An equity fund is just a fund that invests in the stock market; there are different kinds of equity funds to invest in. To effectively select an equity fund which is right for you, it is vital that you must understand these different kinds of equity funds. Some of the different kinds of Equity Fund types found to investors incorporate the income fund, the growth fund, value fund, asset allocation funds, balanced fund, sector fund and an index fund. Moreover, each kind of fund is different from the other in that way it operates & the results it provides. Thus, it is ultimately wise to take an informed decision when it comes to investing in any kind of fund.
Many people expect to invest in the company which demonstrates rapid growth in recent years. For these investors, there will be the growth fund. Growth funds seem to reinvest an adequate amount of their gains for research & development, as well as support investments which are depending upon creating capital gains apart from income.
Value funds tend to invest in value stocks – stocks with companies which are usually older & more established. These kinds of funds seem to be more stable but do not usually reveal the quick movements of growth funds. Another kind of fund investment – the index fund – follows a market index apart from being actively managed. This kind of fund seems to have a low management fee, but also comes with a minimum turnover of securities. Meanwhile, sector funds invest in the specific area of industry like technology funds or gold – and provide high appreciation potential. Moreover, these equity funds seem to pose an extreme risk to the investor.
Another equity investment has to do more with income fund. The income funds concentrate on present income over growth – an objective which can be got be investing with firms that have proven history on dividend payments. The balanced fund deals with investments in bonds for stocks and income for appreciation.