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Market & Equity Funds

There are a number of plus points in favour of equity funds

Please explain the equity funds’ positives versus the markets?

If you invest in an equity fund, its performance is completely dependent on the markets. It depends on how much money your fund manager has invested in the markets and in what kind of shares. A mutual fund unit changes everyday on those days when the markets are open, just like stocks. So, it is very much related to the markets.

The positive of investing in a mutual fund industry is that it always lessens your risk as it has a diversified portfolio. If you buy a share of a company, then the returns depend on that company’s performance or the change in the price of its share. When you invest in a fund, its portfolio contains a lot of companies’ stocks, some of which rise, others fall, while there is no change in some. Due to this, the risk factor lessens which is an advantageous thing for an investor.

You should also not expect any fixed income from mutual funds. If fixed income is your target, banks are your option.

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