Equities are shares of ownership in a company. When you buy equities, also known as shares, you're effectively becoming a part owner of that business. The fortunes of that company will be reflected in its share price, so if it does well the value of your shares should rise.
As an investor, you can earn a return from shares in two ways:
Dividends are payments which usually represent a share of the company's profits. They're paid to the company's shareholders at fixed times of the year, and vary according to the company's business strategy and how well it's doing. This is because the company's board decides how much profit to pay out as a dividend to its shareholders, and how much profit to reinvest into the company to help future growth.
If you've invested in shares via an equities fund, dividends are paid to the fund, and in turn the fund pays dividends to the investors who hold shares in it. As an investor in a fund, you can choose how you want to receive your dividends:
If you're looking for greater potential for growth and you're willing to accept more risk, investing in a range of company stocks and shares can potentially provide better returns than a bank or building society could offer over the long term (5-10 years or more). MyM&G makes it simple and straightforward to do this, so you might find that investing in equities could be a way to meet your financial goals.
Please remember that the value of your investments can go down as well as up, so you might not get back the amount you put in. We are unable to give financial advice. If you are unsure about the suitability of your investment, speak to a financial adviser.
Long-term thinking lies at the heart of our expert fund managers' approach, and we focus on what really matters for equity investments: how companies work, and how they're valued on the stockmarket. This is our particular area of expertise, and we're committed to our goal of helping you to achieve a return on your investments.
In our view, the best returns from equity investments come from companies with clear ideas of where they're going, strong finances, and unique assets which their competitors don't have or are hard to replicate. Our fund managers always look for companies with experienced, trustworthy management teams and sound plans for future growth.
Like any investment, you should carefully consider if investing in equities fits with your personal aims and objectives before investing. Importantly, you should also check that the profiles of the funds match your own investment timeframe and appetite for risk and reward. You can find out more about the risks you need to consider before investing in our KIIDs.
Our equities funds are what we call ‘building block’ funds – funds that you should hold only as part of a wider investment portfolio. You should also consider creating what’s called a ‘diversified portfolio’, meaning an investment portfolio that is spread across a blend of asset classes like equities and bonds. As different asset types are likely to perform well at different times and in different market conditions, investing in a good mix means you won't have ‘all your eggs in one basket’ and could mean more consistent returns over the long term (so 10 years or more) too.
We are unable to give financial advice. If you are unsure about the suitability of your investment, speak to a financial adviser.
Find out more about diversification in our handy M&G Guide.
To see our full range of equity funds, click here and select Equities in the Asset class filter.