Types of Equity Funds You Can Invest Your Money

For those acquainted with the share market and the stock market, equity funds are a common and popular way of investing money. Equity funds offer good returns if you are willing to take risks. Experts advise investors to gather information and know the risk factors before investing in any equity funds.

There are different types of equity funds:

1. Large Cap Funds

Large-cap funds are for those who want to invest a significant sum. Established and experienced companies or individuals usually make this investment. The investment is made on the top companies or brands which have stability in the market.  It is also an excellent choice for new investors the risk is comparatively low. This is because the companies in which you invest are already well known and have a substantial presence in the market and actual revenue rate. But the large-cap funds offer lower growth rate and lower return to the investors.

It has a higher rate of secondary private equity liquidity rate. These funds are often followed by investors and have a steady investor base.

2. Mid-Cap Funds

This is a type of equity fund in which investment is made on companies of medium scale, which means you get to invest in companies which gave medium market capitalization. These liquidity for Private equity funds are great if you have gained a little experience and are willing to take higher risks. Mid-cap funds have a better scope of growth rate and can offer you good returns.
This type of equity funds are rare now popular among investors. It is because they have a broader scope of return and are great for both professional and small-time investors. Institutional investors often prefer mid-cap equity funds because of the higher liquidity rate for private equity funds.

3. Small-Cap Equity Funds

These funds are for experienced investors. The investment is made for companies that have a maximum capitalization of 500 crore INR.  These funds have higher risk but offer excellent returns. As institutional investors generally ignore small-cap equity funds, it has more significant opportunities.  

4.  Balanced Funds

It is a type of diversified mutual funds. This type of equity fund has the perfect harmony between the risk, investment and returns. Balanced funds are among the accessible mutual funds.

5.  Sector Mutual Funds

This type of equity fund has a particular investment sector. For example, the pharmaceutical companies, the PSU organizations, the banking institutions etc. Sector mutual funds are a little volatile and have a higher risk rate. But, the return rate can be predicted. If an industry performs well, then the corresponding sector mutual funds will offer better returns.

6.  Equity-Linked Savings Scheme Or ELSS

Equity-linked savings scheme is a tax saving mutual fund investment. If you want to gain long term capital appreciation, then less is better for you. But fewer equity funds have higher risk potential.

These are some of the joint and well-known equity funds which you can consider for investing your money.  If you feel confused, then ask guidance and recommendation from an expert to find the ideal equity funds for you.