti Sinha (independent director)

Products:

The India Info Line group offers the entire gamut of financial

services from research and advisory to execution and services which

include:

Equity Broking :

It offers trading in both the cash as well as the derivative

segments. It is one of the largest online players.

Portfolio management services:

Portfolio management services as a SEBI registered portfolio

manager.

Investment banking:

Investment banking and corporate advisory under the category-

1 merchant-banking license.

Home loans:

Home loans and other loan products.

Mutual funds, fixed deposit, IPO’s, bonds, post office:

Saving and several other investment products

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Let’s see all these products in detail.

EQUITY BROKING:

The India info Line team will help in equity trading with their

research and advisory support. There are two options while investing in

shares of companies; subscribing to shares during an IPO (primary

market) and trading in listed shares of companies in the secondary

market. For the letter option, 5paisa has amazing products, which will

enable to buy and sell shares over the Internet. Investor can also

invest online in all the latest IPO’s by simply logging on to

http://www.5paisa.com. Investing in IPO’s is now just a click away.

Technology:

The 5paisa trader terminal using advance data compression

technology executes the trade faster. Add to this the amazing 128 –bit

SSL super security, and you have unparalleled speed coupled with

unbeatable security. The same technology also powers the intra-day /

historical charts, live streaming quotas that you can see at a single

click and much more.

Customer service:

The customer service of India info Line has been rated as

excellent is available to solve any and all of your queries. They have a

proactive customer service philosophy where in their team not just

react to customer quires but also proactively communicates with them

regarding important developments. To interact with them anyone can

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use real time chat or call their all India toll free number or through the

e - mail.

Open an account:

For popping an account with the India info Line, one can register

on their site www.5paisa.com or call at toll free number or just send an

e- mail. Their executive will call on you and less than 5 minuets

complete all formalities.

LOAN PRODUCTS:

India Info Line also provides loan products which are as follows:

Home loan

Personal loan.

MUTUAL FUND:

India Info Line also provides mutual fund services to its

customer. Investor can choose risk profile and asset mix. They provide

various mutual fund schemes which is as follows:

Mutual fund – growth / equity fund:

These are the funds where the investment objective is to

generate capital appreciation. Returns are reflected by the net asset

value.

Mutual fund – income fund:

These are the funds where the investment objective is to

generate steady returns. The return is approximately 5.5 – 6% and

typically reflected by net asset value. It involves law medium risk.

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Mutual fund – balanced fund:

These are funds where objective is to generate reasonable long-

term capital appreciation balanced by steady income. The returns are

variable. It involves medium high risk.

Mutual fund – gilt fund:

These are funds where the investment objective id to generate

steady income at low risk. The return is approximately 5-5.5%. The risk

is low in medium term and medium in short term.

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INTRODUCTION OF THE TOPIC

COMPARISON BETWEEN EQUITY AND MUTUAL FUND

Equity shares:

Shares: When companies look for money for their business,

they can get it in two ways - either they borrow from a bank or pay

interest ("debt") or they ask people like you and me to invest and give

us shares ("equity"). A share is a part of a business.

A share capital of a company is divided into a number of

small units of equal value is called Shares. The stock aggregate of a

fully paid of shares is called Stocks.

Return on Equity is uncertain and its change time to time.

The degree of fluctuation and size of the return, which

together determine the value of the Equity share to the

investors.

Analysis is based on prediction on several basic attributes of

securities and modifies the result on its beliefs.

The stock market classifies shares as,

Growth shares:

The stocks that have higher rate of growth than the industrial growth rate in profitability are referred to as growth shares. For example, the list of major gainers for 1999 is dominated by software sector stocks. The HCL and Info systems shares price increase sharply.

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Income shares:

These stocks belong to companies that have comparatively stable operations and limited growth opportunities. The bank shares and some of the fast moving consumer goods stocks such as Cadburys, Nestle, and Hindustan Lever may be termed as income share.

Defensive shares:

Defensive stock are relatively unaffected by the market movement for example a host of pharmaceutical stocks posted returns in excess of the 50% in 1998. The pharmaceutical industry owing to its inherent nature of demand is not affected by downturn in the economy.

Cyclical shares:

The business cycle affects the cyclical shares. The upward and downward movement of the business cycle affects the business prospects of certain companies and their stock prices. Such shares provide low to moderate yield. Capital gain may be highly variable. For example the automobile sector stocks are affected by the business cycles.

Characteristics:

Equity shareholders are the true owners of the firm or

company.

It is a residual form of ownership.

Earnings and assets are considered only after the claim of

government, debenture holders, and preference holders have

been met.

Equity is a permanent form of long term financing because

Equity share has no maturity date.

