The key objective of making any kind of investment is to earn significant returns on it and grow your wealth over time. Returns on investment can either be fixed or market-linked. There are various types of investment products under different investment categories available to investors. For instance, direct equity investments like mutual fund investments or stocks are examples of market-linked investments whereas post office time deposits or fixed deposits are popular investment products that offer fixed returns.
But, what is equity fund? An equity fund, a type of mutual fund buys ownerships os shares of various business that are traded publicly. Equity mutual funds are ideal for those individuals who wish to participate in the rally of the equity markets. These funds try to generate substantially high returns by investing in various stocks of companies spread across all market capitalisations. The performance of the company whose shares are bought plays a major role in deciding the returns earned by investors.
How to invest in equity funds?
There are several options available to investors. You can invest in equity funds by submitting a duly filled application form along with a cheque or a bank draft. You can send this application form to the registrars such as Computer Age Management Services (CAMS) or designated Investor Services Centres (ISC) or the respective Asset Management Company (AMC) along with the required documents. This is known as the offline method of investing in mutual funds. Alternatively, you can even invest via your bank if they provide such services.
You can invest in mutual funds online through the websites of respective mutual fund houses or through their apps. Further, you also have the option to invest in mutual funds directly through the CAMS website – a mutual fund transfer agency registered with the governing body of all AMCs – Association of Mutual Funds in India (AMFI). This option is ideal if you as an investor are well-versed with mutual funds. This basically means that you are taking care of your finances and investments without the help or services of any third-party.
Equity mutual funds are certainly less risky than investing directly in the stock markets and come with a host of benefits. While investing in equity funds, the aim should be to invest in mutual funds systematically over a long tenure. Investments in equities should be linked to meet your long-term financial goals. Hence, invest wisely in funds that provide stability to your portfolio. Don’t forget to factor in your personal and financial goals, your risk profile, and your investment horizon before zeroing in your investments. Happy investing!