Difference between Equity and Debt fund | Mutual Funds Sahi Hai
1. difference between debt and equity 2. difference between Equity and Debt fund
What is the difference between Equity and Debt mutual fund?
Equity and debt are the two major types of mutual funds. The significant difference between debt and equity is that the investors choose to invest in equity shares and other related securities in the former case, whereas, they invest in government securities, corporate debentures, and other such debt instruments in the latter case.
While equities have the potential to deliver higher returns in the long term, debt funds deliver returns in line with the inflation or marginally higher than that. Another major difference between equity and debt fund is that equities could be relatively volatile in the short term, whereas, debts are less volatile in the short term mostly.