Equity fund

Equity fund

Equity funds are riskier than bond and money market funds, but they have the potential to generate higher returns. Over the long term, equity funds have outperformed other types of investments. However, equity funds are subject to market volatility, and their value can go down in the short term.  

Investors interested in equity funds should consider their investment goals and risk tolerance. Growth and value funds may be appropriate for investors looking for capital appreciation; but index funds may be suitable for investors tracking the overall market’s performance. 

What is an equity fund? 

A mutual fund that invests in equities is called an equity fund. Growth, value, and index equity funds can be generally divided into these three groups. Stocks of businesses that are anticipated to rise faster than the market as a whole are purchased by growth funds. Value funds buy stocks of businesses that the market believes to be undervalued. Index funds follow a particular market index, such as the S&P 500.  

Equity funds make investing easier by collecting investor money into a single fund and investing it in various companies. The equity funds gather the returns from companies in the form of dividends and earnings and distribute them to the investors. 

Types of equity funds 

Many different equity funds are available to investors, each with unique investment objectives and strategies. The most common types of equity funds are growth funds, value funds, and index funds.   

  • Growth funds 

Investments by growth funds are made in businesses that are anticipated to develop faster than average. 

  • Value funds  

Value funds make investments in businesses that the market has undervalued. 

  • Index funds 

Index funds offer exposure to the underlying assets in an index by tracking that index, such as the S&P 500. 

Equity fund

Benefits of equity fund 

Investing in equity funds has several benefits for investors. Most importantly, equity funds can provide investors with the potential for significant capital growth. Stocks and shares have a history of outperforming other asset classes like cash and bonds over the long term, so investing in an equity fund may help you increase your wealth. 

In addition to capital growth, equity funds can also offer investors a degree of income. Many equity funds pay out regular dividends, providing investors with a source of income to supplement any other investments they may have. This can be particularly useful for retirees looking to generate an income from their investments. 

Another benefit of equity funds is that they can offer greater diversification than investing in individual stocks and shares. Investing in a fund allows you to receive exposure to a wider range of companies and sectors, which can help reduce your investment portfolio’s overall risk. 

So, investing in an equity fund can offer investors several benefits. If you want to expand your wealth and produce income from your assets, an equity fund might be suitable. 

How does an equity fund work? 

Equity funds can be a good way to diversify your investment portfolio. They can also offer the potential for higher returns than other types of investments, such as bonds and CDs. However, equity funds also come with higher risks, so it’s important to consider your goals and risk tolerance before investing. 

Professional money managers manage equity funds. And they use a variety of investment strategies to achieve their investment objectives. Equity funds are subject to market risk, the risk that the price of the securities in the fund will decline. 

Features of equity fund 

There are several types of equity funds, each with its features and investment objectives. However, all equity funds share some common features.  

Firstly, they all invest in equity securities, which are shares of stock in public companies. Active management and passive management are both options for equity funds. Actively managed equity funds are those where the fund manager decides which stocks to buy and sell to beat the market. Equity funds that are passively managed follow a particular market index, such as the S&P 500, without the need for active management. 

Equity funds typically charge higher fees than other investment funds due to the higher risk involved in investing in stocks. Over the long run, they may also produce better returns. For this reason, equity funds are often a key component of many investors’ portfolios. 

Frequently Asked Questions

You should consider a few factors before investing in an equity mutual fund. The most important thing is to ensure you are at ease with the hazards. Being ready for the ups and downs is essential when investing in equity mutual funds, which can be highly volatile. 

There are several benefits to investing in an equity mutual fund. One of the key benefits is that it offers diversification across several different stocks, which can help to mitigate risk.  

Equity mutual funds offer higher potential returns than other types of investments, making them an attractive option for investors looking to grow their portfolios. Another benefit of investing in an equity mutual fund is that they are typically managed by experienced professionals, which can help to reduce risk further. 

Investors with a longer investing outlook and a higher risk tolerance are best suited for equity mutual funds. While they do have the potential to generate higher returns than other types of investments, they also come with higher risks. As such, they are only suitable for some.  

Before investing in equity mutual funds, you should carefully consider your investment goals, risk tolerance, and time horizon. If you are not comfortable with the risks involved, you should invest in other investments. 

 

    Read the Latest Market Journal

    Weekly Updates 26/2/24 – 1/3/24

    Published on Feb 28, 2024 47 

    This weekly update is designed to help you stay informed and relate economic and company...

    All-in-One Guide to Investing in China via ETFs

    Published on Feb 27, 2024 225 

    Start trading on POEMS! Open a free account here! Why China? In the vast landscape...

    Navigating the Post-Inflation Landscape in 2024: Top 10 US Markets Key Events to Look out for

    Published on Feb 23, 2024 275 

    Start trading on POEMS! Open a free account here! In 2023, the United States experienced...

    From Boom to Bust: Lessons from the Barings Bank Collapse

    Published on Feb 23, 2024 60 

    Barings Bank was one of the oldest merchant banks in England with a long history...

    Decoding FX CFD 2.0

    Published on Feb 20, 2024 66 

    This article is aimed at availing information and knowledge essential to intermediate forex traders. It...

    Weekly Updates 19/2/24 – 23/2/24

    Published on Feb 19, 2024 89 

    This weekly update is designed to help you stay informed and relate economic and company...

    Unlock Prosperity with 5 Sure-Fire Financial Instruments!

    Published on Feb 14, 2024 197 

    In Singapore, the concept of guaranteed returns may evoke the spirit of prosperity, reminiscent perhaps...

    Weekly Updates 12/2/24 –16/2/24

    Published on Feb 13, 2024 70 

    This weekly update is designed to help you stay informed and relate economic and company...

    Contact us to Open an Account

    Need Assistance? Share your Details and we’ll get back to you

    IMPORTANT INFORMATION

    This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.  

    An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details.  

    Investments are subject to investment risks including the possible loss of the principal amount invested. The purchase of a unit in a fund is not the same as placing your money on deposit with a bank or deposit-taking company. There is no guarantee as to the amount of capital invested or return received. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved.  

    Where applicable, fund(s) may invest in financial derivatives and/or participate in securities lending and repurchase transactions for the purpose of hedging and/or efficient portfolio management, subject to the relevant regulatory requirements. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products.  

    The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <www.phillipfunds.com> for more information in relation to the dividend distributions.  

    The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.  

    The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. Any member of the PhillipCapital Group of Companies may have acted upon or used the information, analyses and opinions herein before they have been published. 

    This advertisement has not been reviewed by the Monetary Authority of Singapore.  

     

    Phillip Capital Management (S) Ltd (Co. Reg. No. 199905233W)  
    250 North Bridge Road #06-00, Raffles City Tower ,Singapore 179101 
    Tel: (65) 6230 8133 Fax: (65) 65383066 www.phillipfunds.com