Yes, mutual funds are affected by the stock market. As the disclaimer goes, Mutual fund investments are subject to market risks. Hence investors should be mindful while selecting and investing in a fund. In other words, mutual funds invest the money pooled from investors across different asset classes. Equity mutual funds primarily invest in shares or stocks of companies. Therefore, any price fluctuation in these shares will have an impact on the fund's NAV. Stock market fluctuations have an impact on mutual funds though they may not be very high as a mutual fund is a collection of many shares and stocks.