Understand This PPT : https://youtu.be/TTAdBJixg9o This slide share tells all about the equity fund inevsting, its types, Features, Benefits. What an equity Fund? How do Equity Funds work? Who should Invest in Equity Funds? Types of Equity Mutual Funds Features of an Equity Fund Benefits of investing in Equity Mutual Funds Taxation rules of Equity Funds Choosing between Lumpsum Investment and SIP For video :https://youtu.be/TTAdBJixg9o

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2. Mutual Fund Series
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3. Type of Equity Funds
VARIOUS EQUITY SCHEMES

4. Table of content
 What an equity Fund?
 How do Equity Funds work?
 Who should Invest in Equity Funds?
 Types of Equity Mutual Funds
 Features of an Equity Fund
 Benefits of investing in Equity Mutual Funds
 Taxation rules of Equity Funds
 Choosing between Lumpsum Investment and SIP
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5. What is an Equity Fund?
 Equity mutual funds try generating high returns by investing in the stocks of
companies across all market capitalisations. Equity mutual funds are the riskiest
class of mutual funds, and hence, they have the potential to provide higher returns
than debt and hybrid funds. The performance of the company plays a significant
role in deciding the investors’ returns.
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6. How do Equity Funds work?
 Equity mutual funds invest at least 60% of their assets in equity shares of
numerous companies in suitable proportions. The asset allocation will be in line
with the investment objective. The asset allocation can be made purely in stocks of
large-cap, mid-cap, or small-cap companies, depending on the market conditions.
The investing style may be value-oriented or growth-oriented.
After allocating a significant portion towards the equity segment, the remaining
amount may go into debt and money market instruments. This is to take care of
sudden redemption requests as well as bring down the risk level to some extent.
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7. Who should Invest in Equity Funds?
 Your decision to invest in equity funds must be in sync with your risk profile,
investment horizon, and objectives. Generally, if you have a long-term goal (say,
five years or more), then it is better to invest in equity funds. It will also give the
fund much needed time to combat market fluctuations.
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8. Different Investor ~ Different Investing
 For budding investors - If you are an aspiring investor who wants to have exposure to the
stock market, then large-cap equity funds may be the right choice. These funds invest in
equity shares of the top-performing companies whose risk level is low. The well-established
companies have historically delivered stable returns over a long period.
 For market savvy investor -If you are well-versed with the market pulse and willing to
take calculated risks, then you may think of investing in diversified equity funds. These
invest in shares of companies across all market capitalisations. These funds provide an
excellent combination of high returns at lower risk as compared to equity funds that only
invest in small-cap/mid-caps.
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9. Types of Equity Mutual Funds
 categorise equity funds based on the investment mandate and the kind of stocks
and sectors they invest in :
 Investment Strategy based categorization
 Market Capitalisation based categorization
 Tax treatment based categorization
 Investment style based categorisation
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10. Investment Strategy based categorization
 Theme and Sectoral Funds – An Equity Fund might decide to follow a specific investment theme
like an international stock theme or emerging market theme, etc. Also, some schemes might invest
in a particular sector of the market like BFSI, IT, Pharmaceutical, etc. Here, it is important to note
that sector or theme-based funds carry a higher risk since they focus on a specific sector or theme.
 Focused Equity Fund – This fund invests in a maximum of 30 stocks of companies having market
capitalization as specified at the time of the launch of the scheme.
 Contra Equity Fund – As the name suggests, these schemes follow a contrarian strategy of
investing. These schemes analyze the market to find under-performing stocks and purchase them
at low prices under the assumption that these stocks will recover in the long term.
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11. Market Capitalization-based
Categorization
 Some schemes might decide to invest in companies with specific market capitalizations
only. Here are the common types:
 Large-Cap Funds – which typically invest a minimum of 80% of their total assets in
equity shares of large-cap companies (the top 100). These schemes are considered to
be more stable than the mid-cap or small-cap focused funds.
 Mid-Cap Funds – which usually invest around 65% of their total assets in equity shares
of mid-cap companies (101-250th placed companies according to market
capitalization). These schemes tend to offer better returns than the large-cap schemes
but are also more volatile than them.
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12. Market Capitalization-based
Categorization
 Small-Cap Funds – which typically invest around 65% of their total assets in equity shares of
small-cap companies (251st and below placed companies according to market capitalization). This
