Equity Mutual Funds
Last Updated on 11 May 2026
3 Year Average Returns
17.29%
Funds on Anand Rathi
1182
Equity Funds to Invest in 2026
| Fund Name | |||
|---|---|---|---|
| ICICI Pru Infrastructure Fund - (IDCW) | 13.22% | 23.99% | 26.04% |
| ICICI Pru Infrastructure Fund - (G) | 13.19% | 23.98% | 26.04% |
| Aditya Birla SL PSU Equity Fund (IDCW) | 19.48% | 27.95% | 25.77% |
| Aditya Birla SL PSU Equity Fund (G) | 19.45% | 27.96% | 25.77% |
| SBI PSU Fund (IDCW) | 19.43% | 30.14% | 25.65% |
| SBI PSU Fund (G) | 19.43% | 30.14% | 25.64% |
| Nippon India Power & Infra Fund (G) | 21.29% | 27.05% | 25.63% |
| Nippon India Power & Infra Fund (Bonus) | 21.29% | 27.05% | 25.63% |
| Nippon India Power & Infra Fund (IDCW) | 21.29% | 27.04% | 25.63% |
| DSP India T.I.G.E.R. Fund (G) | 23.78% | 27.21% | 25.54% |
| DSP India T.I.G.E.R. Fund (IDCW) | 23.78% | 27.21% | 25.54% |
| LIC MF Infrastructure Fund (G) | 23.93% | 29.39% | 25.13% |
| LIC MF Infrastructure Fund (IDCW) | 23.93% | 29.39% | 25.13% |
| Canara Robeco Infrastructure (G) | 18.32% | 25.56% | 24.65% |
| Canara Robeco Infrastructure (IDCW) | 18.26% | 25.58% | 24.63% |
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Est. Returns
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Explore Equity Funds by Types
Explore Mutual Funds by Types
What are Equity Mutual Funds?
Equity mutual funds are an MF category that invests in specific stocks of companies listed on the exchange. The sole purpose of these funds is to invest in equities that appreciate capital in the long run. So, when these stocks perform better, your investment value also increases.
There are various types of equity funds. Each caters to specific goals, market capitalization, or a distinct fund manager's strategy. These options allow investors to select funds that match their risk tolerances and financial needs.
Benefits of Investing in Equity Funds
Equity mutual funds offer several benefits that make them a preferable choice for those looking for:
Professional Management
Here, professional fund managers manage online equity funds and select stocks based on their market view and in-depth market research. They regularly analyze market conditions to adjust your investment to safeguard yields.
Portfolio Diversification
By investing in equity mutual funds, your money belongs to several businesses and industries, not just one. It ensures your entire investment does not reside in a single stock and that risk is spread evenly.
Convenience and Flexibility
Equity funds make investing hassle-free as they provide;
- Simple options for investing online
- You may use a Systematic Investment Plan (SIP) to start investing gradually.
Liquidity
Equity mutual funds are easy to buy and sell at any time, providing liquidity to meet your financial needs.
Who Should Invest in Equity Mutual Funds?
Investors with specific profiles or investment goals may find equity mutual funds appropriate. It includes;
- Those planning to fulfill their financial goals, such as retirement preparation, a child's schooling, a wedding, or real estate acquisition.
- Investors comfortable with the market volatility associated with equities (stocks).
- Individuals or beginners who want to explore equity investment with professional management but minimal involvement.
- Investors who prefer regular, systematic investing through SIPs (Systematic Investment Plans).
How Does an Equity Mutual Fund Work?
Unlike mutual funds, even equity funds have a similar process from fund pooling to portfolio management. However, at its core, the fund strategy and asset allocation would differ. Here's a simple breakdown of the process:
Step 1: Pooling of Funds
The first step is to raise funds from investors, pool them, and then follow the developed fund's investment strategy. In most cases, it is predecided before the launch of NFO (new fund offer) for investors' knowledge.
Step 2: Stock Selection by Fund Manager
Depending on the fund scheme, the fund manager selects the stocks and invests based on;
- Fund goals
- Company Fundamentals
- Economic and market trends
However, this selection can also vary depending on the mutual fund's objectives. For example, if it's a large-cap fund, the selection would include the top 100 companies based on market cap.
