Saturday, February 18, 2012

HDFC MF Launches Swing STP

HDFC Mutual Fund has launched HDFC Swing STP which is the expansion of STP facility, with effect from February 21, 2012.

It works like any other Systematic Transfer Plan (STP). The only difference is that Swing STP tries to achieve the Target Market Value which can be more or less than the lumpsum invested in debt scheme. So, everytime, it transfers the amount from one scheme to another (must be growth Plan) based on the difference between Target Market Value and Actual Market Value of current holdings.


The minimum balance or minimum investment amount must be Rs.12000 for this.
The minimum installment amount would be Rs.1000/- for weekly, monthly and Rs.3000/- for quarterly.

Everytime, the amount will be calculated as {(first installment amount*No. of installment including current)-Market value of equity investments}.

The most unique thing about Swing STP is Reverse Transfer. In case, Actual Market Value of current holdings is more than Target Market Value, it will transfer the difference from equity to debt scheme in order to maintain Target Market Value.

At the time of last installment, the remaining balance would be transferred and Swing STP will be closed.


Source: www.valueresearchonline.com

Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd

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