Mutual funds are the funds that are raised by the money invested by the people. Mutual funds can be classified into many types based on the time, an entity in which investment is done and the return. One such mutual fund is the equity fund that is related to the others through the working, NAV and mutuality. Even though the two are different in many ways, the below-mentioned points will effectively describe the relation of equity funds to the mutual funds.
- Investment:
Equity mutual funds use money raised by the customers or the shareholders to invest in stocks. Other types of mutual funds invest in different fields of the market to gain profit. The funds deduced the money from the investments to reach a particular rate fixed by them. Equity funds face fluctuation in the market every day so, the investment and return are accordingly based on that. - Mutuality:
As the name suggests, mutual funds are raised by various investors collectively. There is mutuality in investing between them. No matter the amount, mutual funds including equity funds offer investment to all the willing customers. The rules and regulations have also helped in cherishing the mutuality as they enforce the same rules to all the investors and they are treated financially equal. - Net Asset Value:
The net asset value or the NAV is the values of the units in a fund. For equity funds, it goes up and down on a daily basis. Generally, when one wants to compensate for the money lost in the funds, the buy units and sells them at the present NAV.0
Hence, we now know what mutual funds are related to equity funds. While an equity fund is a part of mutual funds, their fund collection, the decision of NAV and units are similar. In the present times, making investments for post retirement and various other plans have become more and more common. There are many investment companies in the market, and one must know how to make the right choices. It is important for us to know about all these details in order to determine the appropriate investment plans.
