What is an Equity Fund?
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An equity fund is a mutual fund that invests primarily in stocks. These funds are sometimes referred to as stock funds. Stocks in the fund are selected according to the company size, investment style, and geography of the corporation. Bhalla Insurance investment services can help you diversify your portfolio with life insurance. Bhalla insurance and investment advisor is the best insurance agent in solan.
Types of Equity Funds
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There can be many different equity funds that are good for investing. The choice that you make would depend on the type of objectives that you need to meet, the level of risk you’re comfortable with, and the amount of time you’ll be investing for. You may contact with best insurance agent in solan for any further query.
1. Large Cap Funds
Large-cap mutual funds invest a maximum of 80% of their assets in equity shares of large-cap companies (TOP 100 COMPANIES IN TERMS OF MARKET CAPITALIZATION). The funds invest in well-established companies with a track record. These funds are capable of providing modest returns and are relatively less volatile compared to mid-cap and small-cap funds. Large Cap Fund is the best insurance agent in solan.
2. Mid Cap Funds
Mid-cap funds invest at least 65% of their assets in equity shares of mid-cap companies (those with a market capitalization between $100 million-$250 million). They are less stable than large-cap funds but offer the potential for greater returns.
3. Large and Mid Cap Funds
Although the concept of investment is the same, the way Indian Mutual Funds management works are entirely different from an institution outside the nation. Indian mutual funds mostly invest in stocks and bonds listed on the domestic stock exchanges and mostly follow a passive management strategy, while international mutual funds mostly focus on looking for investments in other regions as well. If you want to know more about investment contact with bhalla insurance and investment advisor. Bhalla insurance is the best insurance agent in solan.
4. Small Cap Funds
Small-cap mutual funds invest at least 65% of their assets in equities of companies having a market capitalization of more than 25 million US dollars. These funds tend to provide higher returns than large-cap and mid-cap funds but are more affected by market movements than them.
5. Multi Cap Funds*
Many fund houses offer a Multi Cap fund which invests across different capitalization segments. This allows the asset management company to build a diversified portfolio of multi-segment stocks.
**As per SEBI Circular No. SEBI/HO/IMD/DF3/CIR/P/2020/172 dated September 11, 2020, Multi Cap funds are mandated to invest in large-cap, mid-cap, and small-cap companies. Investors should consult a financial/investment advisor prior to investing. Go and visit the best insurance agent in Solan to understand in detail the types of equity funds.
The tax advantage of equity funds
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Apart from being a great way of creating wealth, Equity Mutual Funds also offer great tax benefits. Short-term capital gains in these funds (capital gains made in less than 12 months) are taxed at 15%, while long-term capital gains (more than 12 months) are tax-free. If your capital gain is above Rs. 1 Lakh, then you will be levied a tax of 10%. This makes Equity Funds one of the best tax-efficient investments. Contact us if you require more information – the best insurance agent in Solan, Himachal Pradesh. Bhalla insurance is the best insurance agent in Solan.
In conclusion
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If you have a higher risk appetite and are looking to achieve higher returns, an equity fund is a good option for you. However, you also need to be mindful of the risks that it brings with it. The best way to maximize out of investing in equity mutual funds is by staying invested for as long as you can with a minimum period of 3-5 years. Visit the best insurance agent in solan to know more about equity funds.
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