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Diversified Equity Mutual Funds

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Diversified Equity Mutual Funds
February 23, 2024

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A well-diversified equity fund, commonly referred to simply as a diversified equity fund, invests in companies regardless of whether they are large caps or mid caps or small caps.

What is a Diversified Equity Fund?

A diversified equity fund invests in companies regardless of size and sector. It diversifies investments across the stock market in a bid to maximize gains for investors. They are offered by unit-linked insurance plans / ULIPs, mutual funds and other investment firms.

Companies listed on the stock exchange come in all sizes and categories.

There are

  1. large companies also called large caps, due to their huge market capitalization or market caps
  2. mid-sized companies or mid capswith medium capitalizations
  3. smaller companies or small caps with smaller market capitalizations

How Does a Diversified Equity Fund Work?

On the same lines, a diversified equity fund invests in companies across sectors and industries. This way it can participate in growth across the economy and is not tied down to a particular sector or industry.

They can choose to invest in companies from -

  1. Pharmaceuticals
  2. Technology
  3. Engineering
  4. Automobiles
  5. Power / Utilities
  6. Banking and Financial Services
  7. Oil and Gas

Put simply, a diversified equity fund invests in companies across sectors, industries and market capitalizations.

Diversified equity funds of both ULIPs and mutual funds are launched with the specific purpose of giving investors the opportunity to benefit from financial growth of companies of all sizes and across industries and sectors. The investment guidelines vary across ULIPs / mutual funds and investors are informed of this through product literature / company websites.

Who Is It Ideal For?

For an investor with appetite for equities and long-term goals like retirement planning, saving for child's education or child's marriage, diversified equity funds either on a standalone basis or in a portfolio with other investments can prove useful.

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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