Equity Fund is the highest return investment option in Mutual Fund, so before investing in them, you should know what is Equity Fund, Equity Fund kya hote hai, Should I invest in Equity Mutual Fund, Investment in Equity Funds How and from where? Let’s know –
Investing in equity funds can be a profitable deal for you as these funds give very good returns in the long term with some risk which can meet your long term investment goals but before investing you must know that equity funds What happens?
What is Equity Fund?
The money invested by mutual fund houses in equity oriented stocks is called Equity Fund. It is a type of mutual fund which comes under the asset class.
Equity Funds are more risky in terms of investment and have the potential to provide higher returns in the long run. There are many types of Equity Funds – Large Cap Fund, Mid Cap Fund, Small Cap Fund, Multi Cap Fund etc.
Mutual fund houses and asset management companies pool funds from investors and invest in equity, debt, bonds and various securities.
When 60 percent or more money is invested in equity funds to get higher returns, then these funds are called Equity Oriented Mutual Funds.
These funds are also known as high risk and high income generator funds. Before investing in these funds, you must be aware of its risk factors as these funds completely depend on the performance of the companies and the stock market.
If the risk in equity funds is high, then the returns are also very high, so if you want to earn more returns and are able to take risk, then you can invest in equity funds.
If you want a long term return on your investment i.e. three or more years, then equity mutual funds are the best option for you.
It always gives good returns in long term as it depends on the performance of the companies and companies need some time for growth. You should always have basic knowledge about mutual funds.
Market capitalization, or market cap, is an indication of the value of a business based on the price of shares and the number of shares outstanding.
As such, these stock funds target companies of particular capitalization ranges which include mega-cap equity funds, large-cap equity funds, mid-cap equity funds, small-cap equity funds, micro-cap equity funds, etc. Is.
Should I invest in Equity Mutual Funds?
YesEquity funds are considered to be the most popular option for investment and have the potential to give you very good returns on your investment. Equity Funds generally have the potential to provide returns of 8-20% per annum on long term investments.
But, before investing money you must get the basic information about it like – last performance of that fund, what is the risk factor, what is the maturity period and other factors which depend on your investment capability and plan.
Mutual funds provide diversification. This means that your money is not invested in a single stock but in a basket of shares i.e. different securities. If some stocks underperform, other stocks in the fund offset the losses, thus reducing your overall risk.
Some equity mutual funds like Equity Linked Savings Scheme (ELSS), offer tax benefits under the Income Tax Act. The scheme has a lock-in period of 3 years which is the lowest as compared to any other avenues such as five year Fixed Deposit (FD), Public Provident Fund (PPF) or other long term funds.
Capital appreciation is an important objective for these funds. But since the returns on equity mutual funds are linked to the movements of the stock market and the risk level in these funds is high, you must plan about your investment goals and savings.
If you want to invest for long term goals then these funds are a good option for you. As per your savings and investment plan, investing in equity funds can be a great option for you and these funds can make you rich in the coming few years.
How and from where to invest in Equity Funds?
offline fund house
You can invest in various mutual fund schemes by visiting the nearest branch office of the fund house. You just have to carry the following documents with you –
- Leaf proof.
- proof of identification.
- Canceled cheque.
- Passport size photograph.
The fund house will provide you with an application form which you need to fill and submit along with the required documents.
investing through a broker
A mutual fund broker or distributor is someone who helps you through the entire investment process. He provides you with the necessary information related to investment which includes features of various fund schemes, documents required etc.
He also offers guidance on which schemes you should invest in. For this he charges you a fee which is deducted from the total investment amount.
You can apply online by visiting the website of Asset Management Company (AMC) or Mutual Fund House. Some AMCs also have apps for investing in funds.
The advantage of investing directly through the fund house is that you do not have to pay agent/broker charges.
Equity Funds – Important Tips
- Investment in equity funds is subject to market risk so invest with proper knowledge, for this you can get basic information from internet.
- Equity market always gives good returns in long term so before investing your money in it you must plan and invest with long term objective.
- There are various types of funds in the market so choosing the right fund is quite difficult but if you want to invest in equity mutual funds, then you should go with large cap funds.
- Equity funds offer SIP and lump-sum investment options. Investors can invest as per their convenience.
- Equity market has high risk with high returns so initially start investing with only your spare capital.
Equity Funds FAQ
What is the meaning of Equity Fund?
The money invested by mutual fund houses in equity oriented stocks is called Equity Fund. It is a type of mutual fund which comes under the asset class. Equity funds are also called growth funds. These funds are very risky from the point of view of investment and it is considered better to invest in them with a long-term objective.
What is the difference between equity and mutual fund?
Equity is the total investment amount that is invested by an individual in a company listed in the stock market whereas Mutual Fund is a scheme offered by various fund houses to invest money of like-minded people with a common investment objective. offers to do.
Which is the best equity fund?
Top 100 companies listed in the stock market i.e. shares of large cap companies are considered the best equity funds.
Should I invest in Equity Funds?
Yes, one should invest in equity funds as these funds are considered best in terms of returns.
What are the types of Equity Mutual Funds?
There are many types of Equity Funds which mainly include Large Cap Fund, Midcap Fund, Small Cap Fund, Multicap Fund, Value Fund, Sectoral Fund, Thematic Fund, Equity Linked Savings Scheme, Contra Equity Fund, Focused Fund.
What is the main objective of equity fund?
The main objective of equity mutual funds is to provide best returns to its investors by investing for the long term.
Are equity funds a good investment option?
Equity Funds are considered a good investment option for meeting long term objectives. You can keep your invested money in equity funds for at least 5 years to get good returns.
Where to invest in equity funds?
You can invest in equity funds offline or online or you can invest directly through a mutual fund broker.
How much return can be earned in equity funds?
Long term investment in equity funds can fetch 8 to 22% returns.
Is it right to invest in equity mutual funds?
Yes, it is absolutely fine to invest in equity funds but you should know your investment objective and as per our advice you should invest for at least 5 years.
Can equity funds make you a millionaire?
Yes, equity funds are a great way to invest, you can easily become a millionaire after about 15 years.
What is the important tip for investing in Equity Funds?
The risk in equity funds is very high and the returns are also very high. But, if you want to get good returns with low risk then invest in equity funds keeping long term objective in mind and should invest for at least 5 years.