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
1

Deposits,

GOI

Bonds,

Loan

Products

and

other

Small

Saving

Instruments. It also owns and operates web sites, [Link]

and [Link].

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

Info Lines research is acknowledged by none other than Forbes as The
best of the web and ----a must read for investor in Asia. India Info
Lines 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.

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.

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.
4

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
investors requirements to ensure that their needs are taken care of.
Thus, they perform the function of adding value to the investors 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
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,
5

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. [Link]

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)

[Link] Ahuja

(Independent Director)

[Link] Vikamsey (independent director)

[Link] Sinha

(independent director)
6

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, IPOs, bonds, post office:

Saving and several other investment products

Lets 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

IPOs

by

simply

logging

on

to

[Link] Investing in IPOs 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 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 [Link] 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.

Mutual fund balanced fund:

These are funds where objective is to generate reasonable longterm 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.
10

INTRODUCTION OF THE TOPIC

COMPARISON BETWEEN EQUITY AND MUTUAL FUND

Equity shares:
11

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.

Income shares:

These stocks belong to companies that have comparatively stable

operations and limited growth opportunities. The bank shares and some

12

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.
Equity hedge (protect) against the inflation.
13

 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).
14

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 todays
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

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
15

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.

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.
16

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.

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;

17

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);
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 closeended 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;

18

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.
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.
19

RESEARCH METHODOLOGY

Problem definition

20

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 [Link]

[Link]

[Link]

From book- Financial Markets And Financial Services

Geographical Area:
21

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.

22

DATA ANALYSIS AND INTERPRETATION

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

Particular
Equity
Mutual Fund

Aware
136
144

Invest
64
70

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.

23

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

Chi-Square
Equity * Age
Equity is Better

Age

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

First
15
33
13
3
2

Second
6
17
15
0
0

Third
13
15
9
5
1

Chi-Square Tests

Asymp.
Value

Df

Sig. (2sided)

Pearson Chi-

28.110(

Square
Likelihood

a)

Ratio

20.319

12

.005

12

.061
24

Linear-byLinear
Association
N of Valid
Cases

.016

.899

150

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

Age

15-25
26-35

First
17
27

Second
14
32

Third
3
6
25

36-45
46-55
56-65

23
5
1

13
3
2

3
0
0

Chi-Square Tests

Asymp.
Value

df

Sig. (2sided)

Pearson Chi-

20.617(

Square
Likelihood

a)

Ratio
Linear-byLinear
Association
N of Valid
Cases

12

.056

11.516

12

.485

1.686

.194

150

26

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.

Equity * Income

Equity is Better

Income

<5000
500115000
1500125000
>25000

First
1

Second
4

Third
4

26

12

23

24

15

17

Chi-Square Tests

27

Asymp.
Value

df

Sig. (2sided)

Pearson Chi-

14.336(

Square

a)

Likelihood Ratio
Linear-by-Linear
Association
N of Valid Cases

.111

14.524

.105

6.516

.011

150

Interpretation:
The Chi-square test is carried out at 95% confidence level
(0.05 significance level). The Pearson Chi-square value comes out as
14.336, 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 Income and Equity is
better.
28

Mutual Fund * Income

Mutual Fund is Better

Income

<5000
500115000
1500125000
>25000

First
8

Second
0

Third
1

30

26

22

21

13

17

Asymp.
Value

df

Sig. (2sided)

Chi-Square

Pearson Chi-

13.274(

Square
Likelihood

a)

Ratio
Linear-byLinear
Association
N of Valid
Cases

.151
Tests

16.136

.064

.577

.448
29

150

Interpretation:
The Chi-square test is carried out at 95% confidence level
(0.05 significance level). The Pearson Chi-square value comes out as
13.274, which has a significance level of 0.05. We, therefore, reject null
hypothesis of no association between Income and Mutual Fund. It means
that there exist a statistically significant association between Income and
Mutual Fund is better.

