Why Equity Investment ?

Equity investors purchase shares in the expectation that they will rise in value in the form of capital gains and/or generate capital dividends from the company. Should an equity investment rise in value, the investor receives the monetary difference only through the sale of the held shares or if the company's assets are liquidated and all its obligations are met.

The main benefit from equity investments is the possibility to increase the value of the principal amount invested. This comes in the form of capital gains and dividends. An equity fund offers investors a diversified investment option for typically a minimum initial investment amount. To diversify a portfolio manually to the same extent that equity funds are diversified would require much more capital investment. Another potential benefit is to increase investment through rights shares should the company wish to raise additional capital.