Equity Funds
Equity funds invest primarily in shares of companies, providing exposure to the equity markets through a single fund.
Different equity funds can focus on particular company sizes, sectors, countries or regions, or follow a specific investment strategy. This means their risk and return characteristics can vary significantly depending on where and how the fund invests.
Equity funds may be actively managed, where investment decisions are made by a fund manager, or passively managed to track a particular market index. Their risk and return characteristics can vary significantly depending on where and how the fund invests.
Understanding Equity Fund Risk
The risks associated with an equity fund will depend on the companies, sectors and markets in which it invests. Share prices can fluctuate and funds concentrated in particular sectors, countries or company types may experience greater volatility.
Fund values can fall as well as rise, and income from dividends is not guaranteed.
Key Features of Equity Funds
Equity Market Exposure
Provides access to a portfolio of company shares through a single fund.
Growth Potential
Equity funds may provide capital growth over the longer term, although their value can rise and fall.
Income Potential
Some equity funds aim to provide income from dividends paid by the companies in which they invest.
Investment Approach
Funds may focus on particular markets, sectors, regions, company sizes or investment styles.
Active or Passive
Funds may be actively managed by a fund manager or designed to track a particular market index.
Risk Considerations
Risk can vary considerably depending on the companies, sectors and markets in which the fund invests.
Equity Fund Strategies
By Company Size
May focus on larger, medium-sized or smaller companies.
By Geography
May invest globally or focus on a particular country or region.
By Sector
May concentrate on a particular industry, such as technology or healthcare.
By Investment Theme
May invest around a particular theme or long-term trend.
By Investment Style
May follow approaches such as growth, value or income investing.
Index-Tracking Funds
Aim to replicate the performance of a particular equity market index.