is a huge list and more than 95% of all companies in India fall into this category. These schemes
tend to offer great returns than the large-cap and mid-cap schemes but are also highly volatile.
 Multi-Cap Funds – which usually invest around 65% of their total assets in equity shares of large-
cap, mid-cap and small-cap companies in varying proportions. In these schemes, the fund
manager keeps rebalancing the portfolio to match the market and economic conditions as well as
the investment objective of the scheme.
 Large and Mid-Cap Funds – which usually invest around 35% of their total assets in equity
shares of mid-cap companies and 35% in large-cap companies. These schemes offer a great blend
of lower volatility and better returns.
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13. Tax Treatment – Based Categorization
 Equity Linked Savings Scheme (ELSS) – ELSS Funds is the only equity scheme which
offers tax benefits of up to Rs. 1.5 lakh under Section 80C of the Income Tax Act. These
schemes invest a minimum of 80% of its total assets in equity and equity related
instruments. Further, these schemes have a lock-in period of 3 years.
 Non-Tax Saving Equity Funds – Except ELSS, all other Equity Funds are non-tax saving
schemes. This means that the returns are subject to capital gains tax.
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14. Investment Style-based Categorization
 Active Funds – These schemes are actively managed by the fund
managers who handpick the stocks that they want to invest in.
 Passive Funds – These schemes usually track a market index or segment
which determines the list of stock that the scheme will invest in. In these
schemes, the fund manager has no active role in the selection of the
stocks.
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15. Features of an Equity Fund
 Lower Expense Ratio -In an Equity Fund, regular buying and selling of shares can lead to an
increase in the expense ratio of the scheme. The Securities and Exchanges Board of India
(SEBI) has created an upper limit for the expense ratio of equity funds at 2.5%. Also, SEBI
might reduce it further. This means more returns for investors.
 Tax Exemption under Section 80C-The Equity Linked Savings Scheme or ELSS offers tax
exemption under Section 80C of the Income Tax Act with exposure to equity. It has a small
lock-in period of 3 years and offers great potential for earning good returns. You can also
invest in an ELSS in installments.
 Portfolio Diversification-Equity Funds allow you to gain exposure to several good equity
shares by investing a small amount. Hence, your equity portfolio is diversified and offers a
better opportunity of earning good returns.
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16. Benefits of investing in Equity Mutual
Funds
 Your investment is managed by experts
 It is cost-efficient
 Convenient
 It offers diversification
 You can opt for systematic investments (installments)
 It offers flexibility and liquidity
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17. Taxation rules of Equity Funds
 Capital Gains Tax-If you hold the units of the scheme for a period of up to one
year, then the capital gains earned by you are called short-term capital gains or
STCG. STCG is taxed at 15%.If you hold the units of the scheme for more than one
year, then the capital gains earned by you are called long-term capital gains or
LTCG. LTCG above Rs.1 lakh is taxed at 10% without indexation benefits.
 Dividend Distribution Tax (DDT)-This tax is deducted at source. Hence, when
the mutual fund pays out dividends, it deducts DDT of 10% before distributing the
dividend.
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18. Choosing between Lumpsum Investment
and SIP
 Lumpsum investment means that you invest the entire amount together. For example, if you want to buy
units worth Rs. 5 lakh, then you can debit your bank account by the said amount and purchase the units. On
the other hand, an SIP or Systematic Investment Plan means that you invest a fixed amount of money at
regular intervals.
 Both lumpsum and SIP investing have their pros and cons. A lumpsum investor needs to invest at the right
time to earn good returns. The risk is that if he times it wrong, then the returns can be lesser or he might
even book losses. SIP investing helps mitigate this risk by allowing you to invest the same amount spread
across a large period. This makes SIP investing affordable and flexible while inculcating the habit of
investment discipline in you. Further, SIP investing also helps you benefit from Rupee Cost Averaging (RCA)
where the average cost of purchasing a single unit reduces with time and you are safeguarded from market
fluctuations.
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19. An Overview of Equity Funds in India
 Generally, Equity Funds are known to deliver around 10-12% returns (pre-tax). This
is an average figure and the performance of every fund can vary depending on the
market conditions. Choosing the right scheme goes a long way in helping you
ensure healthy returns on your investment. Based on the returns of the last five
years, here is a list of equity funds which have been the best performers:
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20. Top AMCs of India
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21. All About Equity Funds
 dhuouoa
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22. Next Video :
Type of Debt Funds &
Various Debt Schemes

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