Equity funds are funds that invest capital primarily in equity securities. It is, therefore, a type of fund that presents a greater risk than the others, due to the close link with the stock market, which is inherently risky and the more unpredictable the shorter the time scale.
Equity Mutual Funds have about 1/3rd of the total assets under management in Indian Mutual Fund Market.
There are vast choices before investors, with about 500 schemes to choose from.
Types of equity funds:
- In the large-cap fund, a large portion of the investment is done in companies which have a huge market of capitalization. Large Cap Companies are big and well established and giving the complement of reliable as well as trustworthy.
- Investment in the Large cap Companies is for those investors who want to take a low risk.
- These funds are riskier than debt funds, However, they are less riskier than small and mid-cap funds
- Large-cap funds have lower growth potential as they are already well established in the market and given investors lower returns on investment as compared to mid and small cap funds. But provide excellent confidence in returns on investment, if invested for the longer duration.
- As Comes to Liquidity point they are highly liquid as they are highly established, reputed companies in the market.
- Some examples of popular large-cap Funds for 2019:
- Birla Sunlife Frontline Equity
- SBI Bluechip Fund
- ICICI Prudential Focused Bluechip Equity Fund
- Franklin India Bluechip Fund
- In mid-cap funds, a large portion of the investment is done by the companies having a medium level of the market capitalization.
- Mid-cap companies are for those investors who want better returns with a moderate level of risk as it is riskier than large cap.
- High Liquidity as compare to small-cap funds.
- Some examples of popular Mid-Cap Funds for 2019:
- HDFC Mid-Cap Opportunities Fund
- UTI Asset Mid-Cap Fund
- Sundaram Mid Cap Fund
Small cap funds:
- Companies having less than ₹ 500 crores market capitalization comes under this.
- As comes to risk and volatility they are highly Risk and Volatile should not opt by the new investor.
- Small Cap funds have exponential growth potential and give investors high returns on investment as compared to Large Cap as well as Mid Cap Funds.
- For those Investors having a piece of great knowledge about the market and can take the risk.
- Liquidity of shares of small-cap companies is least as compared to all.
- It gives a huge opportunity to wise investors to grow their investment quickly.
- Some examples of popular small-Cap Funds for 2019:
- Franklin India Smaller Companies Fund
- DSP Blackrock Small Cap Fund
- Reliance Small Cap Fund
- Balanced funds are one of the types of equity mutual funds, where an asset management company(AMC) invest the money gather into both equity and debt.
- These are highly diversified mutual funds as it contains both debt security and equity volatility.
- Low volatility funds, having perfect stability between risk and returns on investment.
- At last, the goal is again to make more returns.
- Some examples of popular balanced funds for 2019:
Sector Mutual Funds:
- Sector funds invest in stocks of companies that operate in a particular industry or sector of the economy, and. For example, a Cosmetic sector fund will invest in only shares of Cosmetic related companies. Bank sector fund will invest in only Stocks of Banking companies etc.
- These funds are regularly targeted in a particular sector like agriculture sector is benchmarked to NIFTY agriculture sector Index.
- Sector fund attracts those investors who want high returns or we can say high-risk with high returns.
- For Example:
- Tata Infrastructure Fund
- Invesco India Infrastructure Fund
Equity Linked Savings Scheme (ELSS):
- ELSS is a tax saving equity fund.
- These are Multi-Cap funds with 3 years lock-in and give tax benefit under Sec 80C.
- They can invest in any stock across Large, Mid & Small Cap
- Some examples of popular ELSS for 2019:
- L&T Tax Advantage Fund.
- Axis Long Term Equity Fund.
- Index funds are invested in those companies which come in particular index in the same exact portion as it copies the particular index(Sensex or Nifty).
- Index funds follow the performance of a particular index to park money of investors.
- Index funds are meant to copy the performance of the index.
- In Index funds, the role of the fund manager is limited to the cost saving is transferred to investors.
- Some examples of popular index funds for 2019:
- ICICI Prudential Nifty Index Fund
- HDFC Index Fund – Sensex Plus Plan
Benefits from Equity Funds
Equity funds also get the same benefits that we have from mutual funds. As the ease of investing, transparency, low risk etc.
The key advantage is that you do not need to worry about investing in stocks and areas. All the work is done by the fund manager.
How to invest in Equity Funds?
Investing in Equity funds is very easy for either you can start investing using a broker or agent and then by yourself online.
If you are new to the market then you should invest by using the broker because it will make all the information related to investment and funds.
Brokers and agents take a fee from you for this. But there is also favor that we are investing with the help of an expert.
Online or indirect investment, you are responsible for your own activities. There is no help from a broker or agent.
For this, you can create an account and start investing by going to the websites of Reliance Mutual Fund’s website such as Reliance.
On these websites, you can call KYC, Bank
Details will be given, which will be used when you buy funds. You can buy and sell your own funds in direct investment.
Even when you have a broker, you also save the extra amount given to him and you want
She can also invest in buying funds. You can invest in Direct Investments anytime. There is no time slot in it. any time anywhere you can invest.