Equity mutual fund – Benefits and types of equity

Posted by sambawa on July 31st, 2019

An equity fund is a mutual fund which is invested principally in stocks. This fund is also known as a stock fund. Equity funds are actively or passively invested. These funds are categorized according to a market capitalization the investment size and whether they are domestic or international. Most of the people also call it a practical investment. The risk in the equity mutual fund gets lesser because it requires small capital for investment. The return in this type of Investments is very high.

Best Equity Mutual Funds in India

• Kotak emerging equity scheme(G)
• L &T midcap fund (G) -Direct Plan
• SBI small-cap fund(G) -Direct Plan
• Miraeasset emerging Bluechip(G)
• Canara Robeco emerging equities fund 

*Past performance a not a guarantee of future result

Benefits of equity Mutual Fund

Capital appreciation

The primary benefit of investing in equity mutual fund gives you capital appreciation. It provides you high-inflation Returns. If there is an increase or decrease in the stock prices, it would clearly show or reflect so that one could get a good amount of money.

Portfolio diversification 

When an investor invests in equity mutual fund, then their investment gets divided into essential sectors, which reduces the risk of future loss. Therefore, if some stocks did not work well, then and the other stocks will cover up the losses of those underperformed stocks.

Hence it minimizes the risk in your overall portfolio. 

Pocket-friendly

One can invest easily in equity Mutual Fund because it doesn’t require significant capital for the investment. It also gives high returns with those small Investments in the mutual fund.

Types of equity funds

Large-cap equity Mutualfunds-

As the name suggests, large companies are involved in these types of funds. So, the name of the companies is so big; thus, the returns are also very high.

•     Mid-Cap equity mutual funds-

Mid Cap equity mutual funds are invested in medium-sized companies.

•     Mid-and -small-cap equity mutual funds

The investor invests in small and medium companies both. So, the returns are also variable.

•     Small -cap equity mutual funds

As we know that small companies are very volatile, so the returns are also very fluctuating.

•    Multi cap equity mutual funds

In this type of equity mutual funds, the funds are invested in large medium and small companies.

Who should invest in equity mutual funds?

Before investing in any type of scheme, any type of investment an investor should know the risk appetite and appreciate the returns. This fund is good for the investor who is having 5 years I am more than that of investment Horizon. For the small-time investor, this type of fund cannot be good because of the fluctuations in the stock market. If you are good in investing or a player in the investment market, then you should go for it to invest in diversified equity mutual funds.

*Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.