What is Equity Fund?

A Beginner’s Guide to Equity Mutual Funds

Published by Krystal Capitals | May 30, 2025

Understanding Equity Funds

An equity fund is a mutual fund scheme that primarily invests in shares of companies. These funds aim to grow your money over the long term by taking advantage of the growth potential in the stock market.

How Do Equity Mutual Funds Work?

They pool money from various investors and invest in a diversified basket of stocks. These are managed by professional fund managers who aim to beat market benchmarks either actively or passively.

Types of Equity Funds

• Large-Cap Funds: Invest in top 100 companies.
• Mid-Cap Funds: Mid-sized firms ranked 101–250.
• Small-Cap Funds: High-growth smaller companies.
• Multi-Cap Funds: Mix of all caps for diversification.
• Sector/Thematic Funds: Focus on specific industries or ideas.
• ELSS Funds: Equity-Linked Saving Schemes with tax benefits.

Benefits of Investing in Equity Funds

• High Return Potential with long-term investments.
• Diversification across industries reduces risk.
• Tax Benefits under Section 80C (ELSS).
• Professional Management by experts.
• Flexibility with SIP and lump sum options.

Risks to Know

Equity funds are subject to market risks. They're best suited for investors with long-term horizons and a moderate to high-risk appetite.

Who Should Invest?

• Young professionals starting their investment journey
• Investors looking to build long-term wealth
• Tax-savers (via ELSS)
• Goal-based investors (retirement, child education, etc.)

How to Start Investing?

You can invest through a SIP or lump sum via Krystal Capitals. We offer tailored guidance based on your goals and risk appetite.

💡 Quick Tips Before You Invest

• Match your goals to fund type
• Stick to SIP for discipline
• Review fund past performance & expense ratio
• Stay invested during market corrections

About Krystal Capitals: We are AMFI-registered Mutual Fund Distributors (ARN-272635) helping investors across India achieve financial success with honest advice and expert strategies.

Start Investing With Us