Chapter No 1: - Introduction: 1.1 Investment

PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS
CHAPTER NO 1: -INTRODUCTION
In this modern era, money plays an important role in everyone’s life. In order to overcome the
problems in future they have to invest their money. The habit of saving in one’s life is investment
cultivates. Investment goals vary from person to person depending upon their requirements.
1.1 INVESTMENT
An investment is an asset or item acquired with the goal of generating income or appreciation.
Appreciation refers to an increase in the value of an asset over time. when an individual purchases
a good as an investment, the intent is not to consume the good but rather to use it in the future to
create wealth. An investment always concerns the outlay of some asset today-time , money, or
effort-in hopes of a greater payoff in the future than what was originally put in.
For example, an investor may purchase a monetary asset now with the idea that the asset will
provide income in the future or will later be sold at a higher price for a profit.
Investment is the commitment of funds which is saved from current consumption with the hope
that some benefits will be received in future. Savings of the people are invested in various assets
depending on their preferred risk and return, safety of money, liquidity, the available avenues for
investment, etc.
Investment is nothing but buying a financial product with an expectation of favorable future returns.
Investing is a serious subject that can have a major impact on investor’s future well- being.
Investors have a lot of investment avenues to park their savings. The risk and returns available
from each of these investment avenues are completely different. In India, many investment
avenues are available where some are marketable and liquid while others are non-marketable and
some of them are highly risky while others are almost riskless. The investor has to properly choose
the investment avenues depending upon his specific need, risk preference, and returns excepted.
The Investors should always focus only on the safe investment avenues. Common people should
cultivate the habit of saving a part of their income at the early stage of their life in order to get a
better and safe future. The investors also should have full knowledge of the investment options in
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COMPARATIVE STUDY ON INVESTMENT IN MUTUAL FUNDS AND DIRECT EQUITY SHARES
order to avoid loss in future. The main objective of comparing investment in equity shares with
mutual fund schemes is to analyze the comparison of mutual funds with equities by considering
risk, return, safety and liquidity.
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1.2 Introduction To Financial System

Every country’s financial system consists of financial markets, financial intermediaries, financial
instruments or financial instruments. Finance is the science of many management. Finance
represents resources as funds needed for specific activities.
When reference is made to the financial needs of an organization, the financing is also called
“funds” or “capital”. “system” in the term “financial system” means a complex or closely related
group of institutions, agents, practices, markets, transactions, claims and obligations in the
economy.
There are people with territories, people, and surplus funds. The financial system or banking sector
acts as a facilitator to facilitate surplus-to-deficit flows. The financial system is a combination of
multiple institutions, markets, regulation, laws, practices, fund managers, analysts, operations,
claims and debts.
The Indian financial system consists of organized sector and unorganized sector. The organized
sector is structured and largely falls under the regulation and control of governing bodies, whereas,
unorganized sector is more of unstructured and has the freeways in terms of regulations and
controlling power. The stability of financial markets has an impact on the functioning of the
economy and thus the financial system plays a vital role in the economic prosperity.
Let us study the concept of mutual fund and equity
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1.3 Concept of Mutual Fund

As you may know, mutual funds it was another obscure financial product that became part of our
daily lives. In the United States, more than half of eight million individuals or households invest
in mutual funds. In other words, in the United States alone, it is invested in trillions of dollars in
mutual funds. After this, it is all common sense that investing in a mutual fund is better than simply
saving money, but leaving it in a savings account. However, most people are about to finish
understanding of funds. It cannot help people in mutual fund sales to speak strange words separated
by terminology that many investor do not understand.
The Investment trust industry in India was led by the government of India, and in 1964 the unit
trust of India was established. In 1993, SEBI regulations were replaced by the comprehensively
revised Mutual Fund Regulation in 1996. It has been 38 years for mutual funds to exist in this
country at the end of millennium. The ride for the last 38 years was not smooth. The opinions of
investors are still divided. Some are for mutual funds and others are against mutual funds. UTI
began its activity in July 1964. The impulse to build formal systems comes from a desire to
strengthen the tendency to save and invest in low and intermediate groups. UTI was born in an era
characterized by the large political and economic turmoil that set the financial markets back.
Entrepreneurs were very reluctant to enter the capital market.
1.3.1 Meaning of Mutual fund

