Reap long term investment benefits with equity funds

It is good to know the benefits of different plans before you make any investment. With knowing the benefits you will know if you are going to invest in the right mutual fund type or not. In this piece, we are going to talk about the benefits of equity funds but before that let us know what exactly an equity fund is?

People are investing in this type of mutual fund because they get higher returns in it by investing in the stocks of different companies across all the market capitalizations. Investing in this is risky because the returns of the investors totally depend on the performance of the company they have invested in. But the returns they are going to get are more than any other type of mutual fund.

So, if you are planning to invest in equity funds, here are some benefits that you need to know before taking any step:

1. Professional Management:

In this everything is going to be done by a professional, who will do the research, analysis, and trading for the investors. The person is going to have deep knowledge about investment and is going to guide you well. There are going to be fewer chances of committing any mistake.

2. Diversification:

This type of mutual fund allows diversification. You get the chance to get exposure to different stocks. It doesn’t matter if you are investing Rs 500 but it is going to allow you to have a diversified portfolio. This helps in reducing the risk of losing your money.

3. Liquidity:

The best part of this fund is that you can redeem your money whenever you want. This means that if you are in need of money, you can ask for your money to be returned. But this is not possible in case of Equity Linked Saving Schemes because it is having a lock-in period of 3 years. You can also think about investing more in this when the market is falling to buy units at lower Net Asset Value. In short, you have complete control of your investments in this.

4. Regular Investments:

Equity mutual funds allow you to invest a small amount of money at regular intervals with the help of Systematic Investment Plans, which is commonly known as SIP. With SIP it becomes really easy for the budding investors to invest. And eventually, you develop a habit of investing at regular intervals, which is good for your growing wealth.

5. Tax Benefits:

In the case of having an investment period of 1 year, the capital gain is going to be free from the tax liabilities. The reason that the people are investing in this type of mutual fund is that the government is providing a tax rebate for equity-linked saving schemes.

These are a few benefits that the investors experience with time. The investors get higher returns and various benefits about which they can ask in detail from a professional. Investing in equity funds is going to be one of the best decisions you are ever going to make in your life for your financial growth.