What are Equity Mutual Funds?

  Author: Kundan Kishore

Mutual funds collect money from thousands of individual investors and invest for them. This is done with the expertise of fund managers. Among the different types of mutual funds that an investor can invest in is equity mutual funds or equity funds. So, what are equity funds?

Equity funds invest the money of investors in the stocks of companies. They typically have their own objectives, themes and investment strategies.

Among mutual funds, this category has the highest risk. At the same time, this mutual fund category has the potential of providing the highest returns or rewards to investors when compared to other alternatives over periods of 8-10 years, or more. In India, to be considered as an equity mutual fund scheme, a fund has to typically invest 65% or more of its money in stocks. As an investor, you can consider equity fund investments for major long term needs such as child’s higher education and your retirement.

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