A mutual fund scheme is a systematic financial plan or arrangement with an investment objective.
An equity mutual fund is a mutual fund which invests primarily in the stocks of a company (equity holdings).The structure of this type of fund may vary for different schemes. They are sub- classified depending on their investment objective:
- Diversified Equity Funds: A diversified equity fund is an equity fund where the fund is investing in companies from a broad range of sectors. For instance: energy, financial health care, or any other sector – all in one fund. However, it may also mean a number of different companies all in one sector i.e. just bio-tech stocks.
- Small & Mid-Cap Funds: Small-Cap funds invest the equity funds in small size companies, whereas mid-cap funds invest in medium sized companies. Mid-cap funds tend to offer more growth than large-cap stocks and less volatility than the small cap segment.
- Sector Specific Funds: Theseare funds whichinvest the securities/equity funds in securities of only those sectors or industries as specified in the offer documents. E.g. Pharmaceuticals, Petroleum stocks, Software, Fast Moving Consumer Goods (FMCG), etc. The returns for these funds are dependent on the performance of the respective sectors/industries.
- Tax Savings Funds (ELSS): These type of funds offer tax rebates to the investors. This is included under the tax laws that are prescribed from time to time. (Contributions made to any Equity Linked Savings Scheme (ELSS) are eligible for rebate under Sec.88 of the Income Tax Act)
Any type of equity investment is meant for a long term horizon and rank high on risk-return matric.
There are different mutual funds available in the market to suit your own style; some with low amount of risk, others with higher amount of risk; some with lower returns, while others with higher returns.
In India there are 33 different types of mutual funds and approximately over 400 different mutual fund schemes.
India has different types of funds, namely; income fund, balanced fun, sector funds and growth funds.
Besides that, there are different types of plans that a mutual fund scheme offers. They include a dividend plan, a reinvestment plan and a growth plan.
Sebi- the approved Asset Management Company (AMC) manages the funds available in the market and formulates and regulates the mutual funds.
An equity fund is a type of mutual fund which primarily invests in stocks. Also known as a stock fund, an equity fund invests money in equities, which may be either actively or passively managed.
This differentiates it from those funds which may invest in bonds or any other strategy.
Some of the best equity funds to buy in India include:
1. Birla Sun Life Frontline Equity Fund
2. Birla Sun Life Top 100 Fund (G)
3. Franklin India Bluechip Fund (G)
4. ICICI Prudential Focused Bluechip Equity Fund (G)
5. UTI Opportunities Fund (G)
On the other hand, an equity scheme is also a systematic financial plan to provide financial/capital growth by investing in equity funds and other equity related instruments offered by different companies –over short or long terms. Different companies in India offer different schemes.
DSP BlackRock offers a variety of equity funds and equity schemes. Some of them include:
1. DSP BlackRock Equity Fund
2. DSP BlackRock Focus 25 Fund
3. DSP BlackRock India T.I.G.E.R. Fund (The Infrastructure Growth and Economic Reforms Fund)
4. DSP BlackRock Micro Cap Fund
5. DSP BlackRock Natural Resources and New Energy Fund
6. DSP BlackRock Opportunities Fund
7. DSP BlackRock Small & Midcap Fund
8. DSP BlackRock Tax Saver Fund
9. DSP BlackRock Technology.com Fund
10. DSP BlackRock Top 100 Equity Fund
Some of the tops companies for equity funds and schemes include DSP BlackRock Mutual Funds, Reliance Industries, HDFC Bank, Infosys and ICICI Bank.