5 Benefits of investing in Equity Mutual Funds

Published : 19 Apr 2023

Equity funds can give higher returns in comparison to other financial instruments in order to beat inflation. The investors of these funds will earn profits as and when prices of stocks increase. Investors can grow their wealth by investing long-term in equity funds.

1.  Wealth Creation

Equity funds are cost-efficient as you can invest in multiple companies through these funds with very little capital. Investments in equity mutual funds can be done of as little as Rs. 500 per month through a Systematic Investment Plan (SIP).

2.  Cost-Efficient

Since equity funds are a pool of many stocks, there are chances that some stocks may not perform while some might perform exceptional well. Investors have the benefit of earning profits despite some laggards. The main aim of this would be mitigating risk of losing capital.

3.  Portfolio Diversification 

Investors can enjoy tax benefits by investing in equity-linked funds known as ELSS. These funds come with a lock-in period of 3 years, hence only long-term capital gains tax would be applicable for any gains made above 1 lakh, while gains made below 1 lakh are tax-free. Also, investors can get a tax rebate of up to Rs.1.5 lakh from their taxable income, further reduce their tax liabilities.

4.  Tax benefits

Equity Mutual funds are professionally managed by fund managers and analysts who have the experience and expertise in investment management. Various stocks and market trends are researched and analyzed before any additions or deletions are made. They aim to outperform the market and generate superior returns than the market indices for their investors.

5. Professionally managed

Check 5 Equity Mutual Funds details here: 

HDFC Balanced Advantage fund

AUM: 4,18,852 Cr | NAV: ₹345.7 | Minimum SIP amount: ₹100 |  3 Years Returns: 31.8%

SBI Small Cap Fund

AUM: 6,48,640 Cr | NAV: ₹122.6 | Minimum SIP amount: ₹500 |  3 Years Returns: 40.9%

Parag Parikh Flexi Cap Fund

AUM: 33,715 Cr | NAV: ₹53.7 | Minimum SIP amount: ₹1,000 |  3 Years Returns: 35.9%

Mirae Asset Large Cap fund

AUM: 1,18,065 Cr | NAV: ₹85.5 | Minimum SIP amount: ₹1,000 |  3 Years Returns: 29.8%

Kotak Equity Opportunity Fund

AUM: 2,83,896 Cr | NAV: ₹228.8 | Minimum SIP amount: ₹500 |  3 Years Returns: 33.0%