Question 1

What is Equity Fund?

Accepted Answer

An equity mutual fund is an open ended scheme that aims to generate capital appreciation over the long term by predominantly investing in equity and equity related instruments. These funds are ideal for investors with a  long term investment horizon. Since equity mutual funds predominantly invest in company stocks,  investors with a very high risk appetite considering investing in these market-linked schemes.

Question 2

How Does an Equity Mutual Fund work?

Accepted Answer

An equity mutual fund invests a minimum of 65% of its total assets in equity and equity related instruments.  The remaining assets are allocated by the fund manager managing the portfolio based on the scheme’s nature and its investment objective. Mutual fund investors who invest in equity funds are allotted units in quantum with the sum invested and as per the scheme’s current NAV (Net Asset Value).

Question 3

When to invest in equity funds?

Accepted Answer

When you have a very high risk appetite and a long term investment horizon spanning over 5 years or more, then you may consider investing in equity funds. Having a long term investment horizon might allow the equity fund to tackle market fluctuations and deliver. If you are looking for a mutual fund scheme that predominantly invest in equity, you may consider investing in equity funds.

Question 4

Benefits of investing in equity funds

Accepted Answer

Equity funds invest in a diversified portfolio of securities to generate capital appreciation over the long term. Equity mutual funds have designated fund managers who actively manage the scheme’s portfolio and ensure that the equity fund is able to outperform its underlying benchmark. Fund managers along with a team of analysts and market researchers carefully study the performance of various companies and invest in stocks that have growth potential.

Question 5

Is it good to invest in equity funds?

Accepted Answer

Investing in equity funds is a good option as they have the potential offer risk adjusted returns over the long term. Investing in equity funds may allow investors to create wealth however, investors may need to have a long term investment horizon spanning over five years or more so that the equity scheme is able to perform to its fullest potential. Also, investors who carry a very high risk appetite should consider investing in equity funds. Investors can target their life’s long term financial goals like retirement planning, securing their child’s financial future, buying their dream home, etc. by investing in equity funds.

Our Mutual Fund Schemes