Advantages:

It has limited liability.

It is potential for profit.

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Equity hedge (protect) against the inflation.

The transferability of the shares is free and very easy.

Equity shares have tax advantages to the investors.

Equity shareholders have the voting rights.

Mutual Fund:

A mutual fund is a pool of investments used to buy a large

portfolio of securities that will be managed by a professional advisor.

When you buy a share in a mutual fund, you effectively buy a bit of

each security held in the fund's portfolio.

Mutual funds are not just restricted to shares. They are mutual

investments, therefore they can be anywhere. The common ones are

equity (stocks and shares) and Debt. Debt markets are where

companies borrow money, but they want to borrow huge sums of

money that you and I don't have. Therefore, we pool in our money

(mutual fund) and give the big whole lot to the company at an interest.

Even the government borrows, but again, only large sums of money.

Mutual funds can invest there too. Debt is traditionally "safer" than

equity since there is a fixed valuation and good rating mechanisms to

curb risk; and in the same vein, the profits (and losses) are usually

much lesser than equity.

One of the main advantages of a mutual fund is that it gives

small investors access to a well-diversified portfolio of

equities, bonds and other securities, which would be quite

difficult (if not impossible) to create with a small amount of

capital. Each shareholder participates proportionally in the gain or

loss of the fund. Mutual fund units, or shares, are issued and can

typically be purchased or redeemed as needed at the current net asset

value per share (NAVPS).

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Mutual funds are not risk free investments. Even

investing in mutual funds whose portfolios consist only of guaranteed

government bonds contains an element of risk. Before you invest in a

mutual fund, be sure you completely understand the risk. When you

invest in a fund, the risk of total loss is lessened due to the

diversity in the portfolio.

The Mutual Fund is the most ideal investment vehicle in today’s

world for various reasons. The capital markets including equity shares,

bonds and other fixed income instruments have matured. Also a typical

individual does not have enough knowledge, skills and inclination of the

happening event in the economy, understanding their implication and act

speedily.

Advantages:

The advantages of investing in Mutual Fund are:

1. Professional Management. You avail of the services of

experienced and skilled professionals who are backed by a

dedicated investment research team, which analyses the

performance and prospects of companies and selects the

suitable investments to achieve the objective of the scheme.

2. Diversification. Mutual Funds invest in a number of companies

across a broad cross-section of industries and sectors. This

diversification reduces the risk because seldom do all stocks

decline in the same time and in same proportion. You achieve

this diversification through a Mutual Fund with far less money

than you can do on your own.

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3. Convenient Administration. Investing in a Mutual Fund

reduces paper work and helps you avoid many problems such as

bad deliveries, delayed payments and unnecessary follow up

with brokers and companies. Mutual Fund saves your time and

makes investing easy and convenient.

4. Return Potential. Over a medium to long term, Mutual Funds

have the potential to provide a higher return as they invest in a

diversified basket of selected securities.

5. Low Costs. Mutual Funds are a relatively less expensive way to

invest compared to directly investing in the capital markets

because the benefits of scale in brokerage, custodial and other

fees translate into lower costs for investors.

6. Liquidity. In open-ended schemes, you can get your money

back promptly at net asset value related prices from the Mutual

Fund itself. With close-ended schemes, you can sell your units on

a stock exchange at a prevailing market price or avail of the

facility of direct repurchase at NAV related prices which some

close-ended and interval schemes offer you periodically.

7. Transparency. You get regular information on the value of your

investment in addition to disclosure on the specific investments

made by your scheme, the proportion invested in each class of

assets and the fund manager's investment strategy and outlook.

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8. Flexibility. Through features such as regular investment plans,

regular withdrawal plans and dividend reinvestment plans, you

can systematically invest or withdraw funds according to your

needs and convenience.

9. Well Regulated. All Mutual Funds are registered with SEBI and

they function within the provisions of strict regulations designed to

protect the interests of investors. The operations of Mutual Funds

are regularly monitored by SEBI.

YOUR RIGHTS AS A MUTUAL FUND UNITHOLDER.

As a unit holder in Mutual Fund scheme coming under the SEBI (Mutual

Funds) Regulation, ("Regulations") you are entitled to:

1. Receive unit certificates or statements of accounts conforming

your title within 6 weeks from the date of closure of the

subscription or within 6 weeks from the date your request for a

unit certificate is received by the Mutual Fund;

2. Receive information about the investment policies, investment

objectives, financial position and general affairs of the scheme;

3. Receive dividend within 42 days of their declaration and receive

the redemption or repurchase proceeds within 10 days from the

date of redemption or date of redemption;

4. Vote in accordance with the Regulations to:

A. either approve or disapprove any change in the fundamental

investment policies of the Scheme which are likely to modify the

scheme or affect your interest in the Mutual Fund; (as a

dissenting unit holder, you would have the right to redeem your

investments);

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B. Changes the asset management company;

C. Wind up the schemes.

5. Inspect the documents of the Mutual Funds specified in the

scheme's offer document.

