Equity Mutual Funds can generate better appreciation as compared to other Mutual Funds though there are higher risks involved.
One of the most popular investment tools today are Mutual Funds, and there are many reasons for its growing popularity. It’s ability to yield an impressive return as compared to other traditional forms of investment makes it an ideal choice for those looking to gain maximum returns on their investments. When we talk about attractive returns, Equity Mutual Funds come as the best choice amongst all. However, choosing the right Mutual Fund is very important. Experts at ETMONEY share their insights on the subject, which will help investors make the right choice.
What Exactly Are Equity Mutual Funds, And How Are They Different from Others?
These funds invest in stocks or shares of a company with the sole aim of generating capital appreciation over a period of time. Equity Funds invest a majority of their corpus in Equity Shares while allocating some portion in other securities like debt and money market instruments. These are managed by a fund manager who allocates the assets as per the scheme’s objectives. Equity Mutual Funds are an ideal choice for those wanting to risk a bit for higher capital appreciation.
What Are the Benefits of Investing in Equity Mutual Funds?
Though Equity Mutual Funds carry greater risks these offer slightly better returns that helps beat inflation if one stays invested for a longer period of time. Depending on market conditions and volatility the value appreciates or depreciates, still a substantial amount of wealth can be accumulated at large if one looks at long term. Secondly, investments can be initiated via SIPs where the investment amount can be as low as Rs.500 a month, which is easy on the pockets. In fact, SIP is the best method to stay invested and beat volatility in the equity market. Furthermore, Equity Funds invest in diversified stocks and even if some stocks are not performing well, others make up for it. There are various other benefits like one can liquidate their Equity Funds at any given point of time and also avail of tax benefits on their investments.
Is Investing in Equity Funds a Lucrative Option?
Since Equity Funds invest in stocks, they are highly volatile and carry some amount of risk, therefore, they are best suitable for investors who are well-prepared to face high risks involved and are comfortable in staying invested for long term as the kind of returns Equity Funds can offer is slightly better in comparison to other schemes.
To know more about Equity Mutual Funds, visit https://www.etmoney.com/mutual-funds/equity.