What are the types of equity mutual funds?

First, let’s know what equity mutual funds are.

In simple words, Equity mutual funds are the riskiest type of mutual funds, which is why they have the potential to result in greater returns than debt and hybrid funds. If you have a good risk appetite, invest in equity mutual funds to garner a substantial corpus for the future.

Let’s know the types:

Large-cap funds: This type of equity fund invests 80% of the asset in equity shares of large-cap companies. Such funds offer more stability than mid and small-cap funds.

Mid-cap funds: You invest 65% of equity assets in mid-cap stocks, ranked between 101 and 250 in terms of market capitalization. Such funds offer better returns than large-cap funds but are volatile.

Large & mid-cap funds: The assets are invested in an equal proportion, with 35% in large-cap and 35% in mid-cap companies. This offers you the benefit of lower risk and better returns on investment.

Small-cap funds: You allocate 65% of assets to small-cap stocks. Such funds are ranked below 251 in terms of market capitalization. This offers you higher returns on investment but is highly volatile.

Multi-cap funds: You invest 65% of assets in equity and equity-related instruments across large-cap, mid-cap, and small-cap in varying proportions.

ELSS or tax-saving funds: ELSS or Equity Linked Savings Scheme is an equity mutual fund that comes with a tax-saving option and three years lock-in period.

For more information on investment assets, you can rely on Future Value, a pool of financial experts that can guide you through this and help you in your investment journey.

How can you grow your financial wealth?

A higher-paying job or a windfall from a relative doesn’t make you rich. Most people can achieve financial goals through better money management, which can help them reduce their spending, invest and save better, and achieve their goals faster.

Track your expenses: Your personal spending habits may need improvement if you don’t know how and where you spend every month.

Go for a realistic Budget: Establish a budget that you know you will be able to keep by looking at your monthly spending habits as well as your monthly income. Ensure that your budget is tailored to your lifestyle and spending habits. 

Pool in an emergency fund: Make an emergency fund that you can access in case of unforeseen circumstances. Even small contributions can help you avoid risky financial situations.

Timely payment of bills: When you pay your bills on time, you will avoid late fees and prioritize essential spending. It is an easy way to manage your money wisely.

Cancel the recurring charges:  Many of us forget about the monthly subscription fees we pay to online streaming services and mobile applications we don’t use every day. Consider canceling them to save your money.

For more insightful financial tips,  you can rely on Future Value, a pool of financial experts.