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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.
1
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.
2
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.
3
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)
5
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
6
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
7
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.
8
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.
9
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.
10
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.
11
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).
12
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.
13
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.
14
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);
15
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.
16
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.
17
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
18
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.
19
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
20
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:
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.
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
Mutual Fund is better
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:
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
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:
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
First Second ThirdStudent 13 14 3
Occupation
Service Class
8 19 3
Businessman 21 8 1Professional 14 12 3House Wife 17 11 2
28
Chi-Square Tests
Mutual Fund is better
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:
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
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
3.1.Marketability on assets
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
3.1.Marketability on assets
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 11%-15%
Expected Return 16%-20%
Expected Return >20%
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.
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 11%-15%
Receive Return 16%-20%
Receive Return >20%
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%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
Se
rvic
e C
lass
Bu
sin
ess
ma
n
Pro
fess
ion
al
Ho
use
Wife
Occupation
Expected Return 5%-10%
Expected Return 11%-15%
Expected Return 16%-20
Expected Return >20%
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
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%
Student 3 2 3 4Occupatio
nService Class
2 6 3 1
Businessman 0 2 0 5Professional 0 3 3 3House Wife 1 2 2 3
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 5%-10%
Receive Return 11%-15%
Receive Return 16%-20
Receive Return >20%
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.
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:
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
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:
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.
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
Businessman 2 12 5Professional 4 3 7House Wife 4 7 6
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:
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.
Receive Return * Occupation
Receive Return
5%-10%
11%-15%
16%-20
>20%
Student 0 2 1 2Occupatio
nService Class
1 2 0 1
Businessman 0 3 3 0Professional 3 4 0 4House Wife 1 1 5 2
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 11%-15%
Expected Return 16%-20
Expected Return >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:
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
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
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.
If you have chosen option 2 then fill up question 4.
If you have chosen option 3 then fill up question 5.
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
[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 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
[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 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
67