In addition to your rights, you can expect the following from Mutual

Funds:

To publish their NAV, in accordance with the regulations: daily, in

case of open-ended schemes and periodically, in case of close-

ended schemes;

To disclose your schemes' portfolio holdings, expenses, policy on

asset allocation, the Report of the Trustees of the operations of

your schemes and their future outlook through periodic

newsletters, half-yearly and annual accounts;

To adhere to a Code of Ethics which requires that investment

decisions are taken in the best interests of the unit holders?

Fund unit v/s Shares:

The price of unit of a fund is also quoted in the market. The price

is governed by the value of the underlying investment by the fund.

Investment on Equity share represents investment in a particular

company alone.

Investment on a unit of a fund represents investment in the part

of a share of a large number of companies. If particular company fails,

the shareholder of the company affected very much where as the unit

holders of that company are able to stand with that risk means

profitable in other company shares.

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Investment in Equity share can be used as a speculator and

inveterate stock market to gain abnormal profit. They play game on

daily basis. Where Mutual Fund can not invested for daily basis. For

speculator Mutual Fund is not right vehicle. Mutual Fund is for genuine

investor where as Equity is for both genuine investor and speculator.

TYPES OF MUTUAL FUND SCHEMES

Wide variety of Mutual Fund Schemes exist to cater to the needs such

as financial position, risk tolerance and return expectations etc. The

table below gives an overview into the existing types of schemes in the

Industry.

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RESEARCH METHODOLOGY

Problem definition

The present study titled, “Comparison between Equity and Mutual

Fund” has following objectives.

To know the risk involved in investing in Equity and Mutual Fund.

To know which one is better for investors for investment.

To know the investor who invest in Equity and Mutual Fund.

Data collection:

Primary Data:

Primary data is the data, which is not collected and used

by somebody else. In this project questionnaire has been used to study

the Comparison between Equity and Mutual Fund.

Secondary Data:

Secondary data means the data, which are already

collected and used by some body else. Secondary data has been

collected from the following sources:

India infoline.com

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5paisa.com

MF.com

From book- Financial Markets And Financial Services

Geographical Area :

Bilimora city is selected for the study of comparison

of Equity and Mutual Fund, which is better for the people to

invest.

Research Design:

Descriptive Analysis:

Descriptive study is used to study the situation. This

study helps to describe the situation. A detail descriptive about

present situation can be found out by the descriptive study. In

this involves the analysis of the situation using the secondary

data and primary data. In this project work secondary data and

primary data are used.

Limitations of the study

During the project following hurdles are faced.

1) The time is limit for project work and I had only fill up 150

questionnaires.

2) This study was done by me with my limited knowledge.

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DATA ANALYSIS AND INTERPRETATION

Q. 1 Proportion of awareness and investment in Equity and Mutual fund.

Awareness & Investment

136

64

144

70

0

50

100

150

200

Aw are Invest

Equity

Mutual Fund

Interpretation:

From the above graph and table we can see that most of

respondents are with Equity and Mutual Fund i.e. respectively 134

&144 and out of 150 respondents 64 invest in Equity &70 respondents

are invest in Mutual Fund.

Particular Aware InvestEquity 136 64

Mutual Fund 144 70

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Q. 2 Which one of this is better for investment Equity and Mutual Fund?

Chi-Square

Equity * Age

Chi-Square Tests

Value Df

Asymp.

Sig. (2-

sided)

Pearson Chi-

Square

28.110

(a)12 .005

Likelihood

Ratio20.319 12 .061

Linear-by-

Linear

Association

.016 1 .899

N of Valid

Cases150

Equity is Better

FirstSecon

dThird

15-25 15 6 13Age 26-35 33 17 15

36-45 13 15 946-55 3 0 556-65 2 0 1

21

Equity is better

15

33

13

3 26

17 15

0 01 10

10

20

30

40

15-25 26-35 36-45 46-55 56-65

Age

Equity is Better First

Equity is Better Second

#REF!

#REF!

Interpretation:

The Chi-square test is carried out at 95% confidence level (0.05

significance level). The Pearson Chi-square value comes out as 28.11,

which has a significance level of 0.05. We, therefore, reject null

hypothesis of no association between age and equity. It means that

there exist a statistically significant association between Age and

Equity is better.

