Will the equity market fluctuations affect the debt funds too

As we see the market is high. I wanted to know does this market affects the investment of mutual fund? If yes, is it affect all types of mutual funds or just equity mutual funds only? In my previous question you advice me to go with STP route for lump sum investments (mostly liquid to equity). If we invest lump sum in debt should we follow the same STP (if market affects debt fund too) or we can invest in debt fund in one shot?

May 4, 2017 by Dipa A, Gujarat | Mutual Fund

The fluctuations in stock market have a direct co-relation to equity Mutual Funds as these funds invest in equities traded in the stock market. Therefore, it will affect your mutual fund investments. However, it will not affect all category of funds. For example - the stock market movement will not affect the debt funds and will affect only the equity funds or equity oriented mutual funds, like balanced funds or hybrid debt funds.

As the stock market movements affect only the equity funds, you can invest the lump sum in debt funds/ liquid funds in one shot.

STP is suggested to benefit from market fluctuation as its averages the acquisition cost of units in a scheme.

Hope this helps you! Thanks for writing to Advisorkhoj !!

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