There are different equity funds catering to various needs of investors. The broad objective of all is to generate appreciation over long periods.
To understand it better let us look at the contingent we send to the Olympic Games. There is a large group of players, and then there are teams for various sports. One of the major events at the Olympic Games is the “track and field” event. We send a group for these events, as well. Within that, there are some races – right from a 100-meter sprint to long distance races, including marathon. Though, the whole contingent has gone to compete in the Olympic Games, there would be different players with different strengths.
It is the same with Mutual Funds. If all the Mutual Fund schemes are equivalent to the entire Olympic contingent, equity funds may be similar to a group within, which participates in, various track and field events. As we saw, there are various sub-categories even within track and field, similarly, there are different schemes within equity funds.