Mutual Fund * Age

Mutual Fund is Better

First Second Third15-25 17 14 3

Age 26-35 27 32 636-45 23 13 346-55 5 3 056-65 1 2 0

22

Chi-Square Tests

Value df

Asymp.

Sig. (2-

sided)

Pearson Chi-

Square

20.617

(a)12 .056

Likelihood

Ratio11.516 12 .485

Linear-by-

Linear

Association

1.686 1 .194

N of Valid

Cases150

Mutual Fund is better

1727 23

5 1

14

32

133 23 6 3 0 0

010203040

15-25 26-35 36-45 46-55 56-65

Age

Mutual Fund is BetterFirst

Mutual Fund is BetterSecond

Mutual Fund is BetterThird

Interpretation:

The Chi-square test is carried out at 95% confidence level

(0.05 significance level). The Pearson Chi-square value comes out as

20.617, which has a significance level of 0.05. We, therefore, reject

null hypothesis of no association between Age and Mutual Fund. It

means that there exist a statistically significant association between

Age and Equity is better.

23

Equity * Income

Equity is Better

First Second Third<5000 1 4 4

Income

5001-15000

26 12 23

15001-25000

24 15 9

>25000 17 7 7

Chi-Square Tests

Equity is better

1

26 2417

4

1215

74

23

9 7

05

1015202530

<5000 5001-15000

15001-25000

>25000

Income

Equity is Better First

Equity is BetterSecond

Equity is Better Third

Value df

Asymp.

Sig. (2-

sided)

Pearson Chi-

Square

14.336(

a)9 .111

Likelihood Ratio 14.524 9 .105

Linear-by-Linear

Association6.516 1 .011

N of Valid Cases 150

24

Interpretation:




null hypothesis of no association between age and equity. It means

that there exist a statistically significant association between Income

and Equity is better.

Mutual Fund * Income

Mutual Fund is Better

First Second Third<5000 8 0 1

Income

5001-15000

30 26 5

15001-25000

22 21 5

>25000 13 17 1

Chi-Square Tests

25


8

3022

13

0

2621

17

15 5

10

10

20

30

40

<5000 5001-15000 15001-25000 >25000

Income

Mutual Fund is Better First

Mutual Fund is Better Second

Mutual Fund is Better Third

Interpretation:




null hypothesis of no association between Income and Mutual Fund. It


Income and Mutual Fund is better.

Equity * Occupation

Value df

Asymp.

Sig. (2-

sided)

Pearson Chi-

Square

13.274

(a)9 .151

Likelihood

Ratio16.136 9 .064

Linear-by-

Linear

Association

.577 1 .448

N of Valid

Cases150

26

Equity is better

First Second ThirdStudent 16 5 9

Occupation

Service Class

19 5 6

Businessman 9 13 8Professional 12 9 8House Wife 12 6 12

Chi-Square Tests

Value df

Asymp.

Sig. (2-

sided)

Pearson Chi-

Square

16.943

(a)12 .152

Likelihood

Ratio15.655 12 .208

Linear-by-

Linear

Association

1.989 1 .158

N of Valid

Cases150

27

Equity is better

1619

912 12

5 5

139

69

6 8 812

05

101520

Stu

dent

Ser

vice

Cla

ss

Bus

ines

sman

Pro

fess

iona

l

Hou

se W

ife

Occupation

Equity is better First

Equity is better Second

Equity is better Third

Interpretation:




null hypothesis of no association between Occupation and Equity. It


Occupation and Equity is better.

Mutual Fund * Occupation


First Second ThirdStudent 13 14 3

Occupation

Service Class

8 19 3


28

Chi-Square Tests


138

21

1417

1419

812 11

3 3 1 3 2

05

10152025

Stu

dent

Ser

vice

Cla

ss

Bus

ines

sman

Pro

fess

iona

l

Hou

se W

ife

Occupation

Mutual Fund is better First

Mutual Fund is betterSecond

Mutual Fund is better Third

Interpretation:



16.94, which has a significance level of 0.05. We, therefore, reject null

hypothesis of no association between Occupation and Mutual Fund. It


Value df

Asymp.

Sig. (2-

sided)

Pearson Chi-

Square

16.936

(a)12 .152

Likelihood

Ratio16.494 12 .170

Linear-by-

Linear

Association

2.573 1 .109

N of Valid

Cases150

29

Occupation and Mutual Fund is better.

Now we perform factor analysis to reduce total

variables by dropping the insignificant variables. In

real life, the number of independent variables in

predicting the response variables are too many. This

difficulty of too many independent variables can be

tackled by using facto analysis. It aims at grouping

the original input variables into factors which

underlie the input variables.

Question: 3.1 I prefer Equity because.

