Equity and Debt mutual funds are the basic component of a good resilient MF portfolio. The characteristics of each type are stated below: 

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Equity Mutual Funds: Through equity mutual funds, investors get an indirect ownership and hence long-term profit share in the largest companies in the country including household names like Hindustan Unilever, ITC, HDFC, ICICI, Maruti Suzuki, TCS, Infosys and Reliance (Jio) to name a few. Investor returns from equity mutual funds are directly linked to the profit growth (or expected profit growth) in the invested companies over the long term as well as active selection of fund managers to choose companies with high growth prospects. Managers also invest in initial offerings of emerging companies. 

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Debt Mutual Funds: Debt funds on aggregate provide long as well as short-term financing to the Government of India, banking and financial institutions, infrastructure companies and corporates. Thus investing in mutual funds contributes to nation building and also provides investors a reasonable return on investments after inflation.