Yashwantrao Chavan Maharashtra Open University Nashik

School of Commerce & Management

Yashwantrao Chavan Maharashtra Open University MBA – General (P79)
Dnyangangotri, Near Gangapur Dam, Nashik 422222
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Name of the Student: ABHIJEET DATTATRAY REDIJ

Contact No. : 9970456793 Email id: abhiredij123@gmail.com

Study centre Name & Code: CHANAKYA MANDAL Study centre Code: 62209

Title of the Project: Comparison between Investment in Equity and Mutual Fund

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 Yashwa Yashwantrao Chavan Maharashtra Open University Nashik
School of Commerce & Management
Yashwantrao Chavan Maharashtra Open University MBA – General
Dnyangangotri, Near Gangapur Dam, Nashik 422222
IMP: TAKE BACK TO BACK PRINT OF PROFORMA FOR APPROVAL OF PROJECT PROPOSAL [P79 PRJ]
(USE CAPITAL LETTERS ONLY)
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P.R.No. 2 0 1 8 0 1 7 0 0 0 4 6 6 4 0 1

1) Name and Address of the Student: ABHIJEET DATTATRAY REDIJ

FLAT NO.B-305, CERATEC GREENS, JADHAV NAGAR II, KATRAJ, PUNE.

Pin code: 411046 Contact No. : 9970456793

Email id: abhiredij123@gmail.com

(3) Subject Area: Finance

(4) Name and Address
of the Supervisor

Email: Contact No. :

(5) Is the Supervisor an Academic Yes: No:
Counsellor of the Management
Programme of YCMOU
(6) If Yes, Name of Study Centre and the courses / he / she is counselling for and since when:

Signature of Student Signature of Supervisor

Date: / /20 Date: / /20
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 A synopsis on: " Comparison between Investment In Equity and Mutual Fund"

A Synopsis on
"Comparison between Investment In Equity and Mutual Fund"

Submitted to
School Of Commerce And Management
Yashwantrao Chavan Maharashtra Open University,
Nashik.

As partial fulfillment for the award of

Master of Business Administration (MBA)

By: ABHIJEET DATTATRAY REDIJ

PRN: 2018017000466401

Under the Guidance of

Mr. Ketan Sande

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 A synopsis on: " Comparison between Investment In Equity and Mutual Fund"

Sr. no Table of Contents Page no.

1 Introduction................................................................... 3
2 Importance and Significance....................................... 4
3 Objectives of the Study................................................. 5
4 Hypothesis..................................................................... 6
5 Research Methodology................................................. 6

A) Primary Data

B) Secondary Data

C) Sampling and sample size

6 Expected Contribution................................................. 7

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 A synopsis on: " Comparison between Investment In Equity and Mutual Fund"

1. INTRODUCTION:

EQUITY:
An equity investment is money that is invested in a company by purchasing shares of that company in
the stock market. These shares are typically traded on a stock exchange
These are shares of company and can be traded in secondary market. Investors get benefit by change
in price of share or dividend given by companies. Equity shares represent ownership capital. As an
equity shareholder, a person has an ownership stake in the company. This essentially means that the
person has a residual interest in income and wealth of the company. These can be classified into
following broad categories as per stock market:
These can be classified into following broad categories as per stock market:
 Blue Chip Shares: - Shares of large, well established, financially strong companies with an
impressive record of earnings and dividends.
 Growth Shares: - Shares of companies that have fairly entrenched positions in a growing market
and which enjoy an above average rate of growth as well as profitability.
 Income Shares: - Share of companies that have fairly stable operations, relative limited growth
opportunities, and high dividend payout ratios.
 Cyclic Shares: - Share of companies that have a pronounced cyclicality in their operations.
 Defensive Shares: - Shares of companies that are relatively unaffected by the ups and downs in
general business conditions.
 Speculative Shares: - Shares of companies that tend to fluctuate widely because there is a lot of
speculative trading in them.

MUTUAL FUNDS:
A mutual fund is an investment security that enables investors to pool their money together into one
professionally managed investment. Mutual funds can invest in stocks, bonds, cash or a combination
of those assets. The underlying security types, called holdings, combine to form one mutual fund, also
called a portfolio.
Mutual Funds are essentially investment vehicles where people with similar investment objective
come together to pool their money and then invest accordingly. Each unit of any scheme represents
the proportion of pool owned by the unit holder (investor).
Appreciation or reduction in value of investments is reflected in net asset value (NAV) of the
concerned scheme, which is declared by the fund from time to time. Mutual fund schemes are
managed by respective Asset Management Companies (AMC). Different business groups/ financial
institutions/ banks have sponsored these AMCs, either alone or in collaboration with reputed
international firms. Several international funds like Alliance and Templeton are also operating
independently in India. Many more international Mutual Fund giants are expected to come into Indian
markets in the near future.

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 A synopsis on: " Comparison between Investment In Equity and Mutual Fund"

A mutual fund is the ideal investment vehicle for today's complex and modern financial scenario.
Markets for equity shares, bonds and other fixed income instruments, real estate, derivatives and other
assets have become mature and information driven. Price changes in these assets are driven by global
events occurring in faraway places. A typical individual is unlikely to have the knowledge, skills,
inclination and time to keep track of events, understand their implications and act speedily. An
individual also finds it difficult to keep track of ownership of his assets, investments, brokerage dues
and bank transactions etc.
Investing in Mutual Fund is convenient because of two basic reasons. All investment carry risks,
especially equity investment that bears larger risks, their returns are more volatile and uneven. To cut
down the risk one needs to put money in several instruments rather than in one or two products. A
Mutual Fund can effectively spread its investments across various sectors of the economy and
amongst several products. Risk diversification is the Key. Secondly 'where to invest and where not to',
is a specialized business. One may not have the expertise, time and resources of a well-managed fund

