What makes a fund "equity"
SEBI calls a fund equity-oriented when it keeps at least 65% in shares (most keep far more). Its NAV moves with the stock market: in a good year it can rise 20–30%; in a bad one it can fall as much.
The main types
| Type | Invests in | Risk |
|---|---|---|
| Large cap | At least 80% in India's top 100 companies | Lower within equity |
| Mid cap | At least 65% in companies ranked 101–250 | Higher |
| Small cap | At least 65% in companies ranked 251 and below | Highest |
| Large & mid cap | At least 35% each in large and mid caps | Moderate-high |
| Multi cap | At least 25% each in large, mid and small caps | High |
| Flexi cap | At least 65% in shares of any size, manager's choice | Varies |
| ELSS (tax saver) | At least 80% in shares; 3-year lock-in | High |
| Index funds and ETFs | Copy an index such as the Nifty 50 at low cost | Market risk only |
| Sectoral / thematic | One sector or theme, such as banking or infrastructure | Very high |
How long to stay
Equity needs time. Over one year, results can be anything; over 5–7 years and more, the odds of a loss have historically fallen a lot, though never to zero. Put only money you won't need for at least five years into equity funds.
Tax
- Sold within 12 months: 20% on the gain.
- Held over 12 months: 12.5% on gains above ₹1.25 lakh a financial year (across all your equity funds and shares).
- ELSS: the deduction for tax-saving investments applies only under the old tax regime.
Building a simple equity mix
Many investors keep it to two or three funds: one large cap or index fund as the core, one flexi cap, and perhaps a small slice of mid or small cap for growth. More funds often just mean the same shares owned several times.
Mutual fund investments are subject to market risks; read all scheme-related documents carefully.
For general information only, not investment advice or a recommendation. Oxon Fintech is a loan facilitation platform, not a SEBI-registered investment adviser, bank or mutual fund distributor, and does not sell bonds, deposits or funds. Rates and rules are as checked on the date above; confirm with the issuer, bank or fund house before investing. Mutual fund investments are subject to market risks; read all scheme-related documents carefully.