Do you know what is the equity fund? Today many people are not aware of what is Equity Funds. There is no information available on any website Related Equity fund. For this, we have created these posts related to equity funds for you today this post will answer all the questions related to your equity funds. so let’s begin.
We have already told you about mutual funds in our Previous post. Now we can divide the mutual funds into 3 types (1) Debt, (2) Hybrid and (3) Equities.
Equity Fund is a mutual fund scheme that specializes in stocks/shares of the company. They are also called Growth Funds. The most popular Equity Funds are considered in these three funds. So let us know what is the Equity Fund and what are its benefits.
What is Equity Fund and how to invest in it?
Most of the investment in Equity Fund is used for investing in the stock exchanges. This Mutual Funds can be beneficial to those investors who are ready to take risks in the stock market. Because if the equity fund has more profits, then the risk is equally high. Equity funds are invested in securities markets related to equity related items.
Equity Funds offer higher profits with high risk. Most equity funds invest in companies according to market capitalization. In simple words, the funds that invest in the stock market are called equity funds. Most of them invest in less time thinking of earning more profits.
Types of Equity Funds
Equity funds can be classified in many ways. Equity funds are mainly divided into Small Cap, Mid Cap, and Large Cap But apart from these there are many more funds like Diversified Funds and Sector Funds, let’s know about them.
1) Small Cap Equity Funds:-
The Mutual Fund Scheme, which is invested most of their money into small companies shares/stocks, then they called Small Cap Equity Fund. For this reason, the investment made in such a scheme is riskier than the mid-cap and large-cap funds, but the profits from the Small Cap Equity Fund are much higher than the long or mid-cap scheme.
Investing in these companies is also risky because very little information about them is publicly available. Small Cap Equity Fund is only for investors with the potential to take high risk.
2) Mid-Cap Equity Funds:-
Mid-cap equity funds are targeted mostly by medium-sized companies and invested only in medium-sized companies. There is some risk involved in investing in these companies. Because the company may not be able to perform according to its full potential. And you have to lose your money. But investing in such funds can also benefit you. If the invested company develops forward and becomes a big company. Then you can be quite profitable and can be quite beneficial for you too. Those individuals who have the ability to afford more risk, invest in such equity funds.
3) Large Cap Equity Funds:-
Large Cap Equity funds are mostly invested in large companies. These companies are well-established in their area and they are less likely to drown new or less market capitalization companies. That is why companies with large caps are considered safe for investment. Only large companies are likely to be in large caps. For this reason, large-cap funds are considered suitable for equity investors who do not like to take even more risk in equity funds. Such funds provide simple returns with low risk.
4) Sector Funds:-
Sector fund means investing in a specific sector. These funds are invested in shares of companies in a particular area only. Since the investment made in the Sector Fund is focused on only one area, the sector funding has been considered to be extremely risky in the world. In the sector fund, the fund manager invests in any sector according to his intelligence, in which the prospect of profit is most likely, for example, the real estate sector fund will invest only in real estate companies. Investors should avoid investing in sector funds. Because such funds are not trusted. If you want to invest, then only a small part of your capital investment will be invested in these funds.
5) ELSS (Equity Linked Savings Scheme) or Tax Saving Funds:
Equity Linked Savings Scheme or Tax Saving Mutual Funds is a way to get income tax exemption for investors. Tax exemption is granted under Section 80C of the Income Tax Act. The amount of up to Rs 1.5 lakh invested in these funds is capable of a tax deduction. Such funds come with a lock-in period of three years. The lock-in period means that, after investing, these funds cannot be withdrawn for three years and only such funds can be withdrawn after the expiry of this period.
6) Diversified Equity Fund:-
These equity funds invest in all sectors, which means that these funds are not restricted to investing only in certain types of stocks, they have a lot of investment options. And because of them, they invest in big companies, mid-sized companies, and small companies. These funds invest in companies of different sectors and different industries. In simple words, such investments are not limited to investment in any particular part of the economy.
Benefits from Equity Funds
Equity funds also get the same benefits from us which are mutual funds. Such as ease of investment, transparency, low risk etc. The main advantage of investing in equity funds is that you do not have to worry about investing in stocks and sectors, all these work is done by the fund manager.
How to invest in equity funds
For this you can create an account by going to the websites of Mutual Funds such as Reliance, etc. and start an investment. On these websites, you will have to give KYC, bank details etc. which will be used when you buy funds.
You can buy and sell your own funds in direct investment. If you do not have a broker, you also save the extra amount given to him, and if you want, he can also invest in buying funds.
You can invest in Direct Investments anytime. There is no time limit on it. You can invest from any point of time and anywhere.
Top Equity Funds to Invest
In India, equity funds are present in many companies. Now the question is, what investment in the company’s funds, we can tell you which company’s equity funds can be beneficial for you.
Top 5 funds that can be beneficial for your investment.
- Franklin India Prima Plus Fund (G)
- SBI BlueChip Fund-Regular (G)
- Meera Asset Opportunities Fund-Regular (G)
- HDFC Mid Cap Fund (G)
- Birla SL Frontline Equity Fund (G)
If you invest in these funds then you can earn good profits.
To invest successfully, it is necessary to do a lot of research, before investing in any company, fully understand the financial condition of that company. And only when you are fully satisfied, invest only in equity funds.
I hope you guys have got an understanding of Equity Fundi. I am convinced of all the readers that you too share this information with your neighbors, relatives, your friends so that we will be aware of our interactions and will all benefit from it. I need people’s support from you so that I can bring you even more new information.
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