Types of Equity Funds

Equity, Debt & Balanced/Hybrid Funds

Equity funds invest primarily in stocks with some cash allocation – 0 to 10%. Debt funds invest in bond papers of varying maturities – 6 months to 20 years, depending on the type, i.e. short-term or long-term debt fund. Balanced and hybrid funds have a mix of both equity and debt.

For Illustration

SBI BlueChip Fund (Equity Fund)

Launch date - Feb 14, 2006
Return since launch - 11.70%
Fund Manager - Sohini Andani
Trailing Returns (%) 1-Y 3-Y 5-Y 7-Y 10-Y
Fund 18.9 18.39 21.5 14.82 11.28
Category 22.26 12.58 16.38 11.67 9.92

ICICI Pru Balanced Fund (Balanced Fund)

Launch date - Nov 03, 1999
Returns since launch - 15.06%
Fund Manager - Sankaran Naren, Manish Banthia
Trailing Returns (%) 1-Y 3-Y 5-Y 7-Y 10-Y
Fund 26.21 17.57 20.13 16.32 12.50
Category 17.34 14.97 16.81 12.25 10.91

Large-cap Fund

Typically, large cap funds invest in top 100 stocks, as per the market capitalization. These are the most liquid, big companies, possibly market leaders in their respective sectors. Certain funds may maintain sector weights similar to market indices – CNX Nifty or S&P BSE 100, whereas, others may be sector agnostic and just pick up the best large cap companies out of the available universe.

Mid-cap Fund

Mid cap funds invest in emerging companies with market capitalization that is lower than large caps. Since these companies are not often tracked by market analysts, small and mid cap stocks require more research and in-depth analysis to identify the best from the rest. Since mid cap funds are hit more than large caps during market downturn, you need to have a long-term horizon for superior risk adjusted returns.

Small/micro-cap Fund

Small/micro funds invest in small companies with market capitalization that is lower than mid caps. Small cap funds are also hit the most during market downturn, you need to have a long-term horizon for superior risk adjusted returns.

ELSS

Equity linked savings schemes are diversified equity funds that have a 3-year lock in period. These funds offer tax benefits under section 80C of Income Tax Act.

More

Have Referral Code?