Index Fund Corner
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| Scheme Name | 1-Year Return | Invest Now | Fund Category | Expense Ratio |
|---|---|---|---|---|
| Axis Nifty 50 Index Fund | +32.80% | Invest Now | Equity: Large Cap | 0.12% |
| Axis Nifty 100 Index Fund | +38.59% | Invest Now | Equity: Large Cap | 0.21% |
| Axis Nifty Next 50 Index Fund | +71.83% | Invest Now | Equity: Large Cap | 0.25% |
| Axis Nifty 500 Index Fund | — | Invest Now | Equity: Flexi Cap | 0.10% |
| Axis Nifty Midcap 50 Index Fund | +46.03% | Invest Now | Equity: Mid Cap | 0.28% |
Thus, it protects an investor’s interests during market fluctuations, limiting the losses incurred. Investors can consider an STP from an equity scheme to a debt scheme or reverse depending on the state of the market.
The primary benefit of an STP is the expedited procedure of fund transfer and utilisation. Investors can take advantage of the smooth and effective distribution of the available resources since the funds are automatically transferred between the chosen funds.
An STP mutual fund can only transfer an investor’s financial resources between several funds managed by a single asset management business, interchanging between multiple schemes offered by different companies is not possible.
Types of systematic transfer plans:
Flexible STP – This type of systematic transfer plan allows investors to choose the total amount to be transferred based on their immediate needs. An investor may decide to transfer a larger or smaller share of their existing fund, depending on market conditions and well-informed projections about a scheme’s performance.
Fixed STP – Under the fixed STP, the total amount transferred from one mutual fund to another is fixed and determined by the investor.
Capital systematic transfer plans – It transfers the total gains from a fund’s market appreciation to another promising scheme with strong growth potential.
Benefits of a Systematic Transfer Plan:
Higher returns: It allows you to increase your returns on investments by switching to a more profitable enterprise during market fluctuations. Gaining market advantage in this manner maximises profit from securities purchased and sold in the capital sector.
Taxability: The term taxability refers to the extent to which an investment’s returns are taxed. Different financial instruments like mutual funds, savings accounts, or shares, have different tax implications, which are determined by criteria such as the holding time, income levels and applicable tax slabs.
Optimal balance: Optimal balance in investment means the best asset mix for an investor based on their risk tolerance, financial goals and time horizon. Achieving this balance helps to reduce risks while increasing possible returns, resulting in a well-diversified portfolio with consistent growth.
Stability: During periods of high stock market volatility, investors can use an STP to shift funds into more stable investment schemes like debt funds and money market instruments.
Disciplined approach: It allows a disciplined and planned movement of funds between two mutual fund schemes.
Rupee cost averaging: Rupee Cost Averaging refers to an investment technique in which an investor invests a constant sum in a mutual fund regularly, regardless of market movements. This method averages the purchase cost across time, which helps to reduce the impact of market volatility on investments.