Systematic Transfer Plan (STP)

In Systematic Transfer Plan (STP), funds are transferred periodically from source scheme to target scheme. Periodical transfers are usually made from debt funds to equity funds. Risk mitigation strategy enables the investors to get a risk-adjusted return. STP allows investors to give consent to a mutual fund to deploy funds at regular intervals. STP helps to rebalance portfolios by allotting investments between debt and equity or vice versa. Transferring a fixed amount at regular intervals of different unit costs and helps in rupee cost averaging.