An Equity Fund is a type of mutual fund that primarily invests in stocks (equities) of companies to generate capital growth over the long term
Equity Funds pool money from multiple investors and invest it in a diversified portfolio of company shares listed on stock exchanges. These funds are managed by professional fund managers who aim to generate higher returns by selecting quality stocks.
Equity funds are considered high-risk, high-return investments, making them suitable for investors with a long-term horizon and higher risk tolerance.
Types of equity funds include:
Benefits of equity funds:
However, returns are subject to market fluctuations, and short-term volatility is common.
"An investor invests ₹50,000 in an equity mutual fund. The fund invests in multiple stocks, and over time, the value of the investment grows based on market performance."