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of

Sampling Adequacy..941

Bartlett's Test of

Sphericity

Approx. Chi-

Square

1824.75

2

Df 15

Sig. .000

30

Above table suggests that my data is adequate for factor

analysis because the value of KMO is 0.941 and Bartlett’s test of

sphericity value is statistically significant.

Total Variance Explained

Initial Eigenvalues

Extraction Sums

of Squared

Loadings

Rotation Sums of

Squared

Loadings

Co

m

po

ne

nt

Total

% of

Varian

ce

Cumul

ative

%

Tota

l

% of

Varia

nce

Cum

ulati

ve %

Tota

l

%

of

Vari

anc

e

Cumu

lative

%

1 5.682 94.696 94.6965.68

2

94.69

6

94.6

96

3.29

0

54.8

40

54.84

0

2 .103 1.718 96.414 .103 1.71896.4

14

2.49

4

41.5

73

96.41

4

Communalities

InitialExtractio

n

3.1.take high risk 1.000 .988

3.1.Marketability on assets

price1.000 .959

3.1.fluctuation control 1.000 .973

3.1.Eq.has no locking period 1.000 .969

3.1.Diversify 1.000 .937

3.1.Trading is easier 1.000 .958

31

38.622E-

021.437 97.850

45.385E-

02.897 98.748

54.183E-

02.697 99.445

63.330E-

02.555

100.00

0

Component Matrix(a)

Component

1 2

3.1.take high risk .958 .264


price.976 -7.683E-02

3.1.fluctuation control .974 -.152

3.1.Eq.has no locking period .984 -4.306E-02

3.1.Diversify .967 3.938E-02

3.1.Trading is easier .979 -2.649E-02

32

Component Transformation

Matrix

Component 1 2

1 .756 .655

2 -.655 .756

Interpretation:

From the above table we have come to know that from

various parameters the customer have selected but some major

parameters which are very essential for any customers while selecting

Equity as better. So, on the basis of these parameters the customers

choose their preference for investing in equity.

Rotated Component Matrix(a)

Componen

t

1 2

3.1.take high risk .551 .827


price.788 .581

3.1.fluctuation is control .836 .523

3.1.Eq.has no locking period .772 .611

3.1.Diversify .705 .663

3.1.Trading is easier .757 .621

33

So, here the most important parameters customers

preferred is as under,

1st parameter

Fluctuation is controlled.

2nd parameter

Their capabilities of Taking High Risk.

Q. 3.2 How much return you expect to receive from Equity?

Expected Return * Age

Expected Return

5%-10%11%-15%

16%-20%

>20%

15-25 3 5 2 5Age 26-35 2 8 9 14

36-45 0 4 2 946-55 0 1 0 256-65 0 1 0 1

Chi-Square Tests

34

Expected Return

32

0 0 0

5

8

4

1 12

9

20 0

5

14

9

21

02468

10121416

15-25 26-35 36-45 46-55 56-65

Age

Expected Return 5%-10%



Expected Return >20%

Interpretation:


significance level). The Pearson Chi-square value comes out as 12.18,

which has a significance level of 0.05. We, therefore, reject null

hypothesis of no association between Age and Expected Return in

Mutual Fund. It means that there exist a statistically significant

association between Age and Expected Return in Equity.

Value df

Asymp.

Sig. (2-

sided)

Pearson Chi-

Square

12.179

(a)16 .732

Likelihood

Ratio13.517 16 .635

Linear-by-

Linear

Association

.072 1 .789

N of Valid

Cases150

35

Q. 3.3 How much return you receive from your investment in Equity?

Receive Return * Age

Receive Return

5%-10%

11%-15%

16%-20%

>20%

15-25 4 2 5 3Age 26-35 1 11 5 5

36-45 1 2 1 546-55 0 0 0 256-65 0 0 0 1

Chi-Square Tests

Value df

Asymp.

Sig. (2-

sided)

Pearson Chi-

Square

21.655

(a)16 .155

Likelihood

Ratio21.625 16 .156

Linear-by-

Linear

Association

.207 1 .649

N of Valid

Cases150

36

Receive Return

4

1 10 0

2

11

2

0 0

5 5

10 0

3

5 5

21

0

2

4

6

8

10

12

15-25 26-35 36-45 46-55 56-65

Age

Receive Return 5%-10%



Receive Return >20%

Interpretation:




null hypothesis of no association between Age and Receive Return in

Equity. It means that there exist a statistically significant association

between Age and Receive Return in Equity.

Expected Return * Occupation

Expected Return

5%-10%11%-15%

16%-20

>20%

Student 3 5 1 7Occupatio

nService Class

0 4 9 6

Businessman 1 2 0 6Professional 0 5 1 6House Wife 1 3 2 6

Chi- Square

Tests

Value Df

Asymp.

