What are the types of Equity Funds?

• Small-cap Equity Funds

These equity mutual fund schemes invest in companies that rank above 250 in terms of their full market capitalization (as per SEBI guidelines). These funds are considered to be riskier than mid- or large-cap equity funds but can offer relatively higher returns. Their minimum exposure to such stocks is 65% of the total assets.

• Mid-cap Equity Funds

These equity mutual fund schemes invest in companies that rank between 101 and 250 by their full market capitalization. These funds are considered to be less risky than small-cap funds, but more than large-cap funds. Their minimum exposure to such stocks is 65% of the total assets.

• Large-cap Equity Funds 

These equity mutual fund schemes invest in companies that rank between 1 and 100 in terms of full market capitalization. These funds are considered to be the least risky as far as equity fund picking goes. Their minimum exposure to such stocks is 80% of the total assets.

• Large- & Mid-cap Equity Funds

These equity mutual funds equally divide the allocation between large- and mid-cap equity and related instruments and have the potential to offer high returns. The mandated minimum exposure to both large-cap and mid-cap stocks is 35% of each of the total assets. Multi-cap funds
Multi-cap equity funds invest in stocks across large-, mid-, and, small-cap companies. Depending on the market conditions, the fund manager decides the predominant investments. Their minimum exposure to such stocks is 65% of the total assets.