If you look up the dictionary definition of €equity' you will find entries like €a right, claim, or interest existing or valid in equity,' or €the money value of a property or of an interest in a property in excess of claims or liens against it,' and €a risk interest or ownership right in property' and finally, €the common stock of a corporation.' Something we need to be absolutely clear about before venturing towards the answer to the question, €what is equity fund?'
Equity fund is a bunch of private investors getting together to create a mutual fund to buy ownership (stock or equity) in businesses, either publicly or privately. The idea, of course, is to ensure that the investors profit from their investment as their €buy in' is represented by their ownership of stocks or equity in a company or business. There are other kinds of mutual funds, besides equity funds, that make up the principal asset class or category, such as fixed income funds or bonds as they are commonly known.
What is Equity Fund: An Easy Explanation
So, what is equity fund? Getting to know the different kinds of equity funds out there is easy, if you keep in mind three simple denominators, company size, type of investment and region or geography. In other words, size stands for the total value of the issued shares of the company (market capitalization), type of investment stands for the kind of shares and how do they generate revenue (or don't, if the company incurs losses) and location describes weather the stocks are invested in internationally, globally or specific to a certain region. Then there are specialized funds that focus on specific sectors or areas such as healthcare, agro-food or solar power.
Such funds offer a shareholder indirect ownership in a large collection of securities in a mutual fund portfolio. They allow small investors to invest in stock, thanks to diversification of mutual funds, in businesses they would not ordinarily have access to. Since they are a mutual resource pool of sorts, funds are backed by sound portfolio management that handles key decisions such as buying, selling and holding stock. In other words, you get professionals looking after your money.
Ubiquitous Equity
Think of the access equity funds give you; you can invest in any kind of company, big or small, across industries and sectors, in a specific region or simply take advantage of the variety of stock investment options available. As an added bonus, there is no stock brokers involved, which means some money saved on that front as well.
Well, now that you are familiar with what is equity funds investment all about, if you realize that as an investor, you are really spoilt for choice; then what are you waiting for?
Equity fund is a bunch of private investors getting together to create a mutual fund to buy ownership (stock or equity) in businesses, either publicly or privately. The idea, of course, is to ensure that the investors profit from their investment as their €buy in' is represented by their ownership of stocks or equity in a company or business. There are other kinds of mutual funds, besides equity funds, that make up the principal asset class or category, such as fixed income funds or bonds as they are commonly known.
What is Equity Fund: An Easy Explanation
So, what is equity fund? Getting to know the different kinds of equity funds out there is easy, if you keep in mind three simple denominators, company size, type of investment and region or geography. In other words, size stands for the total value of the issued shares of the company (market capitalization), type of investment stands for the kind of shares and how do they generate revenue (or don't, if the company incurs losses) and location describes weather the stocks are invested in internationally, globally or specific to a certain region. Then there are specialized funds that focus on specific sectors or areas such as healthcare, agro-food or solar power.
Such funds offer a shareholder indirect ownership in a large collection of securities in a mutual fund portfolio. They allow small investors to invest in stock, thanks to diversification of mutual funds, in businesses they would not ordinarily have access to. Since they are a mutual resource pool of sorts, funds are backed by sound portfolio management that handles key decisions such as buying, selling and holding stock. In other words, you get professionals looking after your money.
Ubiquitous Equity
Think of the access equity funds give you; you can invest in any kind of company, big or small, across industries and sectors, in a specific region or simply take advantage of the variety of stock investment options available. As an added bonus, there is no stock brokers involved, which means some money saved on that front as well.
Well, now that you are familiar with what is equity funds investment all about, if you realize that as an investor, you are really spoilt for choice; then what are you waiting for?