It is often said that initiation is the toughest part of any process, and when it comes to managing your hard-earned money it is even more so. With so many options to choose from, we often are scared to take the first step. Because we don’t often know where to begin. In this post, we will discuss the various types of equity mutual funds.
The first jargon you hear when you embark on your investment journey is “Mutual Funds” and for all the right reasons, as they are one of the most flexible investment instruments one can use to diversify their portfolio and in some cases even save taxes.
A basic categorization of Mutual Fund Schemes would look like this [as per SEBI]:
- Equity-Linked Schemes
- Fixed income or debt Schemes
- Hybrid Schemes
- Solution-Oriented Schemes
- Other Schemes
Let’s now dig deeper into the different types of Equity Mutual Funds
What are equity mutual funds?
Equity Mutual Funds park their major investments in equity and equity-related instruments in an attempt to get you higher returns and thus being one of the riskier forms of all the available mutual fund schemes in the market. For people having long-term wealth creation as their major investment goal, equity-linked mutual funds are their go-to mutual fund scheme.
Types of Equity Mutual Funds
Before we understand that, let’s quickly see what the following terms mean:
- Large-cap: 1st 100 company based on market capitalization.
- Mid-cap: 101st – 250th company based on market capitalization
- Small-cap: Beyond the 250th company based on market capitalization
Note: A mutual fund house can either offer a Value fund or a Contra fund but not both.
Conclusion
With so many schemes to choose from, it may become difficult for you to begin your investment journey. That’s why maybe it’s time for you to take the back seat and let us handle your corpus with the help of our experts here at Daulat. Our team follows a disciplined investing approach that takes into account multiple factors to design portfolios suited to your needs.
