Mutual funds scheme which invests in shares of different companies is known as an equity fund. The other name for this fund is growth fund. These are the funds in which 65% of the asset is invested in equity and the rest 35% is invested in debt.
Details about equity fund: knowing more about equity funds will help you in getting knowledge about the working of the equity fund. Also, this will help in the selection of the best equity fund for yourself.
Aim of your investment: Many equity funds are there which can be chosen according to the objective of your investment. So the aim of your investment decides which equity fund scheme would be a good option for you.
History of the fund: fund history tells a lot about the fund. So before you invest looking at the history of the fund is important. Fund history of the fund contains the record of the fund about its strength and its eligibility.
The strategy of your investment: Being an investor you should know about the strategy which is being followed by the equity fund scheme professionals. The investment strategies consist of top-down, bottom-up, value and growth strategy.
- Top-down strategy: In this type of strategy the first step is choosing sector after that the best stocks are placed in the portfolio.
- Bottom-up strategy: In these stocks are bought in the portfolio after doing good research.
- Growth strategy: It is a strategy in which investment of the fund will be in the companies which have a record of constant profit and such path of profit will be followed in the future.
- Value-strategy: It is a strategy in which the investment of the fund will be in the companies which are at low value presently but they are going to develop rapidly in the future.
Expenses: You should know that you are being charged if you invest in equity mutual funds. In comparison with any other scheme of a mutual fund, equity mutual funds are charged more than the other asset class. The charge depends on the risk of the asset class. The charges are directly proportional to the risk. All of these charges are known as the expense ratio. These expenses are the amount required to run a mutual fund scheme, cost of management, cost of distribution. Also, these will be changed in the expenses of the equity mutual fund schemes as those equity mutual funds could be passive or active.
Best Equity funds for the year of 2019: Following is the list of top equity mutual fundss for the year 2019
- SBI Smallcap Fund
- Mirae asset emerging Bluechip fund
- CanaraRobeco emerging equities fund
- Reliance Small Cap fund
- Kotak emerging equity scheme
Thus, you can say that in an equity mutual fund scheme your money will be invested in stocks of companies. It is very important to know about equity funds. This article will help you in getting to know about the objective of investing money in an equity fund.
