Financial literacy and more
An assumption is that mutual funds just invest in equities but this is not correct.
Mutual funds can have access to any kind of asset class.
There are mutual funds that invest in debt too.
Mutual funds can also invest in gold so these give investors an exposure to a commodity.
There can be a mixture of various assets in a mutual fund portfolio too.
Equity shares are the shares that provide ownership for an investor in a company.
There is equity capital that a company is authorised to issue and for this shares are given to investors.
These are equity shares which are the shares that are listed on a stock exchange.
These pay dividends only if the company makes a profit.
The holders of the equity shares will receive some amounts at the very end if there is something left for them at the time of the closing down of the company.
An equity investment is one where the investor becomes the owner of the company.
The investor is able to share in the profits of the company through dividends.
At the same time if the shares are listed then the investor can also earn capital appreciation.
As an owner the risk is also high because the loss for the investor can lead to erosion of capital.
This thus becomes a high risk and high return investment.