An equity fund is a type of investment fund that invests in stocks and other equity securities. It differs from a money or bond fund, which invests in other assets such as cash. The main difference between these types of funds is that stocks make up the bulk of the assets, whereas cash funds generally invest in small amounts of cash.
To invest in an equity fund, you should know its objectives, risk profile, asset allocation, and investment strategy. You should also understand the expense ratio of the fund, which may impact the returns. Equity funds typically have higher expenses, but are more likely to provide higher returns. If you don’t know much about mutual funds, you should look up some basics about these types of funds. You can use this information to select an equity fund that meets your needs and investment objectives.
The goal of an equity fund is to increase its value. This is done by buying stocks with a high potential for growth. You can select a mid-cap or small-cap fund, depending on your risk tolerance and goals. Mid-cap funds target companies that are between $2 billion and $10 billion in value. These funds are generally smaller than large-cap funds, but still offer good growth potential.
An equity fund can focus on different industries or focus on one particular industry. It can also be passively or actively managed. The objective is to earn a return that matches or exceeds that of the overall equity market.