What Are Equity Mutual Funds?
Equity mutual funds are investment options mainly investing in stocks, allowing investors to earn money as stock prices rise. These funds provide returns through dividends and capital gains, which means investors indirectly own a part of the companies they invest in. Unlike fixed-income options like debentures, equity funds have the potential for higher returns but also have more risk.
Equity mutual funds are best suited for long-term goals, like saving for education or planning for financial independence, because their value can go up and down in the short term. These funds comprise a large portion of the Indian mutual fund industry, with about one-third of the total assets invested in equity funds. There are over 500 different equity mutual fund schemes available for investors to choose from.
For example, the ICICI Prudential Bluechip Fund, a popular equity fund, manages around ₹ 63669.82 Crores and has given an annualized return of about 15.38% since inception, i.e. 23 May 2008 (as of 03/12/2024). Since many equity funds exist and the market can be complicated, it’s important to have expert help. A mutual fund advisor or distributor can guide you through the process, ensuring you pick the right funds that match your goals and how much risk you’re willing to take. Their professional advice can help you make smarter investment decisions.
