Equity funds are a type of mutual fund that invests your money in company shares (stocks). The goal is to grow your money as the value of these shares increases over time.
How Do They Work (Equity Funds)
When you invest in an equity fund, your money is pooled with money from other investors.
A fund manager uses this money to buy shares of different companies.
If the value of these shares goes up, your money grows.
How Do They Work (Retirement Mutual Funds)
You invest regularly in a retirement mutual fund while you are earning.
The fund grows over time as the money is invested.
When you retire, you can withdraw the money in parts or as a lump sum to meet your expenses.
Why Choose Equity Funds
Higher Returns
Equity funds can give higher returns compared to other types of mutual funds or savings accounts.
Long-Term Growth
Best for long-term goals like retirement or buying a home.
Professional Management
Experts handle the investments for you.
Types of Equity Funds
Large-Cap Funds
Invest in big, well-known companies.
Safer and less risky.
Mid-Cap Funds
Invest in medium-sized companies. More risk but higher growth potential.
Small-Cap Funds
Invest in small companies. High risk but can give very high returns.
Sector Funds
Focus on a specific industry, like IT, healthcare, or banking. Risky but rewarding if the sector grows.
ELSS (Equity Linked Savings Scheme)
Helps save tax and grow wealth. Lock-in period of 3 years.
Who Should Invest in Equity Funds?
People looking for higher returns and willing to take some risk.
Investors saving for long-term goals like education, marriage, or retirement.