What it is
A type of pooled fund (like a Unit Investment Trust Fund or UITF), an equity fund invests mostly in stocks.
There are different kinds of equity funds, all of which are professionally managed under either an active or passive strategy.
Among the types are index funds, which copy the composition and allocation of a certain stock index, and funds that try to achieve growth and income through dividends. Others put the money of their investors in shares that have the potential to grow strongly over the long term.
The major shares the fund owns will be stated in the fund prospectus and Key Information and Investment Disclosure Statement (KIIDS). Remember that these holdings may change in time depending on how well they’re helping the fund reach its objective.
What it means for you
To invest in an equity fund, you’ll need to have an Aggressive risk profile. That’s because stocks are generally volatile, and may go up and down in price quickly.
If you like the potential benefits of owning stocks but prefer to have your money face a little less risk, you can consider investing in a balanced fund instead.
