Equity Based Funds

By: EconomyWatch   Date: 23 November 2010

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Equity based funds can be referred to as the share an individual has in a particular corporate house. The shares of stock implies a portion of the corporate house.

Equity based funds can contain several selectively chosen stocks. An equity based funds manager takes care of the stocks.

The aim of the equity based funds manager is to choose those stocks which have the capability of achieving the equity based funds objectives.

The objectives of equity based funds can be of capital appreciation, return as a whole , growth for a long term.

There are times when a stock in conjunction with equity based funds may provide income along with growth.

Equity based funds can be considered as performers. The equity based funds have the disadvantage of being highly volatile as compared to cash and bonds.

The equity based funds are diverse and offers a variety of stocks. The equity based funds are volatile, the price of their shares fluctuating very frequently daily.

Equity based funds are also affected by factors like 

  • Changes in the rates of interest.
  • Changes in the economy
  • Changes in the functioning or working of a company.

Equity based funds provide rewards on a long term basis.

Rewards offered by equity based funds on a long term basis may include retirement solutions, purchasing a house or funding a child's education.

As equity based funds involve considerable amount of risk it is often suggested that equity based funds need to be clubbed with investments involving lower risks for availing long term benefits.

Types of equity based funds:

Equity based funds can be categorized into:

  • Sector equity based funds and International equities
    Equity based funds under the category of sector equity based funds and international equities may include the undermentioned:

      1. Technology equity based funds.
      2. International Growth equity based Fund

    • Medium and Small Capitalization Equity based Funds

      The medium and small capitalization equity based funds may include the following:

        1. Small Cap Growth equity based Funds
        2. Small Cap Value equity based Funds
        3. Growth Opportunities equity based Funds
        4. Small Cap Index equity based Funds
        5. Mid Cap Growth equity based Funds

        Large and Income Capitalization Equity based Funds

        The equity based funds under the category of Large and Income Capitalization Equity based Funds may include the types of equity based funds given below:

          1. Large Cap Value equity based Funds
          2. Select Equity equity based Funds
          3. Growth Equity equity based Funds
          4. Income Equity equity based Funds
          5. Stock Index equity based Funds

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