Suggest 2-3 funds for STP (debt -> equity)

[URPradhan]

Hi Friends

Please suggest 2-3 funds for STP (Systematic Transfer Plan)

I want to invest 4L in MFs as sump sum amount and will opt for debt -> equity STP plans. Hope in anyway I'll get more return than Bank FDs by this route of investment. I was waiting for bank FD rates will go up, but after RBI rates hike only few has come up with revised FD rates. Again I'm not impressed with those as I've already invested in SBI's 1000 days 10.5% FD.

So please suggest some good debt funds with good corresponding diversified equity funds from the same AMC for STP. There are so many debt categories, so I'm confused.

 

[yodlee99]

Just suggestions...
1) Invest in HDFC High Interest short term plan (STP) and start weekly Flex STP to HDFC Prudence/Top200.
2) Reliance Short term fund or Reliance Liquidity to Reliance RSF Equity
3) Birla Floating Rate Fund(FRF) Long term plan (LTP) to BSL Frontline equity plan A

I have started to like the Flex STPs that invest more when NAV of a fund goes down or when the sensex/NIFTY goes down. This has been proved to be better with slightly higher returns than simple STP. I am planning to set up my account in the future to be that way. Only a few fund houses like HDFC provide such value added services as of now.

 

[Nava]

Just suggestions...
1) Invest in HDFC High Interest short term plan (STP) and start weekly Flex STP to HDFC Prudence/Top200.
2) Reliance Short term fund or Reliance Liquidity to Reliance RSF Equity
3) Birla Floating Rate Fund(FRF) Long term plan (LTP) to BSL Frontline equity plan A

I have started to like the Flex STPs that invest more when NAV of a fund goes down or when the sensex/NIFTY goes down. This has been proved to be better with slightly higher returns than simple STP. I am planning to set up my account in the future to be that way. Only a few fund houses like HDFC provide such value added services as of now.

Hi,

Is it possible to do flex STP when we are buying through ICICI direct..?

 

[URPradhan]

Hope you guys understood STP = Systematic Transfer Plan

 

[kunalp123]

Just suggestions...
1) Invest in HDFC High Interest short term plan (STP) and start weekly Flex STP to HDFC Prudence/Top200.
2) Reliance Short term fund or Reliance Liquidity to Reliance RSF Equity
3) Birla Floating Rate Fund(FRF) Long term plan (LTP) to BSL Frontline equity plan A

I have started to like the Flex STPs that invest more when NAV of a fund goes down or when the sensex/NIFTY goes down. This has been proved to be better with slightly higher returns than simple STP. I am planning to set up my account in the future to be that way. Only a few fund houses like HDFC provide such value added services as of now.

Hi Yodlee99,

Thanks for your inputs...I am aware about SIPs but could you let me know that what exactly is an STP and what is the average return in case of STPs? (like for e.g. for SIPs we can state approx 15% if we select good funds).

Also, is there any facility in SIP like that in STP i.e. flex STP. Because then it would be very beneficial if the money is invested in SIP as per the market highs and lows, and not just a fixed amount as it is done currently.



Regards,
Kunal.

 

[yodlee99]

Kunal, I will let google help you in figuring out about STP (Systematic transfer plan) as it can do a much better job than me. Its a great way to invest when you have lumpsum money in hand that you want to invest in debt initially and transfer to equity a little bit every month. It is like a cousin to SIP and they work well together

Nava, as of now icicidirect does not have anything beyond simple SIP and STP. Ofcourse, you can check out on fundsindia.com and other such services who provide value-added services without charging you anything directly.

Pradhan, there are lots of liquid, liquid plus plans out there that I don't track. Besides the rules have been changed recently by SEBI. I have only mentioned a few that I am aware of personally.
Good luck!

 

[URPradhan]

@kunalp123
Read this small article and all your doubts in STP will be cleared.

My definition will be: STP is a SIP, where your monthly installment goes from your existing debt fund instead of from your bank.

 

[URPradhan]

What your comments for these debt funds with a STP to respective AMCs best diversified fund ?

1. IDFC SSI Medium-term Plan A
2. Birla Sun Life Dynamic Bond Ret
3. HDFC Multiple Yield Plan 2005

 

[yodlee99]

I would say, go as per your guts.. as your intention is to park lumpsum there and make STP into equity schemes.
Try
IDFC SSI Medium-term Plan A,
Birla Sunlife Short Term Fund or GSF Long-term or Dynamic Bond Ret
and ofcourse, HDFC High Interest Fund short Term Plan.

For others, you have to read up about it in valueresearchonline. There are lots of debt funds out there and I would prefer something where returns are good in the long run (3-5yrs) with a rating of atleast 4 or 5 in valueresearchonline and morningstarindia.
Even though these debt funds are safe which is a relative terminology, one could end up losing money (negative returns) for short term periods mainly when RBI raises interest rates.
http://new.valueresearchonline.com/story/h2_storyview.asp?str=14924

 

[yodlee99]

I forgot to mention that some of these debt funds have exit load if you redeem or even if you did STP. I think Birla Dynamic Bond fund has it for <1year, check out on others when you decide.
Pass on your final list of debt fund recommendations to everyone here so that we all can learn from each other.
Thanks!