equity funds
As the name suggests, equity funds invest in stocks, i.e. shares in listed companies. As an investor, when you invest in a stock fund, you buy Shares from many different companies. Fund management decides which shares to buy, hold or sell.
By spreading the price risk across many different companies, the risk for investors is minimized with equity funds. Nevertheless, the fund’s performance depends on the growth of the companies contained in the fund. For this reason, equity funds can exhibit high volatility, but also offer investors high opportunities for returns. Equity funds are suitable for long-term investors, as the risk of loss can be kept small.
Before you buy an equity fund, pay attention to its objectives: In which countries is it investing, what is the market capitalization of the companies in the fund and what industry are they in?