Equity Fund

This article helps to know Equity fund and its types.

What is Equity Fund?

An equity fund is a mutual fund that invest in stocks.

Equity fund is High risk and High return. Most of the investors likes to invest equity fund with good fund management and portfolio. Equity fund is High risk and High return. Most of the investors likes to invest equity fund with good fund management and portfolio. 

Stocks is an equity share of the company. If you buy a share of ITC or Tata Motors, then you are the owner of that share of that company.

Equity Fund Types

Multi Cap Fund

In September 2020, SEBI issued a circular making it mandatory for multi-cap funds to invest at least 75% of their total assets in equity and equity-related securities with a minimum of 25% exposure to equity and equity-related securities of each large-cap, mid-cap, and small-cap companies

Flexi-Cap Mutual Fund

The minimum investment in equity and equity-related instruments needs to be 65% of the total assets of the scheme.

Large Cap Fund

Minimum investment in equity & equity related instruments of large cap companies- 80% of total assets.

Large & Mid Cap Fund

Minimum investment in equity & equity related instruments of large cap companies- 35% of total assets.
Minimum investment in equity & equity related instruments of mid cap stocks- 35% of total assets.

Mid Cap Fund

Minimum investment in equity & equity related instruments of mid cap companies- 65% of total assets.

Small cap Fund

Minimum investment in equity & equity related instruments of small cap companies- 65% of total assets

Dividend Yield Fund

Scheme should predominantly invest in dividend yielding stocks. Minimum investment in equity- 65% of total assets.

Value Fund

Scheme should follow a value investment strategy. Minimum investment in equity & equity related instruments – 65% of total assets

Contra Fund

Scheme should follow a contrarian investment strategy.

Focused Fund

A scheme focused on the number of stocks (maximum 30) Minimum investment in equity & equity related instruments – 65% of total assets.

Sectoral/Thematic

Minimum investment in equity & equity related instruments of a particular sector/ particular theme- 80% of total assets.

ELSS

Minimum investment in equity & equity related instruments – 80% of total assets (in accordance with Equity Linked Saving Scheme, 2005 notified by Ministry of Finance).

ELSS Fund Investment used in 80C Tax deduction.

Conclusion

You should have at least one Equity Fund in your portfolio and it gives a better return than other Fund types like Debt fund or Balance fund even though it is high risk.


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