Equity mutual funds are those that principally invest in stocks. Simply put, they are instruments that help pool your money to invest in equity stocks after in-depth research. However, before delving into equity funds, let’s first know what mutual funds are and how equity mutual funds differ.
A mutual fund is a professionally managed investment fund that collects money from investors and then invests it in securities such as stocks, bonds and short term money market instruments. All the holdings of mutual funds are together known as a portfolio which is managed by you online in your account and monitored by a fund manager. Each security that you hold represents part ownership in the fund and the income that gets generated henceforth.
Depending on the investment objective, the investment strategy of the fund, your funds will be pooled in a category of stocks.
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Before investing in equity mutual funds, have a look at the following advantages.
- Diversification: Equity funds invest in a range of securities that lower the risk of any security that fails to perform. If you invest directly in stocks, you may not be able to invest in securities that can add to your portfolio. Thus, an equity mutual fund can bring about diversification to your portfolio and safeguard your investment.
- Lower entry levels: You can begin your investment in equity mutual funds for as less than 500 INR which can be particularly encouraging for investors who are interested in plunging into the markets with lesser capitals.
- Plans and services by Tradeplus: If you invest directly in the stock market, you may be deprived of the innovative plans that we offer. We Charge 0 brokerage on equity mutual funds. We also offer provide you direct mutual funds with SIP (Systematic-Investment-Plans), Flexi SIP, conditional orders that can help you to efficiently manage portfolio and ease your investing woes. We allow investors to make investments in direct mutual funds using our Web page and application without any platform fee.
Here is a run-down of the various types of equity mutual funds
As per guidelines of SEBI, equity mutual funds can be classified into 10 different sub-categories.
- Large-cap Funds: A minimum of 80% in large-cap stock investments.
- Large and Mid-cap Funds: Investing a minimum of 35% in large-cap companies and 35% in mid-cap stocks.
- Mid-cap Fund: A minimum of 65% in mid-cap stocks.
- Small-cap Fund: A minimum of 65% in small-cap stocks.
- Multi-cap Fund: A minimum of 65% in stocks of different market capitalization.
- Value/Contra Fund: Investing a minimum of 65% in equity by following the value investment strategy.
- Focussed Fund: The scheme exclusively focuses on the number of stocks and may invest a minimum of 65% of its assets and equity-related instruments.
- ELSS (Equity Linked Savings Scheme): Investing a minimum of 80% of total assets in equity and equity-related instruments with a statutory lock-in period of about 3 years that offer a tax benefit under section 80C.
Here are some top-performing Equity Mutual Funds for November 2019.
- Mirae Asset Emerging Blue-chip-Reg(G)
- Reliance Large Cap Fund(G)
- Canara Rob Emerge Equities Fund-Reg(G)
- HDFC Equity Fund(G)
- Aditya Birla SL Equity Fund(G)
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