An equity fund is made up of predominantly stocks. This is in contrast to a debt fund, which is predominantly consists of bonds. Equity funds are also commonly known as stock funds. In addition, equity funds can be categorized by their prospects for growth. For example, there may be equity funds classified as follows:

  • Aggressive growth
  • Growth
  • Moderate growth
  • Income

Note, growth funds and income funds are two major distinguishing categories. Income funds invest in high dividend yielding companies; growth funds invest in companies with high earnings yields.

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