what's the difference between an index fund and and equity fund?

Question

I have a little money that I'd like to invest. The stock market is an option I am looking into. I'm a neophyte at this thing and trying to learn the ropes.
I read that index fund is a more secure investment and am seriously considering it. Then during the course of my reading I came across an equity fund.
I would just like to know the difference between these two types of fund.
Where should i put my money on, an index or equity fund?
any information that can shed light on this matter would be of great help. Thanks a lot.

Answer 1

They are different ways of classifying funds.  A given fund might be an equity fund, an index fund, both, or neither.

'Equity' refers to what the fund contains.  Equity means stocks.  It may hold US Stocks, european stocks, stocks from all over the globe, etc.  Alternatives to an 'Equity' fund would be bond funds, REIT funds, etc.  Equities tend to have higher returns over time then bonds or cash, but are also more volatile.  If you are investing with a long time horizon, you should probably have most of your money in equity funds.

'Index' fund refers to how the fund management company selects the securities (whether that is stocks, or bonds, etc) within the fund.  In an 'active' fund, the fund manager tries to select securities that they believe will do better then average.  In a 'passive' or 'index' fund, the fund management company simply buys every security in that 'realm'.  So if we are talking about, for example, the 'realm' of the 'S

Answer 2

Index fund spreads your money across an index of 100, 500, 2000, or 3000 or so different companies.

Equity fund I believe invest in a smaller number and trades more frequently.

Stick your money in an S

Answer 3

An index fund means the fund holds the same percentage of stock of the given index.  For example,  S