Debt Mutual Funds
Funds that invest in bonds, government securities and money-market instruments — typically steadier than equity funds, and useful for short to medium-term money.
Equity Mutual Funds
Invest in a diversified basket of company shares, managed by professional fund managers, with the aim of building wealth over the long term.
- Risk level
- Very High risk
- Minimum investment
- SIP from ₹500 a month (varies by scheme)
What are equity mutual funds?
An equity mutual fund pools money from many investors and invests it mainly in shares of listed companies. A professional fund manager, supported by a research team, decides which companies to buy and sell within the rules of the scheme. In return you hold units of the fund, and the value of each unit (the NAV) moves with the market value of the shares the fund holds.
Types of equity funds
SEBI groups equity schemes into clear categories so that funds are easy to compare:
- Large cap, mid cap and small cap funds — invest by company size. Smaller companies have tended to be more volatile than larger ones.
- Flexi cap and multi cap funds — invest across company sizes.
- ELSS (tax-saving) funds — have a three-year lock-in and qualify for deduction under Section 80C in the old tax regime.
- Sectoral and thematic funds — focus on one sector or theme, and carry concentration risk.
- Index funds — track an index such as the Nifty 50 rather than trying to beat it.
Things to keep in mind
Equity funds can fall sharply over short periods, and returns are never assured. They are generally considered suitable only for money you will not need for several years. Every scheme carries a riskometer rating and publishes a Scheme Information Document — please read both before you invest.
How GTDIS helps
We help you complete your KYC, set up your investment account and choose between SIP, lumpsum and transfer options. We share research and scheme information so that you can make an informed choice, and after you invest we provide regular portfolio reports through your investor login.
GTDIS distributes Regular Plans of mutual fund schemes and earns a trail commission from the fund house.
Equity Mutual Funds: common questions
How much do I need to start investing in equity mutual funds?
Most schemes accept a monthly SIP from ₹500, and some from ₹100. Lumpsum minimums are usually ₹1,000 to ₹5,000. The exact amount depends on the scheme.
Should I invest through a SIP or a lumpsum?
A SIP spreads your investment across market ups and downs and builds a saving habit. A lumpsum suits money you already have available. Many investors use both. We can walk you through how each works so you can decide.
How are gains from equity mutual funds taxed?
Gains on units held for more than 12 months are long-term capital gains; shorter holdings are short-term capital gains. Rates and exemption limits change, so please confirm the current position with your tax adviser.
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Want to know more about Equity Mutual Funds?
Talk to us. We'll explain how it works, what the risks are and how to get started.