Exploring the Difference Between Equity and Debt Mutual Funds

Mutual Funds pic
Mutual Funds
Image: investopedia.com

Offering portfolio management that meets clients’ specific objectives and risk tolerances, Salzinger Sheaff Brock, LLC, allocates assets through a pairing of ETF’s and no-load mutual funds. For those focused on maximizing growth, Salzinger Sheaff Brock targets exposure in areas that are likely to provide higher risk-adjusted returns.

Among the growth portfolio strategies are commodity, foreign and international funds, as well as equity and debt mutual funds. A combination of the latter two helps refine and balance the risk-reward dynamic. Debt mutual funds can encompass low-risk holdings in government bonds, as well as commercial issues, and company fixed deposits and debentures. While not offering guaranteed returns, they generally offer greater stability.

Equity funds, on the other hand, generally involve a portfolios of diversified investments in the stocks of companies operating in the industries targeted by the individual fund manager. Typically held as long-term investments,they do have more risk/reward exposure and are vulnerable to economic currents and price swings in ways that debt holdings are not.