A mutual fund is a type of financial vehicle made up of a pool of money collected from many
investors to invest in securities like stocks, bonds, money market instruments, and other assets.
Mutual funds are operated by professional money managers, who allocate the fund's assets and
attempt to produce capital gains or income for the fund's investors. A mutual fund's portfolio is
structured and maintained to match the investment objectives stated in its prospectus.
Mutual funds give small or individual investors access to professionally managed portfolios of
equities, bonds, and other securities. Each shareholder, therefore, participates proportionally in the
gains or losses of the fund. Mutual funds invest in a vast number of securities, and performance is
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usually tracked as the change in the total market cap of the fund—derived by the aggregating
performance of the underlying investments.
Mutual funds are a type of investment investors use to raise money so that each investor can
participate in a portfolio of securities. Individual investors do not actually own each security. He
invest in mutual funds. The main advantage of mutual funds is that they provide a way for
investors to achieve investment diversification without having to invest a lot of money. The first
mutual fund was the Massachusetts Trust fund, which was introduced in 1924. At the end of the
first year , the fund had 250 investors and $63,600 in assets. By the end of 1995, the fund had
reached $1.8 billion with 73,500 investors. There are more than 7,000 mutual funds to choose
from. You may wonder why you should choose mutual funds. Mutual funds have two big
advantages over paying stocks individually. Their strengths are diversified through professional
management without having to invest a lot of money.
Decentralization is important to reduce risk. By owning several companies shares, the value of the
fund shares will not be compromised even if the performance of individual companies is low. The
choice of securities to buy, cash and securities distribution , and when to buy are all made by the
fund manager or management. Fund managers have the training, time and resources to make the
best investment decisions based on information. This fund is also part of a fund where investors
can switch funds at no additional cost. Most Mutual funds are able to check the amount set on a
regular basis and automatically transfer funds on a regular basis once a month, including the
privilege of receiving checks. This type of investment is called the dollar cost average, which is
the same as the monthly average for people who are investing in regularly set dollar amounts.
This type of investment is the average of the dollar cost.
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1.3.2 Industry Profile of Mutual Fund
The investment fund industry is one of the emerging industries in India. Currently, there are 40
players in the mutual fund company in India. The number of players in public places has decreased
from 11 to 5. The public place was gradually demoted to legacy as it caught up with the big wave
of the market in the proportion to the players in the private land.
The Investment Trusts Association in India is a business entity that promotes the growth of
investment trust companies in India. It enforces an experienced and vigorous position in
identifying the steps that need to be taken to protect investors and encourage the field of mutual
funding.
It is worth noting that the AMFI is not a self-regulatory company (SOR) and that the hints do not
bind the members of the company. By its very nature, AMFI plays the role of advisor or counselor
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within a mutual price point company. The recommendations emerge as mandatory and most
convenient if they are included in the regulatory framework that the Securities and Exchange
Commission (SEBI) of India has prescribed for mutual budgeting.
Indian mutual fund companies follow a three-tier system as demonstrated below.
1. Sponsor
2. Trust
3. Asset management
Sponsor
Sponsors are those who are thinking of starting a mutual fund. Sponsors will conduct SEBI routine
procedures for market regulators and also mutual fund. Not everyone can start a joint fund. SEBI
grants the right to open a joint fund for integrity. This is because the financial quarters and the
large spending on the sector and the simple factors they should make are simple factors.
Trust
Once SEBI is satisfied with the proposed sponsor’s credibility and eligibility, the sponsor then
agrees to the Indian Trust Act of 1882, and the trust can not enter into a contract because it has no
criminal identity in India. Therefore, the trustee is a legal individual to act on behalf of believing.
The contract is in the name of the trustee. Once the trust is created, it is registered with SEBI and
is known as a general trust fund.
Asset Management
The trustee appoints AMC, which has been established as a corporation, to manage the cash of the
investor. In the case of mutual funds, AMC pays for the service instead of this money management.
This price must be an investor and is deducted from the money raised by them.
1.3.3 NAV (Net Asset Value)
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NAV means Net Asset Value. The investments made by a Mutual Fund are marked to market on
daily basis. In the other words, we can say that current market value of such investments is
calculated on daily basis. NAV is arrived at after deducting all the liabilities (except unit capital)
of the fund from the realizable value of all assets and dividing by number of units outstanding.
Therefore, NAV on particular day reflects the realizable value that the investor will get for each
unit if the scheme is liquidated on that date. This NAV keeps on changing with the changes in the
market rates of equity and bond markets. Therefore, the investment in mutual funds is not risk free,
but a good managed Fund can give you regular and higher returns than when you can get from
fixed deposits of a bank etc.
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1.3.4 Schemes of Mutual Funds
According to the maturity plan:
Mutual fund plans are divided into open and close schemes on maturity dates.
• Open-ended schemes
There is no fixed redemption date for these funds. In general, they are open all year round for
subscription and exchange. Their prices are interrelated and investors can buy or sell units at any
exchange rate associated with their daily net asset value (NAV). From an investor’s perspective,
it is more liquid than close-end funds.
• Closed-ended schemes
These funds were first opened during the public offering (IPO) and then closed into and entered.
The redemption date is fixed for these funds. And closed-end funding is generally open for
preliminary public offerings, most effectively for subscriptions during an accurate period. One of
the characteristics of the closed end is that it is generally traded with a discount to NAV. However,
as the maturity approaches, the discount diminishes. Closed-end funds are listed on stock
exchanges where investors should buy or advertise their units from the secondary market at any
time.
• Interval fund
Interval Schemes are that scheme, which combines the features of open-ended and close-ended
schemes. The units may be traded on the stock exchange or may be open for sale or redemption
during pre-determined intervals at NAV related prices.
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1.3.5 Mutual Fund scheme by investment purpose
• Equity fund/Growth fund
The funds to invest in stocks are called stock funds. The main purpose of the growth fund is to
provide funds for mid- to long-term investment. It is an ideal plan for investor who want to raise
capital. Several types of equity funds (e.g., diversified funds, industrial funds, index funds).
• Income Fund
Income funds are also known as debt funds. The main purpose of the income fund is to provide
investors with ordinary income. These funds invest primarily in high quality fixed income
securities such as bonds, government bonds, commercial paper and other currency instruments.
Income funds are ideal for medium and long-term investors.
• Money market fund
This fund invests in liquid money market products. The investment period can be as long as one
day. They provide easy mobility. This fund is ideal for institutional investors and companies
investing in funds in the short term.
• Balanced Fund
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Some of these funds invest in stocks and instruments (debts) that hold bonds. They provide a
positive component of capital adequacy, while providing a stable return and reducing volatility in
the fund. It is an ideal option for mid-to long-term investors who want to take intermediate risk.
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1.3.6 Advantages of Mutual Funds:

If mutual funds are emerging as the favorite investment vehicle, it is because of the many
advantages they have other forms and the avenues of investing, particularly for the investor who
has limited resources available in terms of capital and the ability to carry out detailed research and
market monitoring. The following are the major advantages offered by mutual funds to all
investors:
• Portfolio Diversification:
Each Investor in the fund is a part owner of all the fund’s assets, thus enabling him to hold a
diversified investment portfolio even with a small amount of investment that would otherwise
require big capital.
• Professional Management:
Even if an investor has a big amount of capital available to him, he benefits from the professional
management skills brought in by the fund in the management of the investor’s portfolio. The
investment management skills, along with the needed research into available investment options,
ensure a much better return than what an investor can manage on his own. Few investors have the
skill and resources of their own to succeed in today’s fast moving, global and sophisticated markets.
• Reduction/Diversification of Risk:
When an investor invests directly, all the risk of potential loss of his own, whether he places a
deposit with a company or a bank, or he buys a share or debenture on his own or in any other from.
While investing in the pool of funds with investors, the potential losses are also shared with other
investors. The risk reduction is one of the most important benefits of a collective investment
vehicle like the mutual fund.
• Reduction of Transaction Costs:
What is true of risk as also true of the transaction costs. The investor bears all the costs of investing
such as brokerage or custody of securities. When going through a fund, he has the benefit of
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economics of scale; the funds pay lesser costs because of larger volumes, a benefit passed on to its
investors.
• Liquidity:
Often, investors hold shares or bonds they cannot directly, easily and quickly sell. When they
invest in the units of a fund, they can generally cash their investment any time, by selling their
units to the fund if open-ended, or selling them in the market if the fund is close-end. Liquidity of
investment is clearly a big benefit.
• Convenience And Flexibility:
Mutual fund management companies offer many investor services that a direct market investor
cannot get. Investors can easily transfer their holding from one scheme to the other; get updated
market information and so on.
• Tax Benefits:
Any income distributed after March 31, 2002 will be subject to tax in the assessment of all Unit
holders. However, as a measure of concession to unit holders of open-ended equity-oriented funds,
income distributions for the year ending march 31, 2003, will be taxed at a concessional rate of
10.5%
In case of individuals and Hindu Undivided Families a deduction upto Rs.9,000 from the total
income will be admissible in respect of income from investments specified in Section 80L,
including income from Units of the Mutual Fund. Units of the schemes are not subject to Wealth-
Tax and Gift-Tax.
Tax Benefit of Mutual Funds Equity-Linked Savings Scheme (ELSS) is a type of equity fund and
the only mutual fund scheme which qualifies for a tax deduction of Rs. 1.5 lakh per annum under
Section 80C of the Income Tax Act. An ELSS comes with a lock-in period of 3 years which means
an investment made in it cannot be withdrawn before 3 years.
• Choice of Schemes:
Mutual Funds offer a family of schemes to suit your varying needs over a lifetime.
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• 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.
• 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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1.3.7 Disadvantages of Mutual Funds:
No Control Over Costs:
An investor in a mutual fund has no control of the overall costs of investing. The investor pays
investment management fees as long as he remains with the fund, albeit in return for the
professional management and research. Fees are payable even if the value of his investments is
declining. A mutual fund investor also pays fund distribution costs, which he would not incur in
direct investing. However, this shortcoming only means that there is a cost to obtain the mutual
fund.
No Tailore-Made Portfolio:
Investors who invest on their own can build their own portfolios of shares and bonds and other
securities. Investing through fund means he delegates this decision to the fund managers. The very-
high-net-worth individuals or large corporate investors may find this to be a constraint in achieving
their objectives. An investor can choose from different investment plans and constructs a portfolio
to his choice.
Managing A Portfolio of Funds:
Availability of a large number of funds can actually mean too much choice for the investor. He
may again need advice on how to select a fund to achieve his objectives, quite similar to the
situation when he has individual shares or bonds to select.
The Wisdom of Professional Management:
That's right, this is not an advantage. The average mutual fund manager is no better at picking
stocks than the average nonprofessional, but charges fees.
No Control:
Unlike picking your own individual stocks, a mutual fund puts you in the passenger seat of
somebody else’s car.
Dilution:
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Mutual Funds generally have such small holdings of so many different stocks that insanely great
performance by a fund’s top holdings still doesn’t make much of a difference in a mutual fund’s
total performance.
• Buried Costs:
Many mutual funds specialize in burying their costs and in hiring salesmen who do not make those
costs clear to their clients.
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1.4 The Equity Shares

