With careful management, equity funds – which invest primarily in stocks – can offer significant gains from capital appreciation and dividend income.
Investments in equity mutual funds are made in stocks or equity of companies. Growth in business of the company leads to stock price increase, resulting in capital appreciation for investors.
Equity mutual fund schemes avail you a facility to invest small sums at regular intervals through systematic investment plans (SIP). This also develops a regular habit of investing which is useful in long term wealth creation.
Equity funds have widespread diversification even with a very small initial investment. This means buying stocks of different companies over a period of time across different sectors.
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For Unit Trusts, the value of the units and the income, if any, may fall or rise. Any past performance or projection, prediction or forecast of results is not necessarily indicative of the future or likely performance. The prices of securities within a portfolio may be influenced by political and economic conditions, changes in interest rates, the earnings of the corporations whose securities are comprised in the portfolio, and the market’s perception of the securities.