100% Equities Strategy

DEFINITION of '100% Equities Strategy'

An investment strategy for an individual portfolio or pooled funds vehicle such as a mutual fund. Only equity securities are considered for investment, whether they be listed stocks, over-the-counter stocks, or private equity shares. A mutual fund or ETF will often state a "100% equities strategy" in its prospectus to inform potential investors of the fund's overall risk profile.


BREAKING DOWN '100% Equities Strategy'

Equities are generally considered the riskier asset class over both bonds and cash, but historical returns have been higher as well. A well diversified portfolio of all stocks can protect against individual company risk or even sector risk, but market risks will still exist that can affect the equities asset class. All-stock portfolios will perform best when the underlying economy is growing (as measured by GDP) and inflation is low to moderate, as inflation diminishes the future cash flows of equities.


RELATED TERMS
  1. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
  2. Equity Fund

    A mutual fund that invests principally in stocks. It can be actively ...
  3. Holdings

    The contents of an investment portfolio held by an individual ...
  4. Stock ETF

    A security that tracks a particular set of equities, similar ...
  5. Mutual Fund Liquidity Ratio

    A ratio published monthly by the Investment Company Institute ...
  6. Crossover Fund

    An investment fund that has investment holdings in both public ...
Related Articles
  1. Mutual Funds & ETFs

    What's an Equity Fund?

    An equity fund is a mutual fund that mainly invests in stocks.
  2. Mutual Funds & ETFs

    Mutual Funds: Different Types Of Funds

    No matter what type of investor you are, there is bound to be a mutual fund that fits your style. According to the last count there are more than 10,000 mutual funds in North America! That means ...
  3. Mutual Funds & ETFs

    The Benefits of Picking Mutual Funds Over Individual Stocks

    Learn about the advantages of investing in mutual funds rather than individual stocks, including the benefits of affordability, oversight and diversification.
  4. Financial Advisors

    Mutual Funds: How Many is Too Many? (VTSMX, VBMFX)

    How many mutual funds are too many when it comes to a well diversified portfolio?
  5. Active Trading Fundamentals

    Understanding the Accounting of Private Equity Funds

    Read about private equity accounting and how it is different than that of other investment vehicles. The nature of private equity makes a difference.
  6. Mutual Funds & ETFs

    Trading Mutual Funds for a Living: Is It Possible?

    Find out why trading mutual funds for a living isn't your best bet, including how funds discourage short-term trading and which options may better serve you.
  7. Mutual Funds

    What mutual funds are: Professionally managed pools of stocks, bonds and/or other instruments that are divided into shares and sold to investors. Pros: Diversification; liquidity; simplicity; ...
  8. Mutual Funds & ETFs

    Digging Deeper: The Mutual Fund Prospectus

    The legal jargon of this document can be daunting. Find out how to get to the important stuff.
  9. Stock Analysis

    Forget About Mutual Funds: 5 Reasons You Should Invest in ETFs Instead

    After World War II, a new U.S. economy and the desire to put money away against another Great Depression drove the investing public to mutual funds. Today, more than 44% of U.S. households invest ...
  10. Mutual Funds & ETFs

    Will ETFs Eventually Replace Mutual Funds?

    Will mutual funds be replaced by ETFs? Possibly, but it's not too likely and probably not anytime soon.
RELATED FAQS
  1. How does the risk profile of private equity investments compare to those of other ...

    Learn how the risk profile of private equity investment compares to other asset classes and the aspects investors should ... Read Answer >>
  2. Can mutual funds invest in private equity?

    Learn about the mutual funds that invest in private equity by buying shares of investment holdings firms that specialize ... Read Answer >>
  3. What information does the SEC require in an investment company's prospectus?

    Understand the lengthy list of required information that investment companies such as mutual funds must include in a prospectus ... Read Answer >>
  4. Why are private equity investments usually reserved for rich people?

    Learn what investors without a high net worth can do to invest in private equity investments, and discover the benefits and ... Read Answer >>
  5. How are blue-chip stocks similar to mutual funds and exchange-traded funds (ETFs)?

    Understand the primary differences between making investments in blue-chip stocks, mutual funds and exchange-traded funds ... Read Answer >>
  6. Are mutual funds better than single stocks?

    Learn the advantages of investing in mutual funds over investing in individual stocks. These advantages include reduced risk ... Read Answer >>
Hot Definitions
  1. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  2. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  3. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  4. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  5. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  6. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
Trading Center