What Are Equity Mutual Funds and how does it Benefit Investors?

with the aim of long-term capital appreciation.

Thus, an equity mutual fund is a mutual fund that invest in equity shares of companies that have potential to provide long term returns to investors.

An example of a growth oriented equity mutual fund would be a mutual fund that has in its portfolio companies with a proven track record of great revenue growth or younger companies with potential. Equity mutual funds follow different styles such as growth, blend and value funds and comprise the primary https://urzadzajzpasja.pl/
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An equity mutual fund scheme generally aims to provide capital appreciation over the medium to long- term.

Growth Plan vs. IDCW(Income Distribution cum Capital Withdrawal’)

The term “Dividend Option” in mutual funds was changed to “IDCW” in April 2021 by SEBI.

Should the investor invest in Growth Plan VS IDCW?

In a growth plan, the profits remain invested in the scheme. Over a long period, the investor can earn compounded returns. Growth plan NAV will always be higher than the IDCW option because on distribution of the available surplus the NAV of the scheme is reduced to that extent. .

In IDCW, the available surplus may be dispensed partially or fully at the discretion of the fund manager / AMC / Trustees.
If investors prefer capital appreciation or long-term wealth creation, they should invest in growth option of the mutual fund scheme.
If the investors aim for cash-flows from their investments, then they may opt for IDCW option.

Benefits of Equity mutual Funds

Potential for high returns over long t