Equity * Occupation
30

Equity is better

Student
Occupation Service Class
Businessman
Professional
House Wife

First
16
19
9
12
12

Second
5
5
13
9
6

Third
9
6
8
8
12

Chi-Square Tests

Asymp.
Value

df

Sig. (2sided)

Pearson Chi-

16.943(

Square
Likelihood

a)

Ratio
Linear-byLinear
Association
N of Valid
Cases

12

.152

15.655

12

.208

1.989

.158

150

31

Interpretation:
The Chi-square test is carried out at 95% confidence level
(0.05 significance level). The Pearson Chi-square value comes out as
16.943, which has a significance level of 0.05. We, therefore, reject null
hypothesis of no association between Occupation and Equity. It means
that there exist a statistically significant association between Occupation
and Equity is better.

Mutual Fund * Occupation

Mutual Fund is better

Student
Occupation Service Class
Businessman
Professional
House Wife

First
13
8
21
14
17

Second
14
19
8
12
11

Third
3
3
1
3
2

32

Chi-Square Tests
Asymp.
Value

df

Sig. (2sided)

Pearson Chi-

16.936(

Square
Likelihood

a)

Ratio
Linear-byLinear
Association
N of Valid
Cases

12

.152

16.494

12

.170

2.573

.109

150

33

Interpretation:
The Chi-square test is carried out at 95% confidence level
(0.05 significance level). The Pearson Chi-square value comes out as
16.94, which has a significance level of 0.05. We, therefore, reject null
hypothesis of no association between Occupation and Mutual Fund. It
means that there exist a statistically significant association between
Occupation and Mutual Fund is better.

Now we perform factor analysis to reduce total

variables by dropping the insignificant variables. In
KMO and Bartlett's Test

life, the

Kaiser-Meyer-Olkin Measure of

of

Sampling Adequacy.
Approx. Chi-

real

number
.941

1824.752

Bartlett's Test of

Square

Sphericity

Df

15

Sig.

.000

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.

34

Above table suggests that my data is adequate for factor analysis

because the value of KMO is 0.941 and Bartletts test of sphericity value
is statistically significant.

Communalities
Initial Extraction
[Link] high risk

1.000

.988

[Link] on assets price 1.000

.959

[Link] control

1.000

.973

[Link] no locking period

1.000

.969

[Link]

1.000

.937

[Link] is easier

1.000

.958
35

Total Variance Explained

Extraction Sums
Initial Eigenvalues

of Squared

Rotation Sums of
Squared Loadings

Loadings
Co
mp
on

% of
Total

en

Varian
ce

Cumul
ative %

% of
Total Varia

% of

Cum
ulati Total

nce

ve %

5.682

94.696

94.696

5.68

94.69

94.6

96

.103

1.718

96.414

.103

1.718

1.437

97.850

.897

98.748

.697

99.445

8.622E
-02
5.385E
-02
4.183E
-02
3.330E
-02

.555

96.4
14

anc
e

t
1

Vari

3.290

2.494

54.8
40
41.5
73

Cumul
ative
%

54.840

96.414

100.00
0

36

Component Matrix(a)
Component

[Link] high risk

.958

.264

[Link] on assets price .976 -7.683E-02

[Link] control

.974

-.152

[Link] no locking period

.984 -4.306E-02

[Link]

.967 3.938E-02

[Link] is easier

.979 -2.649E-02

Rotated Component Matrix(a)

Component
1

.551

.827

[Link] on assets price .788

.581

[Link] high risk

[Link] is control

.836

.523

[Link] no locking period

.772

.611

[Link]

.705

.663

[Link] is easier

.757

.621

37

Component Transformation Matrix

Component

.756

.655

-.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.

So, here the most important parameters customers

preferred is as under,
1st parameter
Fluctuation is controlled.
2nd parameter
Their capabilities of Taking High Risk.

38

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

Expected Return * Age

Expected Return

3
2
0
0
0

11%15%
5
8
4
1
1

Value

df

5%-10%
Age

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

Chi-Square

16%>20%
20%
2
5
9
14
2
9
0
2
0
1
Asymp.
Sig. (2-

Tests

sided)
Pearson Chi-

12.179(

Square
Likelihood

a)

Ratio
Linear-byLinear
Association
N of Valid
Cases

16

.732

13.517

16

.635

.072

.789
39

150

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

Q. 3.3 How much return you receive from your investment in Equity?
Receive Return * Age
40

Receive Return

Age

5%10%
4
1
1
0
0

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

11%15%
2
11
2
0
0

16%20%
5
5
1
0
0

>20%
3
5
5
2
1

Chi-Square Tests
Asymp.
Value

df

Sig. (2sided)

