The new year brings with it newer opportunities for growth, prosperity, security, and abundance. All of this can be achieved with equity investments. Equity mutual funds can offer high returns and help you achieve your goals sooner. If you are not investing in them yet, 2022 can be the perfect time to start. Given the financial turbulence of the last two years, now can be a great time to focus on capital appreciation. And, equity mutual funds can be the perfect companion for this. Keep reading to find out more.
What are equity mutual funds?
Equity mutual funds are funds that invest in the shares of other companies. They can carry high risk, but they also have the potential to deliver high returns. You can invest in them via a SIP (systematic investment plan) or in a lump sum.
Here are some ways in which equity investments can help you build wealth in 2022:
- Save tax withEquity Linked Savings Schemes (ELSS): ELSS is a type of equity mutual fund that offers tax benefits under Section 80 C of the Income Tax Act, 1961. You can claim a tax deduction of up to Rs. 1. 5 lakh in a year and save considerably on taxes. ELSS also has a 3 year lock in period that helps you stay invested in the scheme for a longer time. This inculcates good financial discipline and, at the same time, allows your investment to grow untouched.
- Earn inflation-beating returns: Equity mutual funds can deliver inflation-beating returns. After the rising prices of goods and services due to Covid-19, investing in equity funds can be a great way to grow your wealth and earn inflation-beating returns that keep you financially secure in the future.
- Invest in smaller quantities: You can invest in equity mutual funds through a SIP. This allows you to build wealth with smaller investments over time. The immediate burden of investment is reduced, and you can benefit from rupee cost averaging and the power of compounding over the long term.
- Get exposure to equity: Investing in direct equity can be time-consuming and take a lot of effort. However, equity mutual funds can offer you the same exposure to equity but with the help of a fund manager. Equity mutual funds are managed by professional fund managers. So, you get exposure to the various stocks in the fund’s portfolio with minimal effort from your end.
To sum it up
Equity mutual funds can be a great addition to your investment portfolio in 2022. They can offer high returns over time and help you achieve your goals sooner. If you wish to invest in them, you can download the Tata Capital Moneyfy app and browse through the different mutual fund options.