Equity capital is funds paid into a business by investors in exchange for common or preferred stock.
This represents the core funding of a business, to which debt funding may be added. Once invested,
these funds are at risk, since investors will not be repaid in the event of a corporate liquidation
until the claims of all other creditors have first been settled. Despite this risk, investors are willing
to provide equity capital for one or more of the following reasons:
• Owning a sufficient number of shares gives an investor some degree of control over the
business in which the investment has been made.
• The investee may periodically issue dividends to its stockholders.
• The price of the shares may appreciate over time, so that investors can sell their shares for
a profit.
From an accounting perspective, equity capital is considered to be all components of the

stockholders' equity section of the balance sheet, which includes the par value of all stock sold,
additional paid-in capital, retained earnings, and the offsetting amount of any treasury stock
(repurchased shares).
From a valuation perspective, equity capital is considered to be the net amount of any funds that
would be returned to investors if all assets were to be liquidated and all corporate liabilities settled.
In some cases, this may be a negative figure, since the market value of company assets may be
lower than the aggregate amount of liabilities.
1.4.1 MARKET CAPITALIZATION: THE REAL VALUATION
Let’s get deeper into this concept, Company A’s share price is Rs.100 and Company B’s share
price is Rs.200. Now, looking at the share price can you guess which company has more value and
is sounding more stable? With this limited information, you might think it’s Company B since its
share price is double the price of the other.
But, in reality, if we add some more facts to it, like Company A has 5,00,000 shares and company
B has 1,00,000 shares only.
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MARKET CAPITALIZATION = TOTAL NO. OF OUTSTANDING SHARES * PRICE OF

ONE SHARE
Let’s calculate the actual market cap now
Company A: 5,00,000*100= Rs.5 crore
Company B: 1,00,000*200= Rs.2 crore
So, now did you see how market cap defines the real aggregate valuation of a company, a strong
measure to check the company’s worth in the market.
DIFFERENT MARKET CAPITALIZATION ARRAYS IN STOCK

MARKET:
Here are the different types of market capitalization. Remember, the market is dynamic and share
prices keep fluctuating. So, there isn’t a fixed parameter for classifying companies. It’s normally
the 80-15-5 rule that is applied to categorize companies into large cap, mid cap, and small cap.
The top companies that cover upto 80% of total market cap of listed companies on BSE are large
cap companies.
• LARGE CAP:
Generally, businesses with a market capitalization of Rs. 20,000 crore or above fall in this category.
They are well established, considered more stable with a proven track record and ample of
information available on them. In most cases, they are also more expensive than other stocks
because of their popularity.
Some years ago, even companies with a market cap of Rs.10,000 crore used to be considered as
large cap, now they moved to mid cap category.
List of large cap companies in India Were-Axis bank, SBI, Bharti Airtel, Coal India, HDFC bank,
Hero MotoCorp, Infosys, ITC, ICICI bank, Maruti Suzuki, Kotak Mahindra, M&M Auto, Reliance
etc.
• MID CAP:
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These are enterprises with a market share usually between Rs. 5000- 20,000 crores. They have
high potential, lower market volatility and substantial information available on them.
List of mid cap companies in India are- CRISIL, Apollo Hospital, Blue Dart, TATA Global
Beverage, etc.
• SMALL CAP:
Smaller businesses with greater growth prospects, however they tend to be risky, with less
information available and high chances of failure as they are still testing their business models.
Their market value is usually below Rs. 5000 crores. The emerging startups having high growth
but high risk are mostly small cap companies.
List of Small cap Companies in India are- Bombay Dyeing, Career Point, EROS Intl, D-Link India,
Everest Ind, Gati, Fineotex Chem, Godawari Power, Indraprastha, etc.
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1.4.2 The Different Types Of Stock Classifications