Sig. (2-

sided)

Pearson Chi-

Square

32.112

(a)16 .010

Likelihood

Ratio29.979 16 .018

Linear-by-

Linear

Association

1.566 1 .211

N of Valid

Cases150

37

Expected Return

3

01

01

54

2

5

3

1

9

01

2

76 6 6 6

0123456789

10

Stu

de

nt

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lass

Bu

sin

ess

ma

n

Pro

fess

ion

al

Ho

use

Wife

Occupation



Expected Return 16%-20


Interpretation:


significance level). The Pearson Chi-square value comes out as


null hypothesis of no association between Occupation and Expected

38

Return in Equity. It means that there exist a statistically significant

association between Occupation and Expected Return Equity.

Receive return * Occupation

Receive

Return5%-10%

11%-15%

16%-20

>20%


nService Class

2 6 3 1


Chi-Square Tests

Value df

Asymp.

Sig. (2-

sided)

Pearson Chi-

Square

16.547(

a)16 .415

Likelihood Ratio 20.024 16 .219

Linear-by-Linear

Association.531 1 .466

N of Valid Cases 150

39

Receive Return

32

0 01

2

6

23

23 3

0

32

4

1

5

3 3

01234567

Stu

de

nt

Se

rvic

e C

lass

Bu

sin

ess

ma

n

Pro

fess

ion

al

Ho

use

Wife

Occupation



Receive Return 16%-20

Receive Return >20%

Interpretation:




null hypothesis of no association between Occupation and Receive

Return in equity. It means that there exist a statistically significant

association between Occupation and Receive Return in Equity.

Question: 4.1 I prefer Mutual Fund because.

A b o v e t a b l e s u g g e s t s t h a t m y d a t a i s a d e q u a t e f o r f a c t o r

analysis because the value of KMO is 0.938 and Bartlett’s test of

sphericity value is statistically significant.

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling

Adequacy..938

Bartlett's Test of

Sphericity

Approx. Chi-

Square

2160.11

0

Df 21

Sig. .000

40

Rotated Matrix(a)

Communalities

InitialExtractio

n

4.1.Easy transferability 1.000 .977

4.1.High return 1.000 .969

4.1.Tax benefit 1.000 .974

4.1.Professional mgt 1.000 .996

4.1.Low trans. cost 1.000 .983

4.1.Diversification

advantage1.000 .962

4.1.Safety 1.000 .960

Component

1 2 3

4.1.Easy transferability .502 .714 .463

4.1.High return .581 .654 .451

4.1.Tax benefit .644 .532 .526

4.1.Professional mgt .419 .428 .798

4.1.Low trans. Cost .796 .436 .400

4.1.Diversification

advantage.476 .667 .539

4.1.Safety .617 .534 .542

41

Component Transformation

Matrix

Component 1 2 3

1 .596 .587 .548

2 -.655 -.039 .754

3 .464 -.809 .361

42

Interpretation:

From the above table we have come to know that from

various parameters the customer have selected but some major

parameters which are very essential for any customers while selecting

Mutual Fund as better. So, on the basis of these parameters the

customers choose their preference for investing in equity.

So, here the most important parameters customers

preferred is as under, Cost and safety, diversification and

transferability, professional management

1st parameter: - It is handled by Professional management.

2nd parameter: - Because of low transaction cost they prefer

Mutual Fund.

43

Q. 4.2 How much return you expect to receive from Mutual Fund?

Expected Return * Age

Age

Expected Return

11%-15%16%-20%

>20%

15-25 1 5 1026-35 4 13 836-45 7 9 746-55 0 3 256-65 0 0 1

Chi-Square Tests

Value Df

Asymp.

Sig. (2-

sided)

Pearson Chi-

Square

15.302

(a)12 .225

Likelihood

Ratio15.736 12 .204

Linear-by-

Linear

Association

.260 1 .610

N of Valid

Cases150

44

Expected Return

1

4

7

0 0

5

13

9

3

0

10

87

21

0

2

4

6

8

10

12

14

15-25 26-35 36-45 46-55 56-65

Age

ExpectedReturn 11%-15%

ExpectedReturn 16%-20%

ExpectedReturn >20%

Interpretation:


significance level). The Pearson Chi-square value comes out as


null hypothesis of no association between Age and Expected Return in


association between Age and Expected Return in Mutual Fund.