Pearson Chi-

21.655(

Square
Likelihood

a)

Ratio
Linear-byLinear
Association
N of Valid
Cases

16

.155

21.625

16

.156

.207

.649

150

41

Interpretation:
The Chi-square test is carried out at 95% confidence level
(0.05 significance level). The Pearson Chi-square value comes out as
21.655, which has a significance level of 0.05. We, therefore, reject 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%
Student
Occupation Service Class
Businessman
Professional
House Wife

3
0
1
0
1

11%15%
5
4
2
5
3

16%20
1
9
0
1
2

>20%
7
6
6
6
6

Chi-Square Tests
42

Asymp.
Value

Df

Sig. (2sided)

Pearson Chi-

32.112(

Square
Likelihood

a)

Ratio
Linear-byLinear
Association
N of Valid
Cases

16

.010

29.979

16

.018

1.566

.211

150

43

Interpretation:
The Chi-square test is carried out at 95% confidence level (0.05
significance level). The Pearson Chi-square value comes out as 32.112,
which has a significance level of 0.05. We, therefore, reject null
hypothesis of no association between Occupation and Expected Return in
Equity. It means that there exist a statistically significant association
between Occupation and Expected Return Equity.

Receive return * Occupation

Receive
Return
5%10%
3
2
0
0
1

Student
Occupation Service Class
Businessman
Professional
House Wife

11%15%
2
6
2
3
2

16%20
3
3
0
3
2

>20%
4
1
5
3
3

Chi-Square Tests
Asymp.
Value

df

Sig. (2sided)

Pearson Chi-

16.547(a

Square

Likelihood Ratio
Linear-by-Linear
Association
N of Valid Cases

16

.415

20.024

16

.219

.531

.466

150

44

Interpretation:
The Chi-square test is carried out at 95% confidence level
(0.05 significance level). The Pearson Chi-square value comes out as
16.547, which has a significance level of 0.05. We, therefore, reject 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.

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

Bartlett's Test of Sphericity

.938

Approx. Chi-Square

2160.110

Df

21

Sig.

.000

45

Above table suggests that my data is adequate for factor analysis because
the value of KMO is 0.938 and Bartletts test of sphericity value is
statistically significant.

Communalities
Initial Extraction
[Link] transferability

1.000

.977

[Link] return

1.000

.969

[Link] benefit

1.000

.974

[Link] mgt

1.000

.996

[Link] trans. cost

1.000

.983

[Link] advantage 1.000

.962

[Link]

1.000

.960

Component
1
Rotated
Matrix(a)

[Link] transferability

.502 .714 .463

[Link] return

.581 .654 .451

[Link] benefit

.644 .532 .526

[Link] mgt

.419 .428 .798

[Link] trans. Cost

.796 .436 .400

[Link] advantage .476 .667 .539

[Link]

.617 .534 .542

46

47

Component Transformation Matrix

Component

.596

.587

.548

-.655

-.039

.754

.464

-.809

.361

Interpretation:
From the above table we have come to know that from
various parameters the customer have selected but some major
48

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.

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

Expected Return * Age

49

Expected Return
11%-15%
Age

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

1
4
7
0
0

16%20%
5
13
9
3
0

>20%
10
8
7
2
1

Chi-Square Tests
Asymp.
Value

Df

Sig. (2sided)

Pearson Chi-

15.302(

Square
Likelihood

a)

Ratio
Linear-byLinear
Association
N of Valid
Cases

12

.225

15.736

12

.204

.260

.610

150

50

Interpretation:
The Chi-square test is carried out at 95% confidence level (0.05
significance level). The Pearson Chi-square value comes out as 15.302,
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 Mutual Fund.

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

Fund?

Receive Return * Age

Receive Return

Age

15-25
26-35

5%10%
0
2

11%15%
3
5

16%20%
2
3

>20%
3
4
51

36-45
46-55
56-65

2
1
0

3
1
0

4
0
0

1
1
0

Chi-Square Tests
Asymp.
Value

df

Sig. (2sided)

Pearson Chi-

7.931(a

Square
Likelihood

Ratio
Linear-byLinear
Association
N of Valid
Cases

16

.951

9.484

16

.892

.165

.685

150

52

Interpretation:
The Chi-square test is carried out at 95% confidence level
(0.05 significance level). The Pearson Chi-square value comes out as
7.931, which has a significance level of 0.05. We, therefore, reject null
hypothesis of no association between Age and Receive Return in Mutual
Fund. It means that there exist a statistically significant association
between Age and Receive Return in Mutual Fund.

