Equity Mutual Funds – High Risk but High Returns
Equity funds (Equity oriented Mutual Funds), Long-term funds also known as Stock funds because, in these funds, the full amount is invested in the stocks to provide high returns but with high risks.
These funds invest principally in stocks and managed actively or passively [index fund].
Equity Mutual funds are also further divided into purely small-cap/mid-caps/large-caps funds
Investing in equity mutual funds is best for long-term goals like investing for retirement, children’s wedding, our house, own marriage or other long-term goals.
To check, how much to invest in order to achieve the future goal you can also use Equity funds calculator provided by many companies to check and accordingly you can plan the amount to start with.
There’s no lock-in period for the investment, the investment can be withdrawn any time but if redeemed before a certain period an exit load is deducted set by the mutual fund company.
Investing in SIP:
Monthly SIP [Systematic Investment Plan] is just a way of automatically investing the money on a monthly basis in the selected scheme, in a disciplined manner.
An investor can invest in mutual funds taking the SIP route for a year or two years.
As suggested by many advisors it’s safe to invest if you plan to keep your investment untouched for a minimum period of 5 years
Why invest in Equity Mutual Funds:
- Equity Mutual funds are a good investment option for small investors.
- Potential to generate High Returns on investment when compared to the other mutual funds.
- Ideal investment for long term horizon, like investing for retirement, children’s wedding, our house, own marriage or other long-term goals.
- There’s no lock-in a period like ELSS funds and can be withdrawn any time but if redeemed before certain let’s say within a year then around 1-2% exit load depending on companies, if after 1 year then no exit charges.
Let’s compare Equity Funds VS Debt funds:
- The risk is high in Equity fund but low in case of debt funds.
- Returns are high in equity funds but low in case of debt funds.
There are many mutual fund companies providing different types of equity funds, equity funds India to invest in.
Top 5 Best Equity Funds in India: (Source: Cleartax)
|Axis Focus 25 Fund||18.60%|
|ICICI Prudential US Bluechip Equity Fund||18.18%|
|Axis Bluechip Fund||16.96%|
|Aditya Birla Sun Life Banking & Financial Service Fund||16.44%|
|SBI Banking & Financial Service Fund||16.29%|
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