2. IMPORTANCE AND SIGNIFICANCE:

Importance of Equity
 Growth: As the value of your home increases, so does the price, thereby, increasing equity in the
property. Similarly, as your business sales increase, the equity increases as well. Foryour business
and personal lives, the importance of equity is in the growth of your assets, by sales or by
property value. The more equity you have, the less debt to be repaid, hence, the more comfortable
your life will be today and in the future.
 Value: The importance of having your own equity in your business is to attract equity investors
for cash flow. Your repayment to an equity investor is based on the company's growth and profit,
rather than immediate repayment of debt as with a bank loan. According to Ernst & Young, the
value private equity investors create in businesses is seen at the time they exit their investment
showing: a track record of improved profits, growth and cash flow from growth in contracts.
 Opportunities: The growth and equity potential in a company are important in securing an equity
investor. An investor looks for opportunities to build equity in a company for private equity
investments. Projects are limited compared with the higher demand for equity financing, which
makes investors selective about their investment choices. The investor's knowledge of the
business, an existing relationship with the owners, and a management team and business model in
place, are attractive for investment for an equity investor than those at a planning stage.
 Sources: Friends, relatives and investors are sources of equity investments, important in helping
you build equity. An equity investor seeks opportunities to invest in homes or companies with
increasing value which reduces your debt. He may also provide counseling services for the
growth of your business. Friends and relatives are sources of personal loans, which are not

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 A synopsis on: " Comparison between Investment In Equity and Mutual Fund"

expected to be repaid immediately thereby, reducing your personal debt.

 Warning: Building equity for personal or business growth is important to reducing your debt. Be
committed to avoiding debt financing through bank loans as an option available for raising
capital. Debt financing reduces equity by imposing a repayment burden and subjects you to
penalties on payment defaults. Funds raised through equity financing does not entail any
immediate repayment obligation.

Importance of Mutual Funds:

 Convenience: For investors, one of the most prominent benefits that mutual funds provide is
convenience. By investing in a single fund, they can gain access to a broad range of the financial
market. A typical diversified equity fund can spread out the money across tens of stocks with
some portion invested in fixed income securities as well.
 Diversification: Further, if an investor wants to focus on one segment of the market, for
instance, large-cap stocks, funds focused on this segment can spread out the investment across
multiple large-cap stocks in just one transaction of purchasing the fund. If the investor were to try
to do that themselves, it would take a lot of effort, transaction cost, and time to create an
individual large-cap stock portfolio.
 Ease of Investment: Apart from this, mutual funds are easy to buy and sell. One can either
engage the services of a distributor or agent to transact in funds or do it over the internet
themselves. In the case of latter, the transaction amount is debited from or comes directly to the
bank account linked to the mutual fund account depending on whether a fund has been bought or
sold
 Spoilt For Choice: This feat/ure follows from the convenience aspect discussed above.
Investors have several choices when it comes to mutual funds. And given their investment
objectives, funds provide access to a wide range of financial instruments, sectors, and strategies.
 Professional Management: This is one of the factors, which is a key highlight of the
importance of mutual funds. Due to lack of expertise several investors don’t have the confidence
in taking the financial market route to grow their wealth. They feel they have limited or no
capability to invest in stocks and bonds on their own and do not have the time to keep tracking
their investments even if they manage to invest on their own.

3. OBJECTIVE OF THE STUDY

 The objective of the study is to understand the comparison between the investment in Equity
and Mutual Fund.
 The research was conducted to find out about the preference of the target population for
Equity Diversified Mutual Funds and Direct Equity.
 Besides this the research was conducted to know about reasons for preferring mutual funds
and direct equity funds.

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 A synopsis on: " Comparison between Investment In Equity and Mutual Fund"

 The target population mainly included service class people. Hence convenient sampling was
used in deciding on the target population.
 First an exploratory research was conducted to get some insights about the topic. Secondary
data analysis was performed. It was followed by questionnaire filling. Findings of the
exploratory research /were regarded as input to further research.

4. HYPOTHESIS
Mutual Funds are funds that pool the money of several investors to invest in equity or debt markets.
Mutual funds could be equity funds, debt funds or balanced funds.

Fund are selected on quantitative parameters like volatility, FAMA Model, risk adjusted returns, and
rolling return coupled with a qualitative analysis of fund performance and investment styles through
regular interactions / due diligence processes with fund managers.

5. RESEARCH METHODOLOGY
A) PRIMARY DATA
The required data was collected by way of distribution of questionnaires to investor at random and by
way of telephonic interview and online distribution of questionnaires
Tools/Technique of data collection
 Personal Interview
 Close Observation
 Survey Conduction
For the purpose of primary data collection, the target population was administered with a
questionnaire which had both structured as well as unstructured questions.

B) SECOUNDARY DATA
For this research I will collect secondary data from various books, magazines, generals, Internet,
Website, Reports etc. which are generated by other users, processed, published and used for this
purpose.

C) SAMPLE SIZE
For primary data collection, I will collect samples from more than 20 peoples who are regularly
investing in mutual fund and in equity.
The sample size of 100 will be classified as:
 Persons who are investing in Mutual Funds – 50 Persons
 Persons who are investing in Equity – 50 Persons

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 A synopsis on: " Comparison between Investment In Equity and Mutual Fund"

6. EXPECTED CONTRIBUTION
 This research work will surely help to understand more about the difference between investing in
Equity and Mutual Funds.
 Understanding the difference between equity and mutual fund will give a good idea about the
investment planning.
 It will be helpful to find out the views of Investor regarding the services provided to them
 Broking charges regarding the equity and mutual fund should have revised to make them more
competitive