what is the role of equity funds in the performance of mutual funds?

Question

equity funds VS other stocks in the performance of mutual funds

Answer 1

mutual fund performance it tied directly to the equities it holds. A debt fund peformance is tied to interest rates only and has a basic fixed return assuming interest rates stay unchanged. The equities a fund holds however account for all of its performance either up or down. The performance may come from people bidding up the values of the equities because they are bullish or bidding down the values because they are bearish. Or it may come from the inproved earnings of the underlying equities. In very bullish markets, equities may increase in value 50%. In very bearish markets, equities may decrease in value 50%. Debt based funds normally show more limited returns, but during inflationary times debt based funds may loose significant value as their underlying debt investments loose value.

Answer 2

Equity Funds is also known as stock funds. It invest all your money in the equity market. In general, it divided to income funds and growth funds.To learn out more, check out the following link.

http://financialindependent.blogspot.com/2007/01/stock-funds.html