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What are Equity Mutual funds?

An equity mutual fund is a type of mutual fund that invests primarily in stocks or equity shares of companies. Equity mutual funds are managed by fund managers who pool the money of several investors and invest it in a diversified portfolio of stocks across different sectors and market capitalizations.

In India, equity mutual funds are regulated by the Securities and Exchange Board of India (SEBI) and are available in different categories, such as large-cap funds, mid-cap funds, small-cap funds, multi-cap funds, sectoral funds, and thematic funds. Investors can choose the fund category based on their investment goals, risk tolerance, and investment horizon.

Equity mutual funds offer several benefits to investors, such as diversification, professional management, liquidity, transparency, and potential for higher returns than other asset classes over the long term. However, like any other investment, equity mutual funds also involve market risks and are subject to market volatility. Therefore, investors must understand the risks associated with equity mutual funds and consult a financial advisor before investing.