Sep 21, 2016 3 min read

Are Equity Funds the Right Choice for You?

If you are looking for making the right choice of funds for investments and need to know the traits of equity fund, then you must read this blog. It will help you in knowing whether ‘Equity Funds’ are beneficial for you or not.
Before making the selection of the scheme, it is quite essential for you to make a better review of all the funds and choose the one best suited as per your requirements. Here we have listed the parameters on the basis of which you can make the apt choice for investing in the mutual funds.

The equity fund is one of the asset classes in which the funds are allotted in the shares, stocks and other equity-related instruments. The investments made are generally for the long-term duration and fetch the growth of capital and high earnings. The monies invested in the schemes of this category are put into the stocks of such companies which has small, medium or large market capitalisation. Accordingly, it is subdivided into large cap funds, small cap funds and mid cap funds.

Who Should Consider Investing in Equity Funds?

The equity funds are suitable for those investors who are seeking

  • Capital Appreciation: The schemes under this category are designed to offer high growth in capital by making investments in the most prominent and growing projects. Some of the schemes also offer regular earnings and help one to gain financial stability.
  • Investments in the Equity and Capital Market: All the funds of this class are invested in the equity and related instruments. With this, investors can gain the benefit of investing in the capital markets and earn high yields.
  • Longest Time Horizon: It is known to everyone that equity yields return over time. So the investors who can make investments for a longer duration can opt for this fund. Although, there are plans which are designed to offer short-term capital benefits as well, but they offer comparatively fewer returns.
  • Medium to High Risk Factors: As all the stocks and shares are prone to market fluctuations, henceforth, the schemes are quite riskier from an investment point of view. But, if one can bear some risk in turn of high returns, then they must opt for the schemes of this asset class.
  • Tax Benefits: One can also avail the tax exemptions by investing the money in the ELSS equity funds. They offer tax saving by providing exemption on the invested amount, returns earned and capital gains.
  • Diversification: The most important point of consideration in mutual funds is its nature of diversifying the funds. This is what makes it different from others. The investors who want to earn good returns from a completely diversified portfolio can invest the monies in an equity fund. It makes allocation of the invested amount into different companies and furthermore in divergent sectors.
  • Minimised Risk: The schemes under the equity funds are well designed and diversified and thus assure minimised risk factors. They are less exposed towards uncertainty and ensure yielding of higher returns.

MySIPonline recommends Equity Funds as they have outperformed other investment asset classes over the long-term in India as well as globally. They have maintained a regulatory environment and improved corporate governance, which have brought more investors towards equities. The schemes of this category are best suited for investors who want to grow their money higher in the coming years at a rapid speed.

So, if you want the benefits as mentioned above, then you can opt for the Equity Funds for investments. You would definitely earn the expected yields in the future and create a fortune for yourself. We, at My SIP Online, are always ready to cater your needs. You must get associated with us to take the best advisory services.