How different is investing in mutual funds and equities?

Investing in mutual funds is a form of indirect investing in the stock markets. Several financially savvy people invest in mutual funds and equities. They prefer to strike a balance between direct investing and indirect investing.

Direct Investing

Direct investing is the purchase individual stocks of companies on the stock exchanges. The stock exchanges include BSE, NSE or MCX in the case of commodities. However, mutual funds are groups of individual assets that have been tailored for specific purposes. These particular aims include saving tax, getting maximum dividends, etcetera. An investor can choose a professionally managed mutual fund depending on her/his risk appetite and financial goals. Thus, you as the investor need not divide up your funds to directly purchase individual stocks. Buying mutual funds is a way to remain indirectly invested in multiple companies.

Difference between mutual funds and equities

Equities are stocks of each company available for direct purchase. These equities can be bought from stock exchanges. On the other hand, mutual funds are a group of individual stocks that are handled professionally by fund managers. The fund manager decides which stocks to invest in and when. However, equity investment is entirely the investor or trader's decision. You as the investor decides which equity to invest in and when to sell it.

Open a demat account and start investing with the Upstox Mutual Funds platform. Browse through more than 2,000 mutual funds available on Upstox. You can trade in equities using the Upstox Pro Web and Upstox Pro Mobile platforms.

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