Equity Funds

Equity Funds are mutual funds that invest predominantly in stocks that are listed on Stock Exchanges like the Bombay Stock Exchange (BSE) or the National Stock Exchange (NSE) in India as well as Global stock exchanges like the Dow Jones, London Stock Exchange or LSE etc. These mutual funds are actively or passively managed. Equity Funds can also be divided as per Market Capitalisation, i.e. Large Cap, Midcap, Small or Micro Cap Funds. Another popular equity mutual funds are Index Funds and Sectoral / Thematic Mutual Funds.

1. Ideal for building wealth over the long term
2. Asset class with the highest potential gains, therefore come with the highest risk
3. Large Cap funds invest in well-established companies known as Blue-chip. The aim of the fund is to generate steady capital appreciation and less volatility
4. Large and Midcap funds invest in blue-chip and medium-sized companies. These funds have potential to generate higher return with additional risk of midcap companies
5. Midcap funds invest in medium-sized companies that has potential to grow faster. These funds are ideal for high-risk investors because of the volatility during tough market conditions
6. Multicap funds invest across large, mid and small sized companies. It covers overall potential of stock market as it has the flexibility to invest across market capitalization depending on opportunities
7. Index funds are passively managed funds that mimic their benchmark. The investment in these funds is done in companies as per the weightage in benchmark like Nifty 50, BSE Sensex, etc.