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Equity Funds: An investment you ought to make

Investors always look for a proficient way of investment. The equity mutual fund stands out as one of the best sources of investment. The equity funds are mutual funds, which are invested in stocks either actively or passively. In other words, equity funds are called stock funds. The diversified equity funds have always been proved to be fruitful for investors. However, there is a huge chunk of the population which is skeptical about investing in equity funds. For them, here are five reasons to invest in equity funds.

  1. Capital Appreciation

Capital appreciation is one of the primary benefits you will get after investing in equity funds. It helps you to have high inflation-beating returns. When stock prices change, it is reflected in the money you invest. It will help you accumulate a healthy sum in time.

  1. Diversification

When you invest in equity funds, it gets spread into different sectors. This helps the investor to minimize the risk of loss. If one stock underperforms in the market, it will not hamper the portfolio. In fact, the outperforming stock will make up to the loss. One thing should be noted that you cannot skip all the risks even though having diversified equity.

  1. Economic goals

For financial goals, equity mutual fund is the best investment. The funds in equity scheme are divided as large-cap funds, mid-cap funds, and small-cap funds.  The return on the funds will vary according to the size of the funds. To achieve financial goals one needs to take the higher risk as it generates the possibility of better returns.

  1. Easy on your wallet

A lot of times people hesitate to invest just because it strains their budget. However, equity mutual fund is different as you do not have to invest a hefty sum every time. With the help of Systematic Investment Plans or SIP, you can start your investment in tiny amounts. By investing Rs. 1000 you can get a portfolio of 40 stocks around ten different sectors. It is convenient also as the SIP you have decided will get deducted automatically on a pre-determined date. Without any special efforts, your investment will be channelized.

  1. Liquidity

Perhaps one of the crucial aspects of any investment is its liquidity. If you cannot withdraw your fund in the time of urgency, what’s the use of that fund? Equity mutual fund is liquid. If you want to redeem your fund, you will have to fill a redemption form and submit before 3 PM. The NAV of that day will be applied. The units will be redeemed in 2-4 working days. The open-ended schemes do not require such procedure as it can be redeemed at any time.

Equity mutual fund has always been a faithful and fruitful way of investment. Investors always look for secure and liquid investment and equity mutual fund ticks all boxes. If you are looking for fruitful investment, then invest in best diversified mutual funds for better returns.

Post Author: Fathiyya Al Shaikh

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