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What’s Special About Equity Mutual Funds That You Don’t Find in Other Asset Classes?

Highlights

  • What sets equity mutual funds apart from other investments?
  • Diversification, scope for inflation-adjusted returns win equity funds more brownie points

When it comes to laying a strong financial foundation for the future, equities are preferred by all those having a high risk-taking appetite. Such is the power of equities that help individuals attain their financial goals. But a direct investment in equities may not be useful if you don’t know the nuances of the market. And that’s why you should invest in equities via mutual funds to tick the right boxes. These funds offer scope for potentially higher returns and provide a cushion against the inflation. Fund managers are roped in to manage the portfolio of mutual fund investors. These managers bring all their experiences so that your penny can earn above average over the long term. You can read below the specialties of equity funds in detail.

Specialties of Equity Mutual Funds

Below is the specialties of equity mutual funds that set them apart from their competing products.

Investment Diversification Makes it Appealing

Fund managers choose a wide range of equity instruments to invest the money accumulated in equity funds. This helps diversify your investments by providing a cushion for the fall in one stock with the gain of others. Most other investments lack diversification as they are mostly concentrated in one financial instrument.

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Provides Inflation-adjusted Returns

The inflation is all but a reality and will lessen the value of money over time. Thankfully, the high-return proposition of equity funds can help generate large corpus. This will help help you sail through the increasing inflation. Other investments don’t give returns that can meet the inflationary demands.

Offers a Better Tax Alternative

It is advisable to opt for a batter tax-saving investment. Among the tax-saving options, equity mutual funds have a better alternative in the form of Equity-linked Savings Scheme (ELSS). Let’s check out in the table below as to why it is a better alternative.

Tax-saving AlternativesQuantum of Income Tax Saving (In ₹)Lock-in-periodReturn/Interest Rate
ELSSUp to ₹1.5 Lakh in a Financial Year3 YearsMarket-linked returns
Public Provident Fund (PPF)Up to ₹1.5 Lakh in a Financial Year15 Years7.90% per annum
National Savings Certificate (NSC)Up to ₹1.5 Lakh in a Financial Year5 Years7.90% per annum
Tax Saver Bank Fixed DepositUp to ₹1.5 Lakh in a Financial Year5 Years5.75%-7.50% per annum

Heightens the Possibility of Goal Fulfillment

Fulfilling the long-term goals of wedding and education is a greater possibility with a top-performing equity mutual fund. It happens because of the potentially large corpus the asset class can generate for investors.

Top-performing Equity funds to Invest in

Below is a sorted list of equity mutual funds that you should look to invest the money in.

Equity Mutual FundsRating1-year Return3-year Return5-year Return10-year Return
Axis Bluechip Fund5 Star1.63%13.06%10.91%-
Reliance Large Cap Fund5 Star-7.78%8.07%9.13%11.54%
SBI Bluechip Fund4 Star-4.45%6.03%9.69%11.56%
Franklin India Prima Fund4 Star-11.27%4.05%10.92%15.67%
SBI Focused Equity Fund5 Star-2.24%9.45%11.76%17.40%
Motilal Oswal Multicap 35 Fund
5 Star-7.66%8.37%15.04%-
Axis Focused 25 Fund
5 Star-6.59%12.07%12.69%-
HDFC Small Cap Fund
5 Star-17.40%7.42%10.94%13.05%
SBI Small Cap Fund
5 Star-12.58%10.63%17.67%-
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How to Invest in Equity Mutual Funds?

You can invest in equity mutual funds using any of the Systematic Investment Plan (SIP) or lump sum route. While the SIP allows investment in mutual funds at several periodical intervals – daily, weekly, fortnightly, monthly, quarterly, half-yearly or annually, a lump sum investment is a one-time in the asset class.

How to Invest in Equity Mutual Funds Online?

Wishfin is a premier online marketplace where you can check, compare and choose the best mutual fund schemes on offer. All you need to do is to follow the steps shown below.

  • Go to www.wishfin.com
  • Click on ‘Mutual Funds’
  • Go to ‘Register’
  • Enter your mobile number
  • Click on ‘Get Started’
  • Mention your name, email ID, the city you live in
  • Create a password that conforms to alphabet, numeric and special character requirements
  • Click on ‘Sign Up’
  • Your account will be created so that you can login

After Login

  • Go to ‘Explore Mutual Funds’
  • Click on ‘Equity’ icon
  • A list of equity funds with different ratings, denoted in stars, will flash on the screen
  • Click on ‘Invest’ below any of the top-rated schemes you wish to invest in

Note – The data is sourced from Value Research as on August 26, 2019, and pertains to the regular plan of the schemes shown above.

Disclaimer – “Mutual fund investments are subject to market risks. Please read the scheme document carefully before investing”.