EQUITY FUND TYPES
More than 80 per cent investments happen in large-cap companies, ensuring better returns and providing a cushioning effect even if the stock indices fall sharply.
In this, 60 per cent to 80 per cent of investments get invested in large-cap companies. Any drastic fall in stocks have a marginal effect on investment.
Here, at least 60 per cent of investment is in small- and mid-cap companies. Any sharp fall in stock indices will have direct impact, but when the fund grows, it grows exponentially.
These funds normally have a specific lock-in period (three years, for example, unless converted into an open-ended fund), after which they can be traded. Further purchases can be made anytime during the lock-in period. These funds give the tax benefit of a rebate u/s 80C of the Income Tax Act.
These funds are exclusively for investment in the realty sector where there is a long gestation period due to project structure, before they start giving you returns, depending upon the fund house’s brand value and the completion of projects on time as well as selling the building units to public/corporate entities.
These funds attract investments outside the country (abroad) of more than 65 per cent.
In this, you can grow your money by investing in the equity market as well as avail tax deduction under Section 80C of the Income Tax Act and get tax-free dividends. In some ELSS funds, there could be a lock-in period of three years.