Do you know what Equity Fund is? Today many people are in the same dilemma as to what Equity Funds are. There is no factual information related to these funds on any website. For this, today, we have brought these posts related to equity funds for you. Our base will answer all the questions about your equity funds.
We have already told you about Mutual Funds on our website, what are these Mutual Funds and how do they work. So as we said earlier, we can divide Mutual Funds in 3 ways: debt, hybrid and third equity. Equity Fund is a scheme of mutual funds that invests exclusively in shares/company stocks. They are also called Growth Fund. Equity Funds are considered to be the most popular among these three funds. So let us know what this Equity Fund is and what are its benefits.
What is an Equity Fund?
Most of the investment in Equity Fund is used for investing in the stock markets. These Mutual Funds can be beneficial for those investors who are ready to take risk in the stock market. Because if there is more profit in the equity fund, then along with it, the risk is equally high. Through the equity fund, investment in equity-related things is made in the secondary market.
Equity Funds offer high returns with high risk. Most equity funds are invested according to the market capitalisation of companies. In simple words, the funds that invest in the stock market are called equity funds. Most of them invest with the idea of making more profit in less time.
Types of Equity Funds
Equity Funds can be classified in many ways. Equity funds are mainly divided into Large Cap, Mid Cap, and Small Cap. But apart from these, there are many other funds like diversified funds and sector funds, let’s know about them.
1) Large Cap Equity Funds: Large-cap equity funds are primarily invested in large companies only. These companies are well established in their area, and their chances of sinking are new, or companies with less market capitalisation are less. This is why large-cap companies are considered safe for investment. Only large companies are likely to be in large caps. For this reason, only large-cap funds are deemed suitable for equity investors who do not like to take much risk in equity funds. Such funds provide simple returns with low risk.
2) Mid Cap Equity Funds: In mid-cap equity funds, primarily medium-sized companies are targeted and invested only in medium-sized companies. Investment in these companies involves some risk. Because the company may not perform to its full potential. And you had to lose your money. But you can also benefit from investing in such funds. If the company invested later develops and becomes a big company. So you can be very profitable and can also be very beneficial for you. Those individuals who can afford more risk invest in such equity funds.
3) Small Cap Equity Funds: Mutual Fund schemes, through which most of their money is invested only in the shares/stocks of small companies, then that kind of mutual fund is called Small Cap Equity Fund. The managers of such schemes invest only the majority of their funds or the real money in small companies only. For this reason, investments made in such systems are much riskier than mid-cap and large-cap funds, but the returns from small-cap equity funds are also many times higher than large-cap or mid-cap schemes. Can.
Investing in these companies is also risky because very little information about them is publicly available. The small-cap equity fund is only for investors with a high-risk appetite.
4) Sector Funds: A sector fund means investment in a particular sector. These funds are invested only in shares of companies of a specific industry. Since acquisition in sector funds focuses on only one drive, sector funds have been considered very risky in funds. According to the intelligence of the fund manager in the sector fund, invests in any sector which has the highest profit potential; for example, the real estate sector fund will invest only in real estate companies. Investors should avoid investing in sector funds. Because there is no trust in such funds, support only a tiny part of your capital in these funds if you want to invest.
5) ELSS (Equity Linked Saving Scheme) or Tax Saving Funds: Equity Linked Saving Scheme or Tax Saving Mutual Funds is a way for investors to get income tax exemption. Tax exemption is provided under Section 80C of the Income Tax Act. Up to Rs 1.5 lakh invested in these funds are capable of tax reduction. Such funds come with a lock-in period of three years. A lock-in period implies that these funds cannot be withdrawn for three years after investing, and such funds can be withdrawn only after the completion of this period.
6) Diversified Equity Funds: These equity funds invest in all sectors. This means that these funds are not restricted to invest only in certain types of stocks. They have a lot of investment options. And because of them, they keep investing in big companies, mid-sized companies and small companies etc. These funds invest in companies from different sectors and industries. In simple terms, such investment is not limited to investment in any particular part of the economy.
Equity Funds Benefits
Equity Funds also provide all the same benefits that we have from mutual funds, such as ease of investment, transparency, low risk etc. The significant advantage of investing in an equity fund is that you do not have to worry about investing in stocks and sectors; the fund manager does all this work.
How to Invest in Equity Funds
Investing in equity funds is very easy; for this, you can either start investing using a broker or agent, or you can start investing online by yourself.
If you are new in the market, you should invest with the help of a broker because this will give you all the information related to investment and funds.
Brokers and agents charge you a fee for this. But there is also a convenience that we are investing with the help of an expert.
In online or direct investment, you are responsible for your activities. No broker or agent’s help is used in this.
For this, you can create an account by going to the mutual funds of companies like Reliance etc. and start investing. On these websites, you will have to provide information about KYC, bank details etc., which will be used when you buy funds.
Indirect investment, you can buy and sell funds as per your wish. Due to the absence of a broker, you also save the extra amount given to him, and if you want, you can also invest him in buying funds.
You can invest in direct investment anytime. There is no time limit in this; you can invest at any time and any place.
Top Equity Funds to Invest
There are equity funds of many companies in India; now the question comes in which company funds are invested, then we tell you which equity funds of which company can be beneficial for you.
Top 5 funds that can be beneficial for your investment.
- SBI BlueChip Fund-Regular (G)
- Birla SL Frontline Equity Fund (G)
- Franklin India Prima Plus Fund (G)
- Meera Asset Opportunities Fund-Regular (G)
- HDFC Mid Cap Fund (G)
If you invest in these funds, you can make a good profit.
To invest successfully, a lot of research is required before investing in any company and make complete information about that company’s financial situation. And when you are completely satisfied, then only invest in equity funds.
I hope you guys have understood about Equity Fund. I request all readers that you too should share this information in your neighbourhood, relatives, and friends to have awareness among us, and everyone will benefit a lot from it. I need your support so that I can convey more new information to you.
But still, if you see any deficiency in our post, please give your opinion in the comment box and help us correct that deficiency; thank you.