With elections around the corner and volatility in equities likely to be high, money managers believe investors should stagger their investments into equity mutual fund schemes. Fund houses offer various options for staggered investments such as a daily, weekly or monthly systematic transfer plan (STP) from a debt-oriented scheme like a liquid fund or ultra-shortterm fund to the chosen equity fund.

WHEN SHOULD AN INVESTOR OPT FOR A SYSTEMATIC TRANSFER PLAN (STP)?

Investors who believe that the long-term earnings growth story is intact, but fear high volatility in the markets due to events such as elections or valuations being slightly ahead of fundamentals can use STPs. Typically such investors have lump sum money and want to invest in equity mutual funds, but in a staggered manner, and simultaneously earn a small return by investing in liquid/ultra short-term schemes.