How can I use a single liquid fund for an STP in different fund houses?
Dhirendra Kumar tells how to invest in a single liquid fund and still invest that money with different fund houses
By Research Desk | Nov 8, 2018
I am 50 years old. I have invested in six mutual fund schemes, namely, Aditya Birla Sun Life Equity, Aditya Birla Sun Life Money Manager, L&T Tax Advantage, Reliance Equity Hybrid, Reliance Large Cap and SBI Blue Chip. Please tell me if it is a diversified portfolio? My investment horizon is of 10 years. Also, if I want to invest through STP in equity funds with different fund houses, do I need to first invest in multiple liquid funds with multiple fund houses?
You should simplify your portfolio. And from that perspective, only two-three multicap funds are sufficient. You can do without the largecap fund. It is not necessary to invest in multiple liquid funds if you want to invest through Systematic Transfer Plan (STP) in equity funds of different fund houses. You can simply use MF utility or directly invest in just one good liquid fund. Subsequently, set up a Systematic Withdrawal Plan (SWP) to your bank account and an SIP in an equity fund of your choice. You will have to give the instructions once and then the money will come to your bank account automatically every month for the SIP. So, you may consider investing only in one liquid fund and set up an SWP along with SIP, instead of going through the STP route. STP is nothing but a combination of SWP and SIP.