Basics of Equity Mutual Funds

🔹 Professional Management

Fund managers with extensive experience actively manage the schemes’ corpus. With the intention of maximizing investors' returns, they conduct research, examine market trends, and make investment decisions.

Different Types of Equity Mutual Funds

Risks and Returns

Equity funds are riskier when compared to debt or hybrid funds as a significant amount of the corpus is invested in stocks and related products. However, over the long term, these funds potentially deliver higher returns in comparison to other types of mutual funds.

Net Asset Value (NAV)

The price of every unit held by equity mutual fund investors is known as the Net Asset Value. NAV is derived by dividing the total value of the fund corpus by the number of outstanding units.

Entry and Exit Load

Some mutual fund schemes might levy an exit load in the event that investors redeem their units within a predetermined period. Investors ought to likewise know about the expense ratio, which addresses the yearly charges and costs as a percentage of the fund's average value.

Tax Repercussions

Capital gains tax applies to gains from equity mutual funds. The tax rates depend on the holding period and the type of gains, which can either be short-term or long-term.

Market Risk

Market conditions, economic factors, and the stock market's overall performance all have an impact on the performance of equity mutual funds.

It is essential for investors to evaluate their risk tolerance, financial objectives, and investment time horizon prior to investing in equity mutual funds. It is recommended to seek guidance from professional experts if necessary to make an informed investment decision.