What are Equity Mutaul Funds
An Equity Fund is a Mutual Fund Scheme that invests predominantly in shares/stocks of companies. They are also known as Growth Funds.
Equity mutual funds aim to generate returns by investing in stocks of publicly listed companies across the market. Equity mutual funds are the riskiest class of mutual funds, and hence, they have the potential to provide higher returns than debt and hybrid funds. The stocks are selected by a team of professionals who try to deliver maximum returns from your investments while keeping risk in control. By investing in an equity mutual fund in, we invest in a diversified portfolio of stocks across different sectors.
Equity mutual funds types are bifurcated in three types:
- Small-cap equity funds
Small-Cap funds invest in small-sized companies. They invest in shares of companies which are ranked below top 250th companies in terms of market capitalization.
- Mid-cap equity funds
Mid Cap Mutual Funds invest in the mid-cap companies with higher growth potential but don’t exhibit risks associated with small caps since these companies have attained a certain scale and stability.
- Large-cap equity funds
Large Cap Mutual Funds are equity funds that invest in companies with large market capitalization.Large-cap companies are those that fall in the top 100 ranks of the given benchmark.