A comparative study on investing in equity and mutual fund schemes


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A comparative study on investing in equity and mutual fund schemes

  1. 1. A comparative study on investing in equity and mutual fund schemes Introduction In the current economic scenario interest rates are falling and fluctuation in the share market has put investors in confusion. One finds it difficult to take decision on investment. This is primarily, because of investments are risky in nature and investors have to consider various factors before investing in investment avenues. These factors include risk, return, volatility of shares and liquidity. The main objective of comparing investment in equity shares with mutual fund schemes is to analyze the performance of mutual funds with their benchmark parameter. Historical data were taken for calculating risk, return, alpha and beta. To compare how equities & mutual funds are less risky on the basis of returns. Those who have well knowledge in equity market they can go for equity investment rather that investing in mutual funds because no control on the expenses made by the fund manager. The study will guide the new investor who wants to invest in equity and mutual fund schemes by providing
  2. 2. knowledge about how to measure the risk and return of particular scrip or mutual fund scheme. Hence this study has a scope to conduct research on mutual fund & equity investment.
  3. 3. AIM This study aims at creating awareness in the minds of investor interms of risk, return, liquidity & marketability of their investments. Also focuses on which would be the better investment for an individual investor. OBJECTIVES • To compare Equity and Mutual Fund Schemes in respect of their risk & return. • Analyzing the performance of equity shares and mutual fund schemes with their benchmark. • Finding the Volatility of shares by using beta. • Provide information about pros and cons of investing in Equity and Mutual Funds SCOPE OF THE STUDY The study is primarily deals with equity and mutual fund investments. The study covers 5 randomly selected stocks out of 30 BSE Sensex companies and 5 randomly selected mutual fund schemes out of mutual fund industry in India for comparison. The analysis is strictly based on share prices and Net asset values of
  4. 4. the mutual funds which will help an investor to identify better investment avenues from the market. Research Methodology:-- A. Sampling technique: - Since the population is heterogeneous stratified random sampling were taken B. Sample size: - Five companies and five mutual fund scheme were selected. C. Sample description: - In this study 5 companies have been selected from sensex and 5 mutual funds selected on the basis of their Net Asset Value and after that comparison made between them.