When you buy stocks, you can choose from different types of stock classifications, including:
• Value stocks
Perhaps the most famous value investor of all time is Warren Buffett. That are well worth checking
out if you are keen to invest patiently over the long-term.
If you want to follow in the footsteps of successful value investors and find out how Warren Buffett
got so rich, you will need to understand the difference between when stocks are cheap and when
they are undervalued.
The key metric that successful value investors focus on is intrinsic value, which tells you what a
company is really worth.
When a company’s intrinsic value is higher than its share price, the stock may be undervalued and
vice versa when the intrinsic value is below the share price, the stock may be overvalued.
Value stocks that are on sale with defensible moats are not immune to stock market crashes but
over the long-term they have a history of outperforming as Berkshire Hathaway has demonstrated.
• Income stocks
As you grow older, your capacity for risk usually diminishes and it becomes ever more important
to focus on income over capital appreciation.
While dividend-paying stocks offer one path to earning a steady income from your nest-egg
investments, another option is to purchase a corporate bond fund provides a consistent income
stream.
• Defensive stocks
Defensive stocks should not be confused with defense stocks. The latter are stocks of companies
like State Bank of India (SBI), Ashok Leyland, etc. However, the former are stocks that are
expected to perform better than the overall market during bear markets. When dark clouds loom
over the economy and a downturn is expected, defensive stocks can provide a relative safe haven.
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These stocks won’t necessarily rise during bearish markets, though they may be more likely to do
so than the average stock in the SENSEX, Nifty50.
If you like the idea of earning an income while lowering portfolio risk during downturns, defensive
stocks can be a good portfolio fit.
• Growth stocks
A growth stock is expected to generate returns in excess of a company’s cost of capital. These
stocks tend to rise faster than the overall stock market but equally they can be more sensitive to
interest rate changes from a Fed rate hike and so fall faster too.
Growth stocks tend not pay dividends because management believes they can re-invest earnings
to produce higher returns than shareholders can earn elsewhere if dividends were paid.
• Penny stocks
For risk-seeking investors, penny stocks can provide the adrenaline rush that blue-chip and income
stocks rarely offer.
Penny stocks usually trade over-the-counter (OTC) on the pink sheets.
The underlying companies do not always have proven business models so the risk of them failing
is significantly higher than say a blue-chip stock, which is why you don’t see penny stocks much
on the BOMBAY STOCK EXCHANGE (BSE)
If you are attracted to penny stocks for the potential for big returns, it is best to consult with your
financial advisor to see if they are suitable. Usually, it is recommended to apportion only a small
percentage of a portfolio to such speculative stocks.
• Blue-chip stocks
If you like the rollercoaster ride that a growth stock can provide, a blue-chip stock may seem
downright boring to own. But don’t let that deter you from considering these slow-and-steady
stocks.
Blue-chip stocks are favored by wealthy investors and institutions because their revenues, profits,
and dividends tend to be comparatively stable and predictable.
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The common features of blue-chip stocks include:
• Long history of stable dividend payments to shareholders

• Dividend payout increases that meet or beat the rate of inflation
• Stable earnings power over many decades
• Usually a large corporation by market capitalization and member of NIFTY 50
Blue-chip stocks are generally the best-known companies in the India , such as, Reliance, Tata
Consultancy Service (TCS), ITC, Infosys, Hindustan Unilever Limited (HUL), Asian Paint, etc.
Although the companies of blue chip stocks are known for having solid financials, they are not
immune from stock market shocks.
Nevertheless, the long-term returns from holding a portfolio of blue-chip stocks have been stellar
and are best suited to investors who want exposure to equity markets yet lean towards being more
risk-averse than risk-seeking.
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1.4.3 Advantages of Equity Shares
More Income:
Equity Shareholders are the residual claimant of the profits after meeting all the fixed
commitments. The company may add to the profits by trading on equity. Thus equity
capital may get dividend at high in boom period.
Right to participate in the Control and Management:
Equity Shareholders have voting rights and elect competent persons as directors to control
and manage the affairs of the company.
Capital profits:
The market value of equity shares fluctuates directly with the profits of the company and
their real value based on the net worth of the company’s assets will increase the market
value of equity shares. It brings capital appreciation in their investments.
An Attraction of Persons having Limited Income:
Equity shares are mostly of lower denomination and persons of limited resources can
purchase these shares.
Tax Advantages:
Equity shares also offer tax advantages to the investor. The larger yield on equity shares
results from an increase in principal or capital gains, which are taxed at lower rate than
other incomes in most of the countries.
Other Advantages:
It appeals most to the speculators. Their prices in security market are more fluctuating.
1.4.4 Disadvantages of Equity Shares
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• Uncertain and Irregular Income:
The dividend on equity shares is subject to availability of profits and intention of the Board
of Directors and hence the income is quite irregular and uncertain. They may get no
dividend even three are sufficient profits.
Capital loss During Depression Period:
During recession or depression periods, the profits of the company come down and
consequently the rate of dividend also comes down. Due to low rate of dividend and certain
other factors the market value of equity shares goes down resulting in a capital loss to the
investors.
Loss on Liquidation:
In case, the company goes into liquidation, equity shareholders are the worst suffers. They
are paid in the last only if any surplus is available after every other claim including the
claim of preference shareholders is settled. It is evident from the advantages and
disadvantages of equity share capital discussed above that the issue of equity share capital
is a must for a company, yet it should not solely depend on it. In order to make its capital
structure flexible, it should raise funds from other sources also.
Dividend at the board’s mercy:
The rate of dividend is recommended by the board. The shareholders in the AGM cannot
declare a higher rate than what is recommended by the board.
Illiquid:
Since equity shares are not refundable they are treated as illiquid.
Speculation:
Higher dividends during prosperous periods and low dividend during depression period
shall lead to ample speculation.
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1.5 COMPARISON BETWEEN ON RETURN ON MUTUAL FUND AND

EQUITY SHARES.
Here we see comparison between on return given by the top 5 mutual fund and equity shares in
the last 5 financial year.
MUTUAL FUNDS EQUITY SHARES

• ICICI PRU FOCUSED EQUITY • RELIANCE
FUND
• TATA EQUITY P/E FUND • SBI
• ADITYA BIRLA SUN LIFE SMALL • BHARTI AIRTEL
AND MIDCAP FUND
• SBI NIFTY INDEX FUND • MARUTI SUZUKI
• AXIS LIQUID FUND • HDFC BANK
MUTUAL FUND
• ICICI PRU FOCUSED EQUITY SHARES:
The fund category is equity and type is growth. The risk category is moderately high. The
fund manager is Mittul Kalawadia. The AUM in Rs.1,086.58 crores. The AMC is known
as ICICI Prudential Mutual Fund. The minimum investment is required Rs. 5000.
Rate of Return
YEAR 2016-17 2017-18 2018-19 2019-20 2020-21

RETURN 22.95% 5.95% 8.89% -26.01% 79.49%
RETURN 22.95% 30.20% 41.8% 5.64% 83.92%
(YOY)
• TATA EQUITY PE FUND:
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Fund category is equity and type is growth. The risk category moderately high. The fund
manager is Sonam Udasi. The AUM in RS.4553.04 crores. The AMC is known as Tata
Mutual Fund. the minimum Investment is required Rs. 5000.
Rate of Return
YEAR 2016-17 2017-18 2018-19 2019-20 2020-21

RETURN 43.5% 14.53% 0.76% -27.6% 72.43%
RETURN 43.5% 64.34% 65.6% 20.25% 100.99%
(YOY)
• ADITYA BIRLA SUN LIFE SMALL AND MIDCAP FUND :
Fund Category is equity and the type is growth. The risk Category is unavailable. The fund
manager is Kunal Sangoi. The AUM in Rs. 2541.61 crores. The AMC is known as Aditya
birla sun life Mutual fund the minimum investment is required is RS.1000.
Rate of Return
YEAR 2016-17 2017-18 2018-19 2019-20 2020-21

RETURN 43.71% 15.2% -10.86% -43.61% 112.27%
RETURN 43.71% 65.54% 47.57% -16.35% 75.68%
(YOY)
• SBI NIFTY INDEX FUND:
The fund category is Equity and type is growth. The risk category is moderately high. the
fund manager is Raviprakash Sharma. The AUM in Rs.924.47 crores. The AMC is known
as SBI Mutual Fund. The minimum investment is required Rs. 5,000.
Rate of Return
YEAR 2016-17 2017-18 2018-19 2019-2020 2020-21

