Witnessing a bull run in stock market, most of us are tempted to test the waters, but shy away due to risk involved. For beginners, equity funds may an excellent investment option.
It allows the investor to invest in share market by using the expertise of the qualified and professional fund managers who primarily deal in equity investments, as per IIFL.
According to IIFL, equity fund or stock funds is a type of mutual fund that invests primarily in stocks or equities. It deals with shares of public limited companies.
Equity funds are generally classified by size, investing style, market capitalization, and geographical location.
People with professional expertise manage equity funds, and another significant advantage of this resource is that they are available for every type of investor, according to the report.
Here are some of the ways of investing in equity funds, according to IIFL.
The technique of lump sum investment
An investor who has a lump sum amount of money, some extra fund or the fund acquired after retirement can be invested in equity funds.
Systematic Investment Plan (SIP)
SIP is the most favoured method while investing in a mutual fund as this helps an investor to build a corpus in discipline and hassle-free manner. The main advantage of SIP is that it can be started even with a small amount and inculcates investing discipline.
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