COMPARISON BETWEEN EQUITY AND MUTUAL FUNDS

OBJECTIVE
The objective of this presentation is to make comparison between investment in equity and mutual funds. Reasons for preferring mutual funds and direct equity funds.

Equity shares/Direct investment

Classification as per stock market
Blue chip shares Growth shares Income shares Cyclic shares Defensive shares Speculative shares

Mutual Funds
Types of mutual fund

Open-ended Close ended

Types of scheme Equity/growth oriented Funds Balanced Funds Index Funds Income/debt oriented Funds

Equity funds
Types
Index Funds Diversified Funds Tax-saving Funds Sector Funds

RESEARCH METHODOLOGY
Research Design Exploratory Source of data - Primary & Secondary Sample size-30 Target population-service class people

Data Interpretation & Analysis

ANALYSIS OF MUTUAL FUND Mutual Funds Return Market Return Performance(in comparison to market)

SBI Magnum global fund UTI Equity Fund Reliance Growth Fund Birla Frontline Equity Average return

7.18% (1.23)% (5.90)% (7.75)% (1.925)%

(9.04)% (9.04)% (9.04)% (9.04)% (9.04)%

Above Above Above Above Above

ANALYSIS OF EQUITY EQUITY Return Market Return Performance (in comparison to market)

HCL SBI Reliance Bharti Airtel Average return

33.05% (22.96)% (27.70)% (5.23)% (5.71)%

(9.04)% (9.04)% (9.04)% (9.04)% (9.04)

Above Below Below Above Above

INVESTOR SURVEY ANALYSIS

1. Investment alternatives you are aware of:

2. Mutual Funds are being considered an attractive investment opportunity by the investors. However, awareness about

Respondents are mostly aware of equity followed by bonds and mutual funds.

2. Factors considered while investing :

Most of the respondent consider risk and return as an important parameter while investing. While only 23% and 7% consider liquidity and Tax saving respectively, as an important factor for investment. Risk here includes both risk relating safety of principal and stability of return.

3. Where have you invested the most?

Most people prefer to invest in bonds, including government securities, and mutual funds due to less risk factor associated with these investments.

4: Past returns as a good measure of performance :

The graph suggests that a majority of the investors consider returns as a good measure of performance evaluation. However there are investors who do not rely wholly on past return as they consider many more things viz current market rate of return, competitors performance, etc

5. Approach in making Investment

Out of 30 people surveyed, approximately 43% of investors rely totally on investment advisors, while 23% prefers to take friendly advice and rest (34%) prefers the past performance of funds

6. Where you would like to invest?

a comparative analysis between Direct Equity and Equity linked Mutual funds

7. Reason for investment in Mutual funds

Major reason for preferring Equity diversified Mutual Funds was Professional management of funds and low risk associate with mutual funds.Only few respondent considers diversification and liquidity as a reason for investment in mutual fund.

8. Reason for investment in direct Equity

it is indicated that a majority of the individuals prefers direct investment in equity because of the higher returns (capital appreciation) associated with it

9. Are you satisfied with your investment choice (Equity or Mutual Fund)

Out of 8 respondents who have invested mostly in mutual funds, 6 people are satisfied with Mutual funds, while rest 2 people are not satisfied. The main reason of their dissatisfaction was that they were not able to gain maximum when market is bullish.

10. Sources of information for mutual funds and Equity.

The graph indicates that the most popular source of information are the investors advisor or investment agents that the investors rely on for their investments

Conclusion
Investors are mostly aware of equity Respondents prefer to invest in mutual funds mainly because funds are professionally managed People invest in equity primarily because of capital appreciation.