Question of the Week: What are equity mutual funds?

Submitted by nsscadmin on Wed, 02/03/2021 - 11:14

We enter February with the next part in our series on different types of mutual funds. This week we’re looking at equity funds.

An equity fund is a mutual fund that invests primarily in stocks. Equity funds are also known in some circles as stock funds.

Equity funds have the potential to deliver higher returns than money market funds and fixed income funds, but thy come with higher risks and a greater potential for loss of investment.

There are different types of equity funds that may specialize in different types of stocks. This can include specializing in growth stocks, income stocks (dividend paying stocks), and large, mid, and small cap stocks.

Equity funds sometimes specialize in domestic (Canadian) stocks or international stocks. Equity funds can also specialize on specific industries, for example technology, energy, or specific commodities.

Be sure you know what type of equity fund you are purchasing before investing, and ensure they fall within your risk tolerance.

The Nova Scotia Securities Commission does not provide investment advice. We are not advising or recommending that investors purchase the mutual funds in our posts. The posts are simply to educate investors so they can be an informed investor when making investment decisions.

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Failure to file interim financial statements.
Failure to file an annual or interim management’s discussion and analysis (MD&A) or an annual or interim management report of fund performance (MRFP).
Failure to file an Annual Information Form (AIF).
Failure to file a certification of annual or interim filings required by Multilateral Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (MI 52-109).
Failure to file required proxy materials or a required information circular.
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Failure to file a business acquisition report.
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Failure to include disclosure in an issuer’s MD&A relating to disclosure controls and procedures and their direct effectiveness that is referred to in a certificate filed under MI 52-109.
Financial statements of the reporting issuer, or the auditors’ report accompanying the financial statements, do not comply with the requirements of NI 51-102 Continuous Disclosure Obligations (NI 51-102), National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106) or National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency (NI 52-107).
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The reporting issuer’s AIF, MD&A, MRFP, information circular, or business acquisition reports do not contain information for each of the content items required by NI 51-102 or NI 81-106.
The reporting issuer’s technical disclosure or other reports do not comply with the disclosure requirements of NI 43-101 or 51-101.
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