Equity mutual funds are really nothing more than stock funds which are when an individual invests money in stocks or equities instead of money or bond funds.  In the majority of cases, it involves a stock with a small amount of cash and nothing to do with bonds, notes, or securities.  The main goal is to obtain long term growth which will be provided via capital gains.  In some cases, dividends will also be included in the total return.  These types of fund target a certain area of the market and have a predestined level of risk involved.

Features of equity mutual funds include the style in which they can be valued or their growth and that the investor can invest in only one country or in several different countries.  The funds may also be investing via the size of a company.

The main feature is that there is more security and safety to those investing in these fund than if you just invested in the stock market.  The stock market is volatile and many brokers still have received their returns since the problems seen with the market over the last few years.  The main problem is that many of the investors that are still waiting for their returns were to use the money for their retirement years.

There are only two main types of equity mutual funds which include domestic which are mutual fund companies residing in the United States or Canada that allows investors to invest in companies in both of these countries.  Some offer investments only in certain areas and offer a small cap or even technology domestic funds.

The other type of equity mutual fund is the international equity fund that basically works in the same manner.  You can choose on certain area of the world like Europe or any emerging market.  Of course, when working in this arena, the currency rates fluctuate and can impact your loss or profit.  The capital gains as well as dividends do not allow you a dividend tax credit and all income is taxable.

The majority of mutual funds are affected by the changes in the market condition and the investor will lose or gain accordingly.  On the other hand, if you want to be a bit safer you may wish to refer to excelfunds.com to learn more about obtaining an Equity Indexed Annuity.  You can with any mutual fund gain the full amount of your investment or lose the full amount as well.  On the other hand, with an equity fund, you will gain a certain part of the gain, but will not lose any of your investment.


Arnel Ariate is the webmaster of Money Soldiers.

Click Here to Leave a Comment Below 0 comments

Leave a Reply: