Whenever we hear the name “equity mutual fund”, we all imagine a fund which gives a lot of returns. Investors who are looking for long term capital growth Equity Mutual Fund is best for them. The risk and returns depend on scheme to scheme. Every equity fund is under actively or passively managed by experienced fund managers.

Here are the reasons why should anyone invest in equity mutual fund.

• Diversification– If you invest in equity mutual funds that money gets spread into many sectors which lower the risk of that investment. If one stock is not performing well that one which is performing well make up for the other one. But, still, there is some risk. No one can escapes from all the risks in equity even having a well-diversified portfolio.
• Pocket-Friendly– Everyone can invest in equity mutual fund as it is pocket-friendly. You just can start a SIP today with minimum rupees of 500/- only.  A regular periodic investment through ECS (Electronic Clearing Service) is allowed on SIP.
• Goal oriented Funds – If you are planning long term financial goal, equity is the best option for you. Equity divides into four sectors Large-Cap, Mid-Cap, Small-Cap, and Multi-Cap. The returns are dependent on the fund to fund. The more you higher the risk you will gain faster.
• Save your tax with ELSS– Under the section of 80C income tax act 1961, you can save tax by ELSS up to Rs.1.5lakh. If you invest in ELSS (Equity linked savings fund) a lump sum amount for three years you can get a huge tax deduction. This comes with a lock-in period of three years also only this scheme has the least lock-in period. This also gives higher returns compared to other instruments.
• Tax-free Returns– While you are investing in equity mutual fund you can remember one thing in your mind that your investment can be tax-free. If you gain profit before one year your profit won’t be tax-free. You have to pay a tax of 15% which may reduce your gain, but if you redeem it after one year this return will be tax-free.
• Managed by Professionals- While we invest directly on market there are so many issues. First is we all do not have so much time to keep an eye on market or we don’t know what will be the best stock to buy in the market but an experienced fund manager knows where to invest and when to invest. Equity Funds are managed by professional and experienced fund managers, that’s why your money won’t go in vain.
• Get money on your hand in any time – The most interesting part about the equity fund is you can get your invested money any time you want. Whenever you need money you can just stop your SIP and can redeem the number of free units or all units you want. It may take time of 5-7 days or if your SIP is already matured, you can get your money in three days