What Is Equity Funds?

Equity fund or stock fund is a mutual fund that invests at equity. If the  mutual fund arrange investors’ money into various share or stock, it called actively managed. On the other hand, if the manager just use index share like S&P 500, it is called passively managed. The manager build a portfolio that contain some benefit stock. We cannot select the stock that we want to invests. The mutual fund also put 4-5 % investor money at fixed income securities to anticipate if a mutual holder withdrawn his or her money immediately.

Equity is the most popular mutual fund because it might give you high return. Off course, you will side with high risk too. It because the stock price is very volatile and it is difficult to predict it.The risk in investing mutual fund is very high. You can loss your money moreover the economic condition is not good.

There are various equity mutual fund such as:

1. Income fund which is oriented with high dividend yield company shares.

2. Growth fund which is invested at Growth company shares. Unlike income fund, this mutual fund orientation is for long term or capital gain. Therefore the growth has higher risk than income mutual fund.

3. Value fund. The manager invests at value stocks

4. Sector fund. There are some benefit sector that attract the investor like technology, dotcom, mining and others.

Some mutual fund company also offer specialized fund like large cap equity, small cap equity, foreign equity, domestic equity, and others.

Like other mutual fund, we can withdrawn equity mutual fund whenever we want. The critical for equity fund is the performance of the manager. Only few mutual fund manager can beat market.

You can buy equity mutual fund at bank or mutual fund company directly. Buy the mutual fund that have good performance and low fee. If you have much money, you can buy various mutual fund. It means you make a portfolio of mutual fund.