RETURN 20% 11.22% 15.98% -26.02% 79.03%
26
RETURN 20% 33.47% 54.80% 14.96% 97.58%

(YOY)
• AXIS LIQUID FUND:
The fund category is liquid funds and type is growth. The risk category moderately low.
The fund manager is Devang Shah. The AUM in Rs. 24,975.49 crores. The AMC is known
as Axis Mutual Fund. The Minimum Investment is required Rs.500.
Rate of Return
YEAR 2016-17 2017-18 2018-19 2019-20 2020-21
RETURN 7.26% 6.8% 7.49% 6.23% 3.57%

RETURN 7.26% 14.58% 23.19% 30.89% 35.58%
(YOY)
EQUITY SHARES
• RELIANCE
Reliance Industries LTD is in the Refineries sector, having a market capitalization of rs.
1443,040.49 crores. It has reported a consolidated sales of Rs. 117,860 crores and a net
profit of Rs. 13,101 crores for the quarter ended december 2020.
27
Rate of Return
YEAR 2016-17 2017-18 2018-19 2019-20 2020-21

RETURN 7.18% 69.93% 21.51% 34.55% 30.78%
RETURN 7.18% 82.42% 122.07% 199.87% 293.20%
(YOY)
• SBI (State Bank of India)
State Bank of India is in the Banks sector, having a market capitalization of Rs. 345,828.70
crores. It has reported a consolidated sale of Rs. 70,099.79 crores and a net profit of RS.
6,257.55 crores for the quarter ended December 2020.
Rate of Return
28
YEAR 2016-17 2017-18 2018-19 2019-20 2020-21

RETURN 11.2% 22.75% -4.73% 12.18% -17.85%
RETURN 11.2% 37.73% 31.51% 48.33% 22.2%
(YOY)
• BHARTI AIRTEL
Bharti Airtel Ltd is in the Telecomm-Service sector, having a market capitalization of RS.
284,589.15 crores.it has reported a consolidated sale of Rs. 26517.80 crores and net profit
of RS. 853.60 crores for the quarter ended December 2020
Rate of Return
YEAR 2016-17 2017-18 2018-19 2019-20 2020-21

RETURN -10.08% 74.74% -41.14% 44.26% 11.76%
RETURN -10.08% 55.80% -8.07% 34.07% 49.93%
(YOY)
• MARUTI SUZUKI
Maruti Suzuki India Ltd is in the Automobile sector, having a market capitalization of RS.
220,560.69 crores. It has reported a consolidated sale of Rs. 22,241.10 crores and a net
profit of Rs. 1996.70 crores for the quarter ended December 2020.
29
Rate of Return
YEAR 2016-17 2017-18 2018-19 2019-20 2020-21

RETURN 15.11% 82.88% -23.42% -1.08% 3.69%
RETURN 15.11% 110.55% 61.55% 59.45% 65.53%
(YOY)
• HDFC BANK
HDFC Bank Ltd is in the Banks sector, having a market capitalization of Rs. 861,148.15
crores. It has reported a consolidated sales of Rs. 31,851.60 crores and a net profit of Rs.
8,769.33 crores for the quarter ended December 2020.
Rate of Return
30
YEAR 2016-17 2017-18 2018-19 2019-20 2020-21

RETURN 11.43% 54.81% 13.29% 19.57% 12.55%
RETURN 11.43% 72.98% 96.01% 135.05% 165.39%
(YOY)
By comparison, both the Mutual Funds and Equity Shares, the equity shares give more
return instead of mutual funds but the risk is also high compare to the mutual funds.
31
CHAPTER NO 2: -RESEARCH AND METHODOLOGY

To Study the Investor perception towards Mutual Fund and Equity the primary and
secondary data has been collected. The structured questionnaire was prepared to collect the
primary data from the investors. During the survey the questionnaire was handed over to
respondents and they were asked to return the filled questionnaire after completion. The
secondary data were collected from the internet, books, record, magazines as well as
newspapers. An aggregate of 83 respondents responded to the questionnaire in Mumbai
City.
• AIM:
This study aims at creating awareness in the minds of investor in terms of risk, return,
liquidity & marketability of their investment. Also focuses on which would be the better
investment for an individual investor. such as mutual fund or equity shares.
• STATEMENT OF PROBLEM:
Today, mutual funds are one of the favorable investment methods available to investors.
The statement in question mainly identifies higher performing mutual fund in three
different categories, and consider the various other parameters such as returns, NAV, risk
analysis and individual investor perception of investing in mutual funds to do.
• NEED OF STUDY:
The need of the study arises because the investors are confused to take right decision on
investment. Since investments are risky in nature, investors have to consider various factors
before investing in their preferred avenues. The investor need suggestion regarding where
the investments are to be made and maximum revenue can be generated. Therefore
researcher felt to undertake study on this topic.
• OBJECTIVES OF THE STUDY:

a. To Study investors perception towards mutual fund and Equity.
b. To compare equity and mutual fund schemes in respect of their return.
32
c. Provide information about pros and cons of investing in Equity and Mutual Funds.
d. Finding the performance by taking the quarterly average of 5 years.
e. To provide feasible solutions on the basis of the findings of the study
• SCOPE OF STUDY:
The present study is an attempt to know the investors perception regarding equities and
mutual funds with the available avenues to the investor. Research has been carried with the
help of primary and secondary data. The study is restricted to Mumbai city and analysis
was done based on the responses given by the investors.
• TYPES OF DATA:
The data is collected from the following process-
a. PRIMARY DATA:
Primary data is the first hand data which is collected from the number of respondents. Here
structured questionnaire was used to collect primary data through surveys.
b. SECONDARY DATA:
Secondary data has been collected for other useful resources and information essentially
required in order to successfully complete the project report and company figures from
internet, books, magazines as well as newspaper
• SAMPLE SIZE:
Sample Size:- 83 consumer has been selected as a sample size for research
• SAMPLE METHOD:
Random Sampling is used for research project.
• DATA REPRESENTATION TECHNIQUE AND TOOLS:
Charts and amp, pie chart has used for the representation.
33
• DATA COLLECTION METHOD:

a. Survey method
b. Survey Instrument – Questionnaire
c. Method of Survey- Through the personel Interaction with the help of questionnaire.
• LIMITATION OF STUDY:
a. The limited information in the secondary survey report is a fundamental obstacle
in finding out the true consequences of investing in mutual funds and equities by
investors.
b. The study is just limited to a period of 12 weeks.
34
CHAPTER NO 3: -REVIEW OF LITERATURE