Q. 4 How much return you receive from your investment in Mutual Fund?

Receive Return * Age

Receive Return

5%-10%

11%-15%

16%-20%

>20%

Age15-25 0 3 2 326-35 2 5 3 436-45 2 3 4 146-55 1 1 0 156-65 0 0 0 0

Chi-Square Tests

45

Receive Return

0

3

5

3

100

23

4

0 00

34

1 10

0123456

5%-10%

0 2 2 1 0

15-25 26-35 36-45 46-55 56-65

Age

Receive Return

Interpretation:



7.931, which has a significance level of 0.05. We, therefore, reject null

hypothesis of no association between Age and Receive Return in


association between Age and Receive Return in Mutual Fund.

Value df

Asymp.

Sig. (2-

sided)

Pearson Chi-

Square

7.931(

a)16 .951

Likelihood

Ratio9.484 16 .892

Linear-by-

Linear

Association

.165 1 .685

N of Valid

Cases150

46

Expected Return * Occupation

Expected Return

11%-15%

16%-20

>20%

Student 0 4 9Occupatio

nService Class

2 4 1


Chi-Square Tests

Value df

Asymp.

Sig. (2-

sided)

Pearson Chi-

Square

25.202

(a)12 .014

Likelihood

Ratio27.888 12 .006

Linear-by-

Linear

Association

1.430 1 .232

N of Valid

Cases150

47

Interpretation:




null hypothesis of no association between Occupation and Expected

Return in Mutual Fund. It means that there exist a statistically

significant association between Occupation and Expected Return in

Mutual Fund.

Receive Return * Occupation

Receive Return

5%-10%

11%-15%

16%-20

>20%


nService Class

1 2 0 1


48

Expected Return

02 2

4 44 4

12

3

79

1

57 6

02468

101214

Stu

de

nt

Se

rvic

e C

lass

Bu

sin

ess

ma

n

Pro

fess

ion

al

Ho

use

Wife

Occupation


Expected Return 16%-20


Chi-Square Tests

Receive Return

0

2 23

4

10

10

3

0

5

0

21

0

4

2

0123

456

5%-10% 0 1 0 3 1

Student ServiceBusinessmanProfessional House

Occupation

Receive Return

Interpretation:




null hypothesis of no association between Occupation and Receive

Return in Mutual Fund. It means that there exist a statistically

Value df

Asymp.

Sig. (2-

sided)

Pearson Chi-

Square

24.978

(a)16 .070

Likelihood

Ratio28.475 16 .028

Linear-by-

Linear

Association

3.586 1 .058

N of Valid

Cases150

49

significant association between Occupation and Receive Return in

Mutual Fund.

Question: 5. I prefer Equity and Mutual Fund because.

Here we can not able to done Factor Analysis because only 9

respondents are prefer Equity and Mutual Fund and we have need of

atleast 30 respondents for doing Factor Analysis. So, we can not do

here Factor Analysis.

Q. 6 Reason for not investing in Equity.

Reason not invest in

Equity

High Risk 43

Interested In Secure

Money27

Want Constant Return 17

Reason not invest in Equity

43

27

17

05

101520253035404550

High Risk interestedsecure money

ConstantReturn

Reason not invest inEquity

Interpretation:

From the graph we can see that the most of the people not

investing in Equity is because of high risk that is 28.7% means 43

50

people not invest because of this reason. Other 27 people interested in

secure money and rests want constant return.

Q. 7 Reason for not investing in Mutual Fund.

Reason not invest in Mutual Fund

High Risk taker 11

Want High Return 65

Any Other 3

Reason not invest in Mutual Fund

11

65

3

0

10

20

30

40

50

60

70

High Risk taker Want HighReturn

Any Other

Reason not invest in MutualFund

Interpretation:

From the graph we can see that the most of the people not

investing in Mutual Fund is because they want high return that is

43.3% means 65 people not invest because of this reason. Other 11

people interested in taking high risk and rest are not investing because

of any other their personal reason.

51

FINDINGS

• Out of 150 respondents 136 are aware of Equity and from that of

150 respondents 64 are invest in it.

• Out of 150 respondents 144 are aware of Mutual Fund and from

that of 150 respondents 70 are invest in it.

• 74 respondents are thinking that Mutual Fund is better for

investment; while 68 respondents prefer Equity for investment.

• For preferring to Equity the main reason is Equity has no locking

period.

• Respondents want High return so they are not investing in

Mutual Fund.

• Respondents are not investing in Equity because of High risk.

• For Mutual Fund preference respondents select the main criteria

Tax benefit, Professional Management and Safety and

Diversification.

52

CONCLUSION

The numbers of respondents are aware with Mutual Fund.

As per preference of Equity and Mutual Fund both are some what

in equal proportion popular.

In terms of getting return from Equity and Mutual Fund they

want high return.

Here, we can also see that the respondents are also not investing

in Equity because of High Risk involved in investing Equity as

they think.

53

RECOMMENDATION

Increase the investment proportion of the investor than they are

aware.

