Equity funds concentrate their investment in equity shares.
The various kinds of equity funds are given below :
In this the investment is mainly done in equity stocks of companies. The main objective is long term capital appreciation. High expected growth and risk go hand in hand. The dividend payout is minimal as companies reinvest its earnings for expansion.
As the name suggests they are funds that invest in mid-cap companies. These funds share similarities with aggressive growth funds.
Investment of these funds is mainly in equity stocks whose current valuation does not reflect some of the underlying proposition.
Equity funds are the funds with the objective to provide a more portion of total return through income and primarily invest in stocks that yield above the average. The yield is referred to as dividend yield.
Index funds are portfolio of securities which have been specifically designed to represent the characteristics and attributes of a chosen target index. A fully replicated index fund is one which has all the stocks in the same proportion.
These are the funds wherein the investment is done in specific sector such as FMCG, petroleum, telecom, IT, Pharma, etc. They have limited diversification, with relatively narrow range. The risk is more in this fund.
Government Securities fund (Gilt Funds) invests in securities issued by the Government of India and/or the state governments. In this income is generated through coupon repayments. These securities are usually free of credit risk.
These funds are designed to address the need for liquidity in current accounts. The investment is in the ultra short term instruments – below 91 days. Corporate invests predominantly in these funds.
Invest are mainly done as a mix of equity and debt. The objective behind is to have moderate capital appreciation and preservation of capital.
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