Curious about what is equity mutual fund? Watch the video to find out about the different types of equity mutual funds, and the types of equity mutual funds based on the types of investing. Learn what is value investing based mutual fund and what is a growth investing based mutual fund to decide which type of mutual fund you would like to invest in.
Before we jump right into equity mutual funds, how about we spend a few minutes, understanding the words “Equity Stock” or “Equity Share” - collectively called ‘Equities.’
An Equity stock is nothing but a “Share” of a company.
So what is equity mutual fund? Basically equity funds are those that invest primarily in ‘equity shares or stocks, which are also collectively known as equities’.
Value Style, put simply, is bargain buying. First the equity analyst team or fund manager will assess the business of a company and assign a value to the price per share based on various factors. A value investor will only buy if the current market price of that share is lower than the assessed price. So what is value investing in terms of mutual funds?
There are times in the stock market when investors panic and sell out, making stocks available at low prices. Under-pricing of stocks also occurs when the value of the company is not known, and it’s mis-pricing like this that value investors lookout for. When the others realize the value of the company, they start buying too and the stock prices appreciate, making a person’s investment appreciate with it!
The ‘Growth Style’ investing follows the logic of investing in companies that are likely to continue growing their profits at a reasonable rate. In that case, the fund manager may buy stocks even if they seem fairly priced, because the future growth justifies the current high price.
These aren’t all! There are other ways, in which equity funds can be classified, each with unique characteristics, making it easy for investors to find one that suits their needs.
Explore the various equity mutual funds scheme:
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