The equity funds go for high returns by investing in the shares of companies with different market capitalization. These funds offer higher returns than fixed deposits and debt funds. The returns on investment depend on the performance of the company. Equity mutual funds India invest at least 60% of the assets in equity shares of companies in varying proportions. It is done in line with the investment mandate. The fund can be purely mid-cap, large-cap or small-cap. It can be a mixture of market capitalization. Let us see the role of equity fund in the life of a millennial investor.

Capital Appreciation - One of the primary benefits of equity investment is capital appreciation. As the company grows and earns a profit, the company generally uses the profits for reinvestment and increase market share. As the company grows, the market price of the stock increases and this leads to capital appreciation for investors.

Built-in diversification - The equity funds are diversified by design. If you had to invest in stocks, you would need to keep track of different stocks in the market. Chances are you would be investing in some shares more than others, leading to market risks. The mixture of market capitalization dials down the risk. Equity funds hold a variety of investments to make it easier for investors to diversify. Not all the investments perform well and holding several investments can put off the impact of the weak performers. 

Liquidity - Stocks are traded in all the major exchanges throughout the world. That is why these investments are highly liquid. An investor can sell the stocks whenever they would like to. Though the equity mutual funds India are not as liquid as the savings in your bank account. However, they are quite close. They are much more liquid than real estate. An investor would usually get the money from the stock sale within a week. 

Professional management - Investments are surrounded by uncertainty. An investor is often scared to invest as they do not possess enough knowledge or enough time, investing experience or self-discipline. Equity funds can be better suited for such investors as they are managed by professionals. As they are run with the help of professional expertise, it relieves the stress of the investors. 

Ideal investment vehicle - In many ways equity funds are the most suitable investment option for people who want to invest. They are best for those who do not have an excellent knowledge of financial investments or maximum investment capital. Equity funds are practical investments for many such investors. The features due to which these funds are considered perfect for small individual investors are the reduced risks through portfolio diversification.

These are some of the roles played by equity funds in the life of a millennial investor.