How Equity Savings Funds are Perfect for First-Time MF Investors?
Equity mutual funds focus on generating returns by investing in stocks of companies that are publicly listed in various market capitalizations. According to SEBI norms, this fund invests at least 65% of the capital in equity and equity securities, and the remaining 35% is invested in debt securities or money-market instruments.
Different equity mutual funds can give different returns based on factors like the mix of investments in the fund, market conditions, how long you invest, and the level of risk.
Who Should Invest in Equity Funds?
Investors with a high to moderate risk appetite can invest in equity mutual funds. The top-rated equity mutual fund can have volatility and price fluctuations in the short term.
Investors who are not able to invest in these funds because of not having enough capital, in this case, can start small even with the amount of Rs. 100.
Equity funds, mainly the ELSS funds, are beneficial for those investors who want to use the benefit of tax-saving and long-term wealth creation. They also allow the investors to save taxes with the long-term wealth creation and tax-saving benefits. The investors are allowed to save taxes with the tax-saving benefits of Section 80C of the Income Tax Act 1961. Investors can reduce their taxable income by investing Rs.1.5 lakhs in equity mutual funds.
Long-term equity mutual funds are well suited for investors because their returns can be volatile in the short term. This fund can deliver positive results over a long period.
Most inexperienced or new investors want to invest in the stock market, but they are unable to invest because they don’t have the crucial knowledge to select the appropriate stocks. Equity mutual funds provide new investors an opportunity to invest in stocks. And the funds are handled by experienced professionals who select the best stocks on your behalf.