Step 3: Diversification into Equities (and other instruments)
The fund manager will invest in stocks based on market cap or investment strategy. In return, you will receive units of that fund.
But with a major equity focus, the fund can also allocate a small percentage to debt securities and liquid instruments.
Step 4: Fund Performance
Over time, the value of your investment rises in step with the fund's stock prices. In the end, for evaluation purposes, the fund's overall performance is measured by Net Asset Value (NAV) or the cost per unit.
Step 5: Fund Management and Risk Analysis
Based on market conditions, the fund manager continuously assesses and modifies the portfolio. Any major diversions are then aligned with the fund's investment goals and risk-return ratio.
Step 6: Redemption or Withdrawal of Funds
Investors can choose to redeem their units and withdraw their investment anytime. However, it does attract exit load and taxes (LTCG and STCG) on redemption.
How to Choose the Right Equity Mutual Funds?
Your choice of equity mutual fund might have a significant impact on your investing experience. Here's how you can choose a fund that matches your financial goals:
- Understand Your Investing Objectives - Before choosing a fund, learn what your financial goals are:
- Long-term generation of wealth
- Setting aside money for schooling
- Making retirement plans, etc.
- Recognise Your Risk Tolerance - Every fund will have varying risk and return characteristics. Assess your comfort level with market volatility before selecting a fund.
- Examine the Fund's Performance History - Evaluating the fund's historical performance can serve as a guide (not a forecast of future growth).
- Track record and Fund Manager's Experience - Consider the fund's strategy and experience of the fund manager, and how they plan to manage the fund during volatility.
- Expense Ratios and Fees - Regardless of the fund, the expense ratio applies to all. And a higher ratio eventually ends up lowering your net proceeds. Hence, selecting a fund with transparent fee structures can help you make a better choice.
- Recognise the Fund Composition - With equity at its focus, each mutual fund will follow a different strategy. The composition may include stocks of varying industries and businesses. Hence, select funds that reflect your economic and market views or interests.
What Are the Types of Equity Mutual Funds?
Depending on their investing focus, equity mutual funds are divided into many types.
Major Types of equity mutual funds include;
- Large Cap Funds - They invest in the top 100 companies by market capitalization, with reputable businesses and solid track records.
- Mid-Cap Funds - These companies are medium-sized businesses with room for further growth but are less volatile than small-cap funds. It includes the next 101-250 companies ranked by market cap.
- Small Cap Funds - Companies beyond the 251 rank belong to this category. It includes smaller businesses that have greater growth potential but are also equally volatile.
- Multi Cap Funds - This fund invests in a mix of small, medium, and large businesses to seek a well-rounded strategy for stability and growth.
- Thematic and Sectoral Funds - As the names suggest, these funds invest in specific sectors or themes, such as infrastructure, technology, pharmaceuticals, or green revolution. This fund can suit investors who are knowledgeable about or strongly believe in a particular industry.
- Equity Linked Savings Schemes (ELSS) - Focusing on tax benefits, ELSS funds offer tax incentives under Section 80C of the Income Tax Act. But they have a three-year lock-in period.
- Index funds - By tracking a particular stock market index, such as the Sensex or Nifty, these funds replicate the same stocks in their MF portfolio.
- Other Equity MFs: The rest category includes Value fund, Contra fund, Focused fund, Flexi-cap fund, and Dividend yield fund.
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The information provided on this page is for informational purposes only and should not be construed as investment advice, recommendation, or solicitation to buy or sell any securities or financial pr...
Frequently Asked Questions
- Create an account
- Complete e-KYC process
- Select the fund type and choose the investment mode – SIP or Lumpsum.
- Track and monitor investments anytime using a mobile app or digital platform.
- Short-Term Capital Gains (STCG): Gains are subject to 20% taxation on units held for less than a year.
- Long-Term Capital Gains (LTCG): Gains up to ₹1.25 lakh are tax-exempt for units held for 12 months or more; gains over this amount are subject to 12.5% tax.
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