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What is systematic transfer plan?

Updated: 8/17/2019
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8y ago

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A plan wherein investor systematically transfers some specified amount from one fund to another fund. Normally, an investor goes through this route to transfer in a phased manner from fund of one category (like from Debt/liquid) to fund of other category (like Equity/Diversified) or vice versa.

Unlike SIP or lump sum investment, it entails the benefit of receiving two-way returns instead of mere investing in a particular fund only. For example, an investor can achieve returns on his liquid investment (where he is invested lump sum) along with systematically allocating SIPs to Equity Fund (where he is transferring his STP) and earning returns on equity portion too.

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