8.20Equity mutual funds
1What is it?
Equity funds invest mainly (at least 65%) in shares.
2Why does it exist?
For long-term growth above inflation.
3Diagram
| Invests in | Suits | Risk | Suggested horizon |
|---|---|---|---|
| Shares (65%+) | Long-term goals | High | 5+ years |
4Quick revision
- Equity funds invest mainly (at least 65%) in shares.
- Risk: High.
- Horizon: 5+ years.
5Knowledge check
Q1. Minimum equity allocation?Show answer
About 65% for equity-oriented funds.
Q2. Suitable for a 1-year goal?Show answer
No.
Q3. Main benefit?Show answer
Long-term growth potential.
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