Singh, B. K. and Jha, A.K. (2009) conducted a study on awareness & acceptability of mutual
funds and found that investors prefer mutual fund due to return potential, liquidity and safety and
they were not totally aware about the systematic investment plan. The invertors’ will also consider
various factors before investing in mutual fund.
Ramamurthy and Reddy (2005) conducted a study to analyze recent trends in the mutual fund
industry and draw a conclusion that the main benefits for small investors’ due to efficient
management, diversification of investment, easy administration, liquidity, transparency, flexibility,
affordability, wide range of choices and a proper regulation governed by SEBI. The study also
analyzed about recent trends in mutual fund industry like various exit and entry policies of mutual
fund companies, various schemes related to real estate, commodity, entering of banking sector in
mutual fund, buying and selling of mutual funds through online.
Anand and Murugaiah (2004) had studied various strategic issues related to the marketing of
financial services. They found that recently this type of industry requires new strategies to survive
and for operation. For surviving they have to adopt new marketing tactics that enable them to
capture maximum opportunities with the minimum risks in order to enable them to survive and
meet the competition from various market players globally.
Mr. Vijay Anand (2000) :-The study focused on to understand the position of the schemes of
Birla Sunlife and the competitors schemes available in the market-The study did Analysis of
Performance of Equity fund for 3 years and SWOT Analysis of Birla Sunlife by literature
survey .delphi technique in depth financial review: to identify among the selected equity funds that
earns higher returns than benchmark; and competitors and concluded that Birla Sunlife performs
well compared to the benchmarks and competitors.
Kumar (Ms Nidhi Walia and Dr (Ms) Ravi 2010) I am overburdened by the responsibility of
giving investors the best return while effectively using their abilities to properly allocate the timing.
Mutual fund portfolio management is a truly dynamic decision-making process that monitors the
ongoing assessment and demand of efficient fund managers.
Sanjay kumar Mishra and Manoj kumar (2011) The study here is how mutual fund investors
objectively influence their knowledge about information retrieval and processing behavior. In this
35
article they are objective knowledge i, e, what is actually stored in memory, subjective knowledge,
ie how individuals affect different things how information retrieval and processing information
behavior I tried to prove what to do.
Deepak Agarwal (2011) is conducting test on the performance measurement of mutual fund
created in 1992 by the development of capital markets and economic regulation in India. Here,
mutual funds are a major contributor to the globalization of financial markets. It flows to the
economy. The survey revealed that performance is influenced by people's savings and investment
habits and grows at a level with the loyalty and confidence of the manager.
Zhi Da, Penggge Goa and Ravi Jagannathan (2011) describe in this paper the impatient trading
rules for liquidity and mutual fund selection, as well as the trading and liquidity options of mutual
funds whose stock selection skills have not expired. Count other elements including prescriptions.
Studies have shown that past performance predicts that the future performance of stock market
trading funds will be better.
Dr Sandeep Bansal, Dr. Deepak Garg and Dr. Sanjeev K Saini (2012) investigated the impact
of Sharpe and Treynor ratios on selected mutual fund schemes. This study is a single market index
model approach in which the actual mutual fund risk profile compares monthly or yearly liquidity,
systematic and non-systematic risks, and provides a complete fund analysis using different models
Indicates that you can compare correctly.
Dr. K. Veeraiah and Dr. A. Kishore Kumar (2014) conducted a comparative performance
analysis of selected India Mutual Fund schemes. This is a study comparing performance and
performance of mutual funds owned by India. According to the survey results, investment 17 trusts
are making naive investments. Mutual funds have medium- and long-term investment options and
prefer the appropriate investment options by investors.
Professor V. Vanaja and Dr. R. R. R. Karrupasamy (2014) The research of mutual funds is
considered to be one of the best investments available to investors compared to other investors.
Mutual funds, and investors, can also buy stocks and bonds at much lower costs. This study shows
that the majority of the public selected for external research have implemented a variety of plans
based on Sharp, Trenol, and Jensen's performance measures.
36
Dr. Ashok Khurana and Kavitha Panjwani (2010) it's research on mutual funds is a mechanism
to issue resources to investors and integrate resources by investing funds in securities according to
the purpose. Investors need to know how high the risk to an individual asset is, and how much
their contribution to the total risk of the portfolio. All these can be found using specific keys in the
statistics with the help of these keys, which allows investors to analyze various mutual funds.
Vibha lamba (2014) is conducting analysis of portfolio management in India. The purpose of this
survey is to analyze the scope and importance of portfolio management in India. This should also
focus on the types and steps of portfolio management that provide the client with the greatest return
and least risk for investment by the portfolio manager.
Megha Pandey (2014) is conducting comparative studies of the performance of mutual funds and
index funds actively managed in India. Active management funds always overlap with passive
management funds or indexes. In this study, funds deal with a comparative analysis between
the0performance of both actively and passively managed funds. The T-test has been applied to this
study and has been shown to generate more revenue through actively managed funds.
Grinblatt and Titman (1989) have evaluated that portfolio performance has attracted a great deal
of interest in mutual funds in the academic world. A variety of valuation techniques have been
proposed to implement the ability of a professional portfolio manager to generate anomalous
returns. In this survey they found negative performance or no performance for the average mutual
fund.
Sharad Panwar and Dr. R.Madhumati (2005) the objective of the study is to identify differences
in characteristics of public sector sponsored private sector sponsored mutual funds and to find the
extent of diversification in the portfolio of securities of public sector sponsored and private sector
sponsored mutual funds and to compare the performance of public sector sponsored and private
sector sponsored mutual funds using traditional investment measures- The study found that public
sector sponsored private sector Indian sponsored and private sector foreign sponsored mutual
funds do not differ statistical in terms of portfolio characteristics such as net assets common stock
market capitalization holdings Top Ten - Portfolio risk ; characteristics measured through private
sector Indian sponsored mutual funds seems to have outperformed both Public sector sponsored
and Private sector foreign sponsored mutual funds.
37
Dr. S. Anand and Dr. V Murugaiah (2003) The purpose of this study is to apply the measurement
tools of modern portfolio theory to the performance of mutual funds- The study aims to examine
the degree of correlation that exists between fund and market return to understand the impact of
fund specific characteristics on performance to evaluate the diversification and selectivity skills of
fund managers- The study concluded on the basis of overall analysis in can be inferred here that
the additional return on sampled schemes and the market over risk; free return :as significantly lo:
during the study period- The study covers the period between April 1999 and March 2003 This
indicates that the majority of schemes were showed underperformance in comparison with risk
free return.
38
CHAPTER NO 4: -DATA ANALYSIS INTERPRETATION AND

