What are equity diversified funds and its advantages and disadvantages?

When the term "fund" is used, it typically means it is a form of mutual fund. The other two terms explain the way that the mutual fund is investing. "Equity" tells you that the mutual fund is investing in the stock of companies, which is called equity. This differentiates it from those funds that may invest in bonds or another strategy. "Diversified" should reflect that the fund is investing in companies from a broad range of sectors. For example, financial, energy, health care and others sectors all in one fund. However, diversified can also mean a number of different companies all in one sector - i.e.: just bio tech stocks. Fortunately the mutual fund you are reviewing should spell it out, up-front exactly how and where it invests. Keep in mind that this is your money, so read up and ask questions. Good Luck!