How many equity mutual funds are there

So, the performance of these schemes depends on the performance of the respective sector. These funds may give higher returns, but they also come with increased risks. Equity-Linked Savings Scheme ELSS is an equity mutual fund investment that invests at least 80 per cent of its assets in equity and equity-related instruments. ELSS can be open-ended or close ended. The amount you invest in ELSS is deducted from your taxable income, which helps you lower the amount of income tax you are liable to pay.

Investments in ELSS are subject to a three-year lock-in period. Investing in equity mutual funds comes at slightly higher risk as compared to debt mutual funds, but they also give your money a chance to earn higher returns. Now that you know more about different types of equity mutual funds, what are you waiting for? Contact your investment advisor today. History of Mutual Funds in India. Equity Funds. Debt Funds. Liquid Funds. Balanced Funds. Funds of Funds. Gold ETFs. Tax Regime for Mutual Funds.

Direct Plan. Expense Ratio. They research and analyze various technical and fundamental indicators such as the profitability of any company, its ability to survive challenging phases in the economy, the sector in which it operates, etc.

And based on this research, they arrive at investment decisions such as which stocks to buy, at which price to buy and sell, how many of them to buy, etc.

Also, after buying these stocks, the fund manager continuously tracks how the companies are performing, how the sectors in which they operate are performing, how the economy is performing, and various other crucial factors that can steer the prices of these stocks.

If they feel some of the companies whose shares they had bought wouldn't perform as expected, they take them out of their portfolio. Similarly, if they see some companies showing a lot of promise, they invest in them at an early stage. Because these fund managers are continually tracking the financial markets and economy, they have the advantage to take such tactical calls and get the best out of equity markets and handle the volatility better.

Equity Funds can earn in two ways: One, by buying shares of a company at a lower price and selling it at a higher price. As mentioned earlier, the Fund Manager keeps tracking the market and decides which stock to exit and where to invest. So if there is a stock whose price has gone up substantially and the Fund Manager believes it is the right time to sell, he will do so. The gain made by selling at a higher price than what he bought the stock for is Capital Gains.

The Fund Manager then decides where to reinvest these gains so that money also grows. This is where compounding comes into play. You earn returns on the returns generated by your investments. The second source of returns for Mutual Funds is the dividends distributed by the companies. Since Mutual Fund owns a part of the business, if the business does well, the Fund gets the share of profit in the form of dividends.

The Fund Manager decides how to invest that dividend received. Who should invest? All other schemes are deemed as Other schemes Investors keen to invest in Equities but don't have the expertise or the time : There are many people who want to invest in stock markets.

However, they simply cannot do it because they don't have the time to do the necessary research and constantly track markets. For such investors, Equity Mutual Funds offer an opportunity.

All one needs to do is pick a good fund and invest in it regularly. Rest will be taken care of by the fund manager. They will analyze various technical and fundamental indicators such as the profitability of any company, its ability to survive challenging phases, the sector in which it operates, and so on. Investors who want to Start Equity Investing with a Small Amount: Many investors want to invest in the equity markets but cannot do so because they want to invest small amounts.

Investors who can Stay Invested for More than 5 Years: Equity Funds can be volatile in the short-term, but they have the potential to generate handsome returns in the long run. The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.

Related Terms Blend Fund Definition A blend fund is a type of equity mutual fund that includes a mix of value and growth stocks. Mid-Cap Fund Definition A mid-cap fund is a type of investment fund that focuses its investments on companies with a capitalization in the middle range of listed stocks in the market. What Is a Closed-End Fund? A closed-end fund raises capital for investment through a one-time sale of a limited number of shares, which may then be traded on the markets.

Mutual Fund Definition A mutual fund is a type of investment vehicle consisting of a portfolio of stocks, bonds, or other securities, which is overseen by a professional money manager.

What Is Investing? Investing is allocating resources, usually money, with the expectation of earning an income or profit.

Learn how to get started investing with our guide. What Are Liquid Alternatives? Liquid alternatives are a class of mutual funds that use alternative investing strategies similar to hedge funds but with daily liquidity. Partner Links. Related Articles. Investopedia is part of the Dotdash publishing family. Active vs passive mutual funds in the U. Assets under management of U.

Expense ratio of mutual funds in U. Share of professional investors increasing their ESG investments worldwide Investment funds' digital approaches to short term operational resilience Investment funds' governance approaches to short term operational resilience More interesting topics Related topics. Stock Exchanges. Personal savings in the U. Financial markets.

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