Company should have to concentrate on those respondents who

are not investing in Equity because of high risk than convert

them in investing Mutual Fund. And also for those who is not

investing in Mutual Fund for high return convert them investing

in Equity.

The respondents who want high return increase their investment

proportion in Equity. So, that they can earn High Return.

From doing Factor Analysis we come t o know that the factor

which influence highly on respondents are as Cost, Safety,

Professional Management, Diversification. So, by doing

Advertisement and give knowledge about it to the respondents

who are not investing in Mutual Fund.

54

BIBLIOGRAPHY

Books:

Donald R Cooper & Pamela S Schindler, “Business Research

Methods”, Eighth Edition, Tata McGraw-Hill, New York, 2003.

Gordon & Natrajan, “Financial Markets And Services ” Second

Revised Edition Reprint, Himalaya Publishing House, 2005.

Punithavathy Pandian, “Security Analysis & Portfolio

Management” Edition, Vikas Publishing Housing Pvt. Ltd, 2007.

Websites:

www.5paisa.com

www.amfi.com

www.indiainfoline.com

55

http://www.indiainfoline.com/

http://www.amfi.com/

http://www.sharekhan.com/

APPENDIX

QUESTIONNAIRE

Myself Tejash D. Gandhi student of MBA studying at SRIMCA

College, Bardoli. I had prepared this questionnaire for project work

meant for educational purpose only. On “Comparison between

Equity & Mutual Fund”

No personal information will be disclosed in any form at any

where.

1. Awareness

Investment

Equity

Mutual Fund

2. Which one of this is better for investment Equity or Mutual

Fund?

(Give rank i.e. 1, 2, 3)

[ ] Equity is better

[ ] Mutual Fund is better

[ ] Both are same.

If you have chosen option 1 then fill up question 3.



56

3.1 I prefer Equity because

[Give rate to following statement]

Sr.

No

Statement Stron

gly

Disag

ree

[1]

Disagr

ee

[2]

Neutral

[3]

Agree

[4]

Strongl

y

Agree

[5]

1 I want to take

high risk.

2 Marketability is

on asset price.

3 Fluctuation is

controlled.

4 Equity is more

flexible as no

locking period.

5 Modify the

investment.

3.2 How much return you expect to receive from Equity?

[ ] 5% -10% [ ] 11% - 15%

[ ] 16% - 20% [ ] > 20%

For those who are investing

3.3 How much return you receive from your investment in

Equity?

[ ] 5% -10% [ ] 11% - 15%

[ ] 16% - 20% [ ] > 20%

57

4.1 I prefer Mutual Fund to Equity because


Sr.

No

Statement Stron

gly

Disag

ree

[1]

Disagr

ee

[2]

Neutral

[3]

Agree

[4]

Strongl

y

Agree

[5]

1 Easy

Transferability

2 High Return

3 Tax Benefit

4 Professional

Management

5 Low transaction

6 Diversification

advantage

7 For Safety.

4.2 How much return you expect to receive from Mutual Fund?

[ ] 5% -10% [ ] 11% - 15%

[ ] 16% - 20% [ ] > 20%

For those who are investing

4.3 How much return you receive from your investment in

Mutual Fund?

[ ] 5% -10% [ ] 11% - 15%

[ ] 16% - 20% [ ] > 20%

58

5. I prefer Equity & Mutual Fund because


Sr.

No

Statement Stron

gly

Disag

ree

[1]

Disagr

ee

[2]

Neutral

[3]

Agree

[4]

Strongl

y

Agree

[5]

1 Hedge advantage

2 Modify the

investment

3 Profit is seen

4 Return can

maintain

5 For diversifying

the risk

6 Tax benefit

6. Reason for not investing in Equity?

[ ] Because of High Risk

[ ] Interested in secure money

[ ] Want constant return

[ ] Any other (Specify)

______________________________________________

7. Reason for not investing in Mutual Fund?

[ ] High risk taker

[ ] Want high return

[ ] Any other (Specify)

______________________________________________

59

DEMOGRAPHIC PROFILE

Name: - ___________________________________________________________

Age Group: -

60

[ ] 15 – 25

[ ] 26 – 35

[ ] 36 – 45

[ ] > 45

61

Educational status: -

62

[ ] Under graduate

[ ] Post graduate

[ ] Graduate

[ ] Any Other (Specify)

________

63

Occupation: -

64

[ ] Student

[ ] Businessman

[ ] House wife

[ ] Service class

[ ] Professional

65

Household Monthly Income: -

[ ] <5000 [ ] 5001 – 15000 [ ] 15001 – 25000 [ ] > 25000

THANK YOU

66

Final Project

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