PRESENTATION
1.
Interpretation:
After the survey was conducted, we found that maximum no. of people who had their investment
in mutual funds or equity shares and others, were males followed by females. Out of 83 there were
86.5% of men and 14.5% were females.
39
2.
Interpretation:
After the survey was conducted the majority of people belongs to 18 to30 age group it accounts
72.3% alone. Followed by the age group of 31 to 50 which accounts of 16.9%.rest of the data
accounts to 50 or above.
40
3.
Interpretation:
After the survey was conducted the majority of people who invest in mutual funds or equity shares
or other has income upto to Rs. 2,50,000 is 62.7%. There are 24.1% has income between the
Rs.2,50,000 to Rs.5,00,000. The rest is Rs.5,00,000 or above.
41
4.
Interpretation:
After the survey was conducted, it can be interpretated that there are more salaried person who
invest in mutual fund, equities or other such as 63.9%. Where 34.9% are businessman who invest
their capital. The rest are the professional.
42
5.
Interpretation:
After the conducting the survey it can be interpreted that most respondents are investing in mutual
funds. That 55.4%. This still indicates that mutual fund products are to be used by a large pool of
investor.
43
6.
Interpretation:
As per the above chart it can be interpreted the most respondents are not investing in equity shares.
That is 56.6%. This still indicates that equity shares are not to be used by more investors.
44
7.
Interpretation:
As per above the chart, it can be interpreted the most respondent is able to willing to take the risk
while they are investing. There are 50.6% respondent are risk taker whereas the rest are the Risk
Averse Investor and Risk Neutral.
45
8.
Interpretation:
As per above the chart, it can be interpreted the respondent are in majority to choose the long-term
investment plan while they are investing. that is 62.7%. whereas there are 37.3% are preferred the
short-term plan while they are investing.
46
9.
Interpretation:
As per the above chart, it can be interpreted that respondent are 36.1% are in Favour of up to 1
year investment plan. whereas there are 34.9% are in favor of investing duration between 1year to
5 years and the rest 28.9% are preferred the investment duration more than 5 years.
47
10.
Interpretation:
As per above the chart, it can be interpreted the respondent in majority in Favour of Mutual Funds
is better than equity shares or other. That is 51.8%. Whereas the 26.5% are in Favour equity shares
is better than the Mutual Funds. while the rest 21.7% in Favour of others such as Real State, Gold
& Silver, Fixed Deposits Etc.
48
11.
Interpretation:
After the survey was conducted, as show the above graph, the more respondent are in majority
investing in Mutual fund for Good Return that is 33.7%. The 20.5% respondents are ignoring this
question while they are not investing in Mutual Funds. 16.9% respondents are invested in Mutual
Fund for Safety Reason. The 14.5% respondent are invested in Mutual Fund for Risk
Diversification and the rest is invested for Capital Appreciation.
49
12.
Interpretation:
As per the above chart, it can be interpreted the respondents in majority 39.8% ignore this question
while they are invested in Mutual Funds. The 37.3% are not invested in mutual fund for the reason
of not control over the cost. There are 16.9% are not invested in mutual fund for the reason of low
return and the rest 6% are not invested because of not made own portfolio.
50
13.
Interpretation:
After the survey was conducted there are 77 respondents are answer this question. 36.4% are ignore
this question because of they are not invested in Equity Shares. 35.1% are invested in Equity Shares
because of High Return. The 18.2% respondent are invested in Equity Shares because they can
control and management their investment. The rest is invested for Tax Benefits.
51
14.
Interpretation:
As per the above the chart shows, it can be interpreted that there are 34.9% respondent is not
invested in Equity Shares because of High Risk. There are 27.7% are not invested in Equity Shares
because lack of knowledge such as Fundamental and Technical Analysis. There are 20.5%
respondent not invested in Equity Shares because of Loss on liquidation and the rest 16.9% ignore
this question because of they invested in Equity Shares.
52
15.
Interpretation:
As per above the chart, it can be interpretated there are majority of respondent are preferred the
open-ended schemes, that is 55.4%. There are 36.1% are preferred the close-ended schemes. The
rest 8.4% preferred the interval schemes.
53
16.
Interpretation:
As per above the chart, it can be interpreted that there is equally respondent think that Equity
Shares is riskier than Mutual funds and there 13.3% who had selected the maybe option where
equity is riskier than the mutual funds?
54
17.
Interpretation:
As per above the chart, it shows the more respondent in Favour of maybe whether they think get
high return in equity shares or not that is 50.6%. whereas there are 38.6% respondents who thinks
they get high returns in equity shares instead mutual funds. The rest 10.8% in favor of not getting
high return in equity shares instead mutual funds.
55
18.
Interpretation:
After the survey was conducted, they have rated their 55.4% as 5 stars, followed by 37.3% as 4
star and the rest are equally rated 3.6% as 2 or 3 stars.
56
CHAPTER NO 5: - SUGGESTION & CONCLUSION

5.1 SUGGESTION
• Direct Investing in Equity Shares is the best way to learn about Stock Marke and economy
of a nation.
• If you really enjoy in managing the portfolio, should choose direct investing.
• If you don’t know anything about stock market, just getting an income is your concern,
you should choose a mutual fund scheme.
• Make a good study before choosing an investment option.
• Be aware that investing in any securities whether direct investing or mutual fund investing,
involves a certain risk. Analysis the risk with the financial backups and then choose an
investment option.
• Financial goals depend on a variety of factors, including the age of the investor, lifestyle,
financial independence, family dedication, and income and spending levels. Therefore, it
is necessary for investment trust companies to assess the needs of consumers. They have
the purpose of investment, such as regular income, home purchase, children's wedding or
education funding, or a combination of all these needs, the amount of risk, and willingness
to accept, and cash flow requirements define your needs.
• Investors should choose the right mutual fund system that suits their needs. Investors
should fully read the offering documents of the mutual fund plan. Several factors that need
to be evaluated before selecting a particular mutual fund are the performance records of
the fund over the past few years, with appropriate standards and similar funds in the same
category. Other factors include portfolio allocation, dividend yield and transparency, which
are reflected in the frequency and quality of communications.
• For investors, the best way is to invest a fixed amount at a specific time interval. By
investing a fixed amount each month, you can reduce the number of purchases at higher
prices and increase the number of purchases at lower prices, thereby reducing the average
cost per vehicle. This is called the rupee cost average.
• Holding a seminar and presentations or Investors meet in the stock broking firm help the
investors to remove any misconception regarding the Mutual Fund and this will create
awareness of Mutual fund.
57
• Agents are the main person who influences the investment decision. company can hire
fresh graduates train them and sponsor for the AMFI exam just life insurance companies
who conduct IRDA training. This will increase the feet on street for the mutual fund
companies.
• Company has to provide timely services to its customers so that it can compete with its
competitors like Franklin Templeton and HDFC.
58
5.2 CONCLUSION
• For a start-up investor mutual fund investment method is more favorable and affordable,
as risk is low compared to direct investing.
• For an investor with lessor money, he/she should go for mutual fund investing as NAV is
lower than the price of a stock.
• If an investor wants to make profits out of speculation, then he should choose direct
investing in equity shares.
• Investing in direct equities makes an investor to study more about the company, the
financial market, and the economy.
• People need a systematic way of investing should go for mutual fund investing.
• Investing with a fixed income strategy, should choose mutual fund as an investment choice.
• Short term as well as medium term investors should choose direct equity investing as an
investment choice.
• Mutual fund investing is termed as a long-term horizon of getting a good return, as the fund
is going in a systematic way.
• If an investor has got time in making a market study and managing his/her portfolio, should
invest in equity shares directly, otherwise go for mutual fund investing.
• If an investor like in buying and selling stocks, managing the stocks in his portfolio should
choose direct investing in equity stocks.
• Mutual funds are the better option for the investors that the awareness of investors in
Mumbai region of Maharashtra State is moderate as for as various mutual fund schemes
are concerned.
• If Mutual fund agencies and stock marketers take initiatives to conduct more seminars,
workshops then the investor come forward to invest in various mutual fund schemes and
equities. The number of advisors should be increased in order to create awareness about
their stock brokering services to attract new investors. Investors have the perspicacity that
risk in equity is higher than mutual funds. So, the company should provide the detailed
information by proving market updating.
• I order to study the concept of mutual fund be should note that a mutual fund is a Trust that
pools the money of several investors and manages investments on behalf. The Fund collects
59
this money from investors through various schemes. Each schemes is differentiated by its
objectives of investments or in other words a broadly Defined Purpose of how the collected
money is going to be involved.
60
WEBLIOGRAPHY
• https://www.investopedia.com/mutual-funds-4427787
• https://www.moneycontrol.com/stocksmarketsindia/
• https://www.sharekhan.com/mutual-funds/overview
• https://economictimes.indiatimes.com/reliance-industries-ltd/yearly/companyid-13215.cms
• www.edelweiss.com
• https://en.wikipedia.org/wiki/Investment_fund
• www.investing.com
• www.accountingtool.com
61
ANNEXURE QUESTIONNAIRE
i. NAME
ii. Gender
o Male
o Female
iii. Which age group?

