Money word, in plain English ← Back to all terms
Equity
Ownership in a company. Shares are equity, and equity funds invest mainly in shares.
Example. An equity fund holding 40 companies spreads your ₹5,000 across all of them.
Equity means a stake in a business rather than a loan to one. Returns come from the business growing and, sometimes, from dividends. There is no promised return and no maturity date, which is why equity swings far more than debt in the short run and has historically rewarded patience over long periods. Money you need within a few years does not belong here.
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