An equity fund is an investment fund that pools the money of multiple investors and invests it in shares. Instead of buying individual shares yourself, you invest through the fund in a collection of companies. This gives you diversification across multiple shares in one step.

An equity fund is managed by a professional fund manager.

The manager decides which shares are bought and sold within the fund. The objective may be, for example, to outperform a specific index or to invest within a particular region or sector. Because the fund invests in multiple shares, the risk is spread across different companies. You usually pay management fees for this service. An equity fund differs from an ETF because it is often actively managed and is not continuously traded during the trading day at a fluctuating market price.

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