o Between 18 to 30
o Between 30 to 50
o Between 50 or above
iv. Which income group do you belong?

o Upto Rs 2,50,000
o 2,50,000 to 5,00,000
o Above 5,00,000
v. Occupation
o Salaried
o Business
o Profession
vi. Do you invest in Mutual Fund?

o Yes
o No
vii. Do you invest in Equity Shares?

o Yes
o No
viii. Risk preference

o Risk Taker
o Risk Neutral
o Risk Averse
ix. Which term you prefer for investment.

o Long term
o Short term
x. What is duration of your investment.

o Upto 1 year
o 1 to 5 years
62
o More than 5 years
xi. According to you, which is good for investment?

o Mutual Funds
o Direct Equity Shares
o Other
xii. Why are you investing in Mutual Fund?

o Tax benefit
o Risk diversification
o Capital appreciation
o Good return
o Safety
o None above (if not invested)
xiii. Reason on not investing in Mutual Fund?

o Low return
o Not control over cost
o Made your own portfolio
o Ignore (if you invested)
xiv. Why are you investing in Equity Shares?

o High return
o Control and managed investment
o Tax benefit
o Ignore (if not invested)
xv. Reason on not investing in Equity Shares?

o Loss on liquidation
o Lack of knowledge (fundamental or technical analysis)
o High risk
o Ignore (if you invested)
xvi. Which scheme you prefer in Mutual Fund?

o Open-ended schemes
o Close-ended schemes
o Interval schemes
xvii. Investing in Equity Shares is riskier than the Mutual Fund?

o Yes
o No
63
o Maybe
xviii. Investing in Equity Shares gives high return instead of Mutual Fund?
o Yes
o No
o Maybe
xix. Rate this Survey?

o 1
o 2
o 3
o 4
o 5
64

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PRAHLADRAI DALMIA LIONS COLLEGE OF COMMERCE AND ECONOMICS

1.2 Introduction To Financial System

Let us study the concept of mutual fund and equity

1.3 Concept of Mutual Fund

1.3.1 Meaning of Mutual fund

1.3.2 Industry Profile of Mutual Fund

Indian mutual fund companies follow a three-tier system as demonstrated below.

1.3.3 NAV (Net Asset Value)

1.3.4 Schemes of Mutual Funds

According to the maturity plan:

1.3.5 Mutual Fund scheme by investment purpose

• Equity fund/Growth fund

• Money market fund

1.3.6 Advantages of Mutual Funds:

• Reduction of Transaction Costs:

• Convenience And Flexibility:

1.3.7 Disadvantages of Mutual Funds:

No Control Over Costs:

Managing A Portfolio of Funds:

The Wisdom of Professional Management:

1.4 The Equity Shares

From an accounting perspective, equity capital is considered to be all components of the

1.4.1 MARKET CAPITALIZATION: THE REAL VALUATION

MARKET CAPITALIZATION = TOTAL NO. OF OUTSTANDING SHARES * PRICE OF

Let’s calculate the actual market cap now

Company A: 5,00,000*100= Rs.5 crore

Company B: 1,00,000*200= Rs.2 crore

DIFFERENT MARKET CAPITALIZATION ARRAYS IN STOCK

1.4.2 The Different Types Of Stock Classifications

Penny stocks usually trade over-the-counter (OTC) on the pink sheets.

The common features of blue-chip stocks include:

• Long history of stable dividend payments to shareholders

1.4.3 Advantages of Equity Shares

Right to participate in the Control and Management:

An Attraction of Persons having Limited Income:

1.4.4 Disadvantages of Equity Shares

• Uncertain and Irregular Income:

Capital loss During Depression Period:

Dividend at the board’s mercy:

1.5 COMPARISON BETWEEN ON RETURN ON MUTUAL FUND AND

MUTUAL FUNDS EQUITY SHARES

• ICICI PRU FOCUSED EQUITY SHARES:

YEAR 2016-17 2017-18 2018-19 2019-20 2020-21

• TATA EQUITY PE FUND:

YEAR 2016-17 2017-18 2018-19 2019-20 2020-21

• ADITYA BIRLA SUN LIFE SMALL AND MIDCAP FUND :

YEAR 2016-17 2017-18 2018-19 2019-20 2020-21

• SBI NIFTY INDEX FUND:

YEAR 2016-17 2017-18 2018-19 2019-2020 2020-21

RETURN 20% 33.47% 54.80% 14.96% 97.58%

• AXIS LIQUID FUND:

YEAR 2016-17 2017-18 2018-19 2019-20 2020-21

RETURN 7.26% 6.8% 7.49% 6.23% 3.57%

YEAR 2016-17 2017-18 2018-19 2019-20 2020-21

YEAR 2016-17 2017-18 2018-19 2019-20 2020-21

YEAR 2016-17 2017-18 2018-19 2019-20 2020-21

YEAR 2016-17 2017-18 2018-19 2019-20 2020-21

YEAR 2016-17 2017-18 2018-19 2019-20 2020-21

CHAPTER NO 2: -RESEARCH AND METHODOLOGY

• OBJECTIVES OF THE STUDY:

The data is collected from the following process-

Random Sampling is used for research project.