Equity funds are investment funds that invest exclusively or predominantly in shares. If one acquires individual shares, one thereby buys shares of a company. In the case of an equity fund, the capital is invested in a share portfolio that is managed by professional fund managers. They invest the investors’ capital in different shares.
There are different types of equity funds. For example, some funds focus on themes or industries, others focus on specific regions.
There are also passive equity funds, known as ETFs. With an ETF, there is no need for fund managers. So there is no professional manager who puts the fund together with different stocks. With a passive equity fund, investments are made in an entire stock market index.