What are equity investments?

An equity investment is money that is invested in a company by purchasing shares of that company in the stock market. These shares are typically traded on a stock exchange.

Why should I consider equities?

Equity investors purchase shares of a company with the expectation that they’ll rise in value in the form of capital gains, and/or generate capital dividends. If an equity investment rises in value, the investor would receive the monetary difference if they sold their shares, or if the company's assets are liquidated and all its obligations are met. Equities can strengthen a portfolio’s asset allocation by adding diversification.

What are the potential benefits of equity investments?

• The main benefit from an equity investment 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 typically for a minimum initial investment amount.
• If an investor wanted to achieve the same level of diversification as an equity fund, it would require much more – and much more manual – capital investment.
• Investors may also be able to increase investment through rights shares, should a company wish to raise additional capital in equity markets.

Why invest with BlackRock?

• BlackRock offers a broad selection of equity offerings across index funds and factors (through iShares^® ETFs) and active strategies through mutual funds and SMAs. 
• BlackRock is a leader in ETF and factor investing, complemented with a strong active franchise. 
• BlackRock offers competitively priced products across equity market exposures.

What are popular investment strategies?

BlackRock offers three distinct approaches to enhanced equity investments:

How can I invest in equities?

Separately managed accounts (SMAs) give investors the opportunity to build equity portfolios through a personalized and flexible approach. BlackRock offers a range of equity SMAs and model portfolios for financial advisors.

What risks are associated with equity investments?

While there are many potential benefits to investing in equities, like all investments, there are risks as well. Market risks impact equity investments directly. Stocks will often rise or fall in value based on market forces. As a result, investors can lose some or all of their investment due to market risk.

Other types of risk that can affect equity investments include:

• Credit risk: a company could be unable to pay its debt.
• Foreign currency risk: a company’s value could change because of shifts in the value of different international currencies.
• Liquidity risk: a company could be unable to meet its short-term debt obligations.
• Political risk: a company’s returns could suffer because of a country’s political changes or instability.
• Economic concentration risk: a company’s value could drop because it’s too concentrated in a single entity, sector or country (putting all its eggs in one basket). If the value of that factor drops, the company will get hurt disproportionately.
• Inflation risk: a company’s value could drop because it’s hurt by rising inflation, thus diluting its worth.