WHAT ARE EQUITY MUTUAL FUNDS?
An Equity Fund is an open or close fund that invest primarily in stocks, allowing investors to but into the fund and thus buy a basket of stocks more easily than they could purchase the individual securities.
The fund manager tries to offer great returns by spreading his investment across companies from different sectors or with varying market capitalizations. Typically, equity funds are known to generate better returns than term deposits or debt-based funds. There is an amount of risk associated with these funds since their performance depends on various market conditions.
FEATURES OF EQUITY MUTUAL FUND
MUTUAL FUNDS AS PER SEBI CLASSIFICATION
Market Capitalization-based Categorization
Investment Strategy-based Categorization
Large Cap Funds – invest at least 80% in large caps
Multi Cap Funds– Invest at least 65% in equities & no market-cap wise restriction
Mid Cap Funds– Invest at least 65% in mid caps
Small Cap Funds– Invest at least 65% in small caps
ELSS Tax Saver Funds – Invest in Equity and offer tax exemption under 80C
Sectoral Funds – Invest at least 80% in chosen sector stocks
Theme and Sectoral funds – Equity Fund might decide to follow a specific investment theme like an international stock theme or emerging market theme, etc. Also, some schemes might invest in a particular sector of the market like BFSI, IT, Pharmaceutical, etc. Here, it is important to note that sector or theme-based funds carry a higher risk since they focus on a specific sector or theme.
Focused Equity Fund – This fund invests in a maximum of 30 stocks of companies having market capitalization as specified at the time of the launch of the scheme.
Please feel free to contact us regarding any queries related to equity mutual funds, we at SMFS will help you in your financial journey towards a secure future.