Portfolio Classification Across Mutual Fund classes


Equity Funds:

Funds which invests in stock represent the equity funds and these are largest category of the mutual funds. Equity funds normally invests most of the corpus in equities. Corpus is the total amount of money being invested by all investors in a financial scheme.

As investor if you’re investing into the equity funds then it will require a lot of patience. Equity funds takes a medium to ling term for the good appreciation. Equity funds are also known for the high-risk funds in the mutual fund market.

Equity funds are mostly invested into the stocks but their main motive is long term capital gain. Basically, mutually funds are invested into the different categories of the stocks lets understand those categories in detail so that equity funds will be easier to understand.

Growth Stock: Live market never affect stock price which comes under growth stock category.

Value Stock: These stocks come under the category of the highly traded stocks. Traders always stay focussed on the stocks who comes under the value stock category.

Momentum Stocks: Name itself attracts day trader to this category. These stocks usually go up and down with the market hence denoted as the momentum stocks.

Equity funds are ideally invested most of the corpus in all above segment. The main thing to consider here is, as investor if you are putting your money into the equity funds or the mutual funds which invests money into the stocks then the price of the unit will go either up or down with respect to the price of the stock that fund is focussed on.

Equity Funds & Investors Financial Goal:

Equity fund itself vary from type to type. You may find the numerous types of equity funds. This type depends upon the what proportion fund manager is investing money to where. Being investor, it is utmost important for you to look at the funds top 10 holdings to cross check if the particular fund best suits you.

Investors financial goal is to put money for medium to long term so that it can give the maximum returns. If you’re investing into the blue-chip equity funds then you must check to determine if the holdings are truly blue chip. Blue chip mutual funds invest funds into the well-known and good reputed companies.

Equity Funds Further Classification:

Diversification Based Funds:

These are the type of fund, where more than 70% of amount is invested into the diversified equities. But it is also mandate to invest the small portion of  the corpus in debt and cash, This type of funds are completely managed by the fund managers, they do the research and based on the market environment, whether condition, political impact they adjust the portfolio and vary the proportion.

Dividend Based Funds:

The main objective of this type of mutual fund investment is to gain the fix, steady income in the form of dividend from the investment. Here investment is being done in to those companies which pay high return in the form of dividend.

Index Based Funds:

These are the least favorite fund types, where investment is done in stock indices rather than particular stocks. Biggest and most famous fund in the United States of America is the SPY that tracks the popular S&P 500 index.

Sector Based Fund:

These mutual funds restrict themselves to the particular sector only. More than 60% corpus is invested into the sector specific area like IT, FMCG, Energy, Infra, Pharma etc. As these are concentrated on particular sector this type of funds can generate the tremendous gain or losses.


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