STP IN MUTUAL FUND

POSTED BY Gotu ON February 28, 2013 8:03 pm COMMENTS (8)

Dear all,

I have SIP running in below funds:

1. Franklin india bluechip: direct
2. Quantum LT
3. IDFC premier equity plan A

Now I want to move some lumpsum amount to debt of above AMC’s and then do a STP to above funds.

I have below questions:

1. Can I do STP from any debt fund to any equity fund of same AMC?
2. Some debt funds attract exit load if redeemed within certailn period. Does it is applicable if I do STP before such a lock in period?
3. Suggest some good debt funds from above AMC’s.
4. Earlier I use to do my MF investments through fundsindia and had VIP as well as flexi SIP. Now i am moving to direct modes. Is it possible to do VIP or flexi SIP kind of a thing in direct mode?
Thanks.

  • 8 replies on this article “STP IN MUTUAL FUND”

    1. Gotu says:

      Thanks Ashal. Much more clear now.

    2. Dear Gotu, for 6month term, how much risk can you afford? If you can afford, why not Eq. fund than? If you feel Short term or long term debt funds are ok with your time horizon, so be it. You may Invest but do tell me how much difference of return can you arrange after the impact of STCG tax? For the given time frame, liquidity & safety of my capital is important to me, hence I w’d prefer Liquid fund over short or long term debt fund. That’s my personal choice, you are free to have your own. As simple as that. 🙂

      Thanks

      Ashal

    3. Gotu says:

      Hello Ashal,

      My understanding is liquid funds are for very very short term(a month oe two). If one wants to take some risk then one can opt for other debt funds.
      Pl. clarify if I am wrong.

      Thanks.

    4. Dear Gotu, if your goal is within 6 months’ duration why not Liquid fund should be there?

      Please explain with your logic.

      Thanks

      Ashal

    5. Gotu says:

      Thanks Ashal for the detail explaination to my questions. Regarding your querry on question 3 above:

      I have planned most of my equity investments in Franklin India Bluechip and Quantum LT(with some exposure to midcap through IDFC premier). I have my emergency fund in Autosweep saving a/c + regular saving a/c. I have 1.5 L emergency fund. Besides this I have additional 2L with me. I am also going to get 2L additional income in next 3 months.
      Most of this additional amount is going to be utilised for a short term goal which is 6 to 9 months away. So the new debt funds will be utilised to park part of this amount as well as for STP in long term view. (Remaining amount for short term goal will go to FD)
      This is the reason I am asking for debt fund and not liquid fund.(Of course I dont have option with Quantum AMC).
      Also I am planning to put part of emergency fund in these debt funds. Pl. comment over my thought process.
      (I have shortlisted Quantum Liquid and Templeton short duration fund).

      Thanks again.

    6. Dear Gotu, I’m trying to answer your query.

      1. Can I do STP from any debt fund to any equity fund of same AMC?
      Yes is the answer, as long as STP is allowed by that debt fund & accpeted in the Eq. fund of your choice.

      2. Some debt funds attract exit load if redeemed within certailn period. Does it is applicable if I do STP before such a lock in period?
      Yes, each redemption ‘ll be considered for exit load if there is any & based upon your holding period, the same ‘ll be levied if applicable.

      3. Suggest some good debt funds from above AMC’s.
      Before suggesting debt funds, I w’d like to know, how much money is at stake?

      4. Earlier I use to do my MF investments through fundsindia and had VIP as well as flexi SIP. Now i am moving to direct modes. Is it possible to do VIP or flexi SIP kind of a thing in direct mode?
      Please check with respective AMCs, in all probability you w’d have to do it manually each time (VIP or VTP). Flexi SIP or Flexi STP is possible in some AMCs.

      Thanks

      Ashal

    7. Exit load for debt funds applicable for STP also.
      considering exit loads as well risk in debt funds one should choose liquid fund over debt fund for stp.
      Rest rather than flexi sip,I think strategy of fixed SIP + value averaging will more effective.

    8. Gotu says:

      Dear all,
      I have SIP running in below funds:
      1. Franklin india bluechip: direct
      2. Quantum LT
      3. IDFC premier equity :Plan A
      Now I want to move some lumpsum amount to debt of above AMC’s and then do a STP to above funds.
      I have below questions:
      1. Can I do STP from any debt fund to any equity fund of same AMC?
      2. Some debt funds attract exit load if redeemed within certailn period. Does it is applicable if I do STP before such a lock in period?
      3. Suggest some good debt funds from above AMC’s.
      4. Earlier I use to do my MF investments through fundsindia and had VIP as well as flexi SIP. Now i am moving to direct modes. Is it possible to do VIP or flexi SIP kind of a thing in direct mode?
      Thanks.

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