· Consistent return –
Returns in STP are pretty consistent as money invested in debt fund earns interest till the time it is transferred to equity fund.
· Averaging of cost –
STP has some integral features of Systematic Investment Plan (SIP). Similar to SIP every month an amount is invested in an equity fund, so benefit rupee cost averaging.
· Rebalancing portfolio –
An investor’s portfolio will be balanced between equity and debt.
· Power of Compounding –
Like SIP, Systematic Transfer Plans too facilitate power of compounding.
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