Expected Return * Occupation

Expected Return

Student
Occupation Service Class
Businessman
Professional
House Wife

11%15%
0
2
2
4
4

16%20
4
4
12
3
7

>20%
9
1
5
7
6

Chi-Square Tests
Asymp.
Value

df

Sig. (2sided)

Pearson Chi-

25.202(

Square
Likelihood

a)

Ratio
Linear-byLinear
Association
N of Valid
Cases

12

.014

27.888

12

.006

1.430

.232
53

150

Interpretation:
The Chi-square test is carried out at 95% confidence level
(0.05 significance level). The Pearson Chi-square value comes out as
25.202, which has a significance level of 0.05. We, therefore, reject 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.

54

Receive Return * Occupation

Receive Return

5%10%
0
1
0
3
1

Student
Occupation Service Class
Businessman
Professional
House Wife

11%15%
2
2
3
4
1

16%20
1
0
3
0
5

>20%
2
1
0
4
2

Chi-Square Tests
Asymp.
Value

df

Sig. (2sided)

Pearson Chi-

24.978(

Square
Likelihood

a)

Ratio
Linear-byLinear
Association
N of Valid
Cases

16

.070

28.475

16

.028

3.586

.058

150

55

Interpretation:
The Chi-square test is carried out at 95% confidence level
(0.05 significance level). The Pearson Chi-square value comes out as
24.978, which has a significance level of 0.05. We, therefore, reject null
hypothesis of no association between Occupation and Receive Return in
Mutual Fund. It means that there exist a statistically 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

High Risk
Interested In Secure

Equity
43
27
56

Money
Want Constant Return

17

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 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.

High Risk taker

Want High Return
Any Other

Reason not invest in Mutual Fund

11
65
3

57

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.

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.

58

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.

CONCLUSION

The numbers of respondents are aware with Mutual Fund.

59

 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.

60

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.

61

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:

[Link]
[Link]
[Link]

62

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?
63

(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.

If you have chosen option 2 then fill up question 4.
If you have chosen option 3 then fill up question 5.

3.1 I prefer Equity because

[Give rate to following statement]

Sr.

Statement

No

Stron

Disagre

gly

Disag
ree

Neutral

Agree

Strongl
y Agree

[3]

[4]

[5]

[2]

[1]
1

I want to take high

risk.
Marketability is on

asset price.
Fluctuation is

controlled.
Equity is more
64

flexible as no
5

locking period.
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%

4.1 I prefer Mutual Fund to Equity because

[Give rate to following statement]

Sr.

Statement

No

Stron

Disagre

gly

Disag
ree

Neutral

Agree

Strongl
y Agree

[3]

[4]

[5]

[2]

[1]
1

Easy

2
3

Transferability
High Return
Tax Benefit
65

Professional

5
6

Management
Low transaction
Diversification

advantage
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%

5. I prefer Equity & Mutual Fund because

[Give rate to following statement]

Sr.
No

Statement

Stron

Disagre

gly

Disag
ree

Neutral

Agree

Strongl
y Agree

[3]

[4]

[5]

[2]

[1]
66

1
2

Hedge advantage
Modify the

3
4

investment
Profit is seen
Return can

maintain
For diversifying

the risk
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)
______________________________________________

DEMOGRAPHIC PROFILE

Name: - ___________________________________________________________

67

Age Group: -

68

[ ] 15 25

[ ] 36 45

[ ] 26 35

[ ] > 45

Educational status: [ ] Under graduate

[ ] Graduate

[ ] Post graduate

[ ] Any Other (Specify) ________

Occupation: [ ] Student

[ ] Service class

[ ] Businessman

[ ] Professional

[ ] House wife

Household Monthly Income: [ ] <5000

[ ] 15001 25000

[ ] 5001 15000
[ ] > 25000

THANK YOU

69