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India Today
07-08-2025
- Business
- India Today
Why STP and SWP matter more than SIP, explains stock market expert
When it comes to investing, most people have heard of SIPs (Systematic Investment Plans). They're easy to set up, simple to explain, and popular among new investors. But according to investor and stock market expert, Rajnish Mehan, it's not just the SIP that matters. It's the other two tools, STP (Systematic Transfer Plans) and SWP (Systematic Withdrawal Plans), that can quietly define your financial wrote on LinkedIn, 'In investing, the first and the last step often decide the whole journey. That's why STP and SWP matter more than most investors realise.' WHAT IS STP?STP is designed for situations where you have a large amount of money, say, from a fixed deposit maturity or property sale, but don't want to put it all in the market at once. The idea is to spread the risk by moving the amount gradually from a low-risk fund to equity. For instance, let's say your fixed deposit of Rs 10 lakh matures. Instead of investing the entire sum into equity funds in one go, you could park it in a liquid or debt fund and set up an STP. This way, around Rs 83,333 is transferred each month into an equity fund over a 12-month explains, 'STP builds discipline at the point of entry.' This approach protects you from investing everything during a market high, giving your money a better chance to grow ABOUT SWP?On the other end of the investment journey lies the SWP. This is more about creating a steady, reliable income, especially useful for retirees. Instead of withdrawing the entire investment, you set up fixed monthly withdrawals while the rest of your corpus stays say someone has a retirement corpus of Rs 1 crore. By setting up an SWP of Rs 50,000 a month, they get Rs 6 lakh a year in predictable income, while the rest of the money remains invested and continues to generate returns.'The purpose here is not growth, but predictable income,' Mehan points out. 'SWP builds sustainability at the point of exit.'TAX RULES TO KEEP IN MINDBoth STP and SWP come with their own tax rules. For STP, each monthly transfer is treated as a redemption from the original debt or liquid fund. So every time money is moved, there's a tax event, and the gains are taxed as per your income slab, no matter how long the money has stayed in the works a bit differently. Each withdrawal includes both the capital and the gains. Tax applies only to the gains, and the rate depends on how long you've held the investment. For equity funds, if the units withdrawn have been held for over a year, gains beyond Rs 1.25 lakh are taxed at 12.5% under long-term capital gains (LTCG).Mehan cautions that 'the nuance lies in how these cash flows interact with your long-term plan, not just in the headline tax rate.'WHY BOTH TOOLS MATTERSIPs help you enter the world of investing. But STPs and SWPs help you navigate it wisely, especially when you have a big lump sum to invest or need steady income without eating into your entire savings.'Together,' Mehan sums up, 'they complete the investing cycle. Because in the end, investing is about building a structure where money works for you when you need growth, and supports you when you need pension.'- EndsMust Watch
Time of India
04-08-2025
- Business
- Time of India
Nifty slips into consolidation: What is the right strategy for mutual fund investors now?
Live Events With the benchmark index - Nifty50 entering a consolidation phase after witnessing a rally in the first half of the year and making mutual fund investors wondering whether to go for SIP , lumpsum or wait, market experts recommends that this is a good time to continue or even increase the SIPs, especially if your income has grown as SIPs work best during volatile or sideways markets, helping you accumulate more units at lower NAVs.'If you have surplus funds, avoid deploying them all at once in equities, especially amid ongoing global uncertainties. A better approach is to stagger lump-sum investments using Systematic Transfer Plans (STPs) from a liquid or low-duration debt fund into equity funds over 6-12 months,' Vishal Dhawan, CEO of Plan Ahead Wealth Advisors, a wealth management firm in Mumbai, shared with expert in addition to this mentioned that SIPs are the perfect route to take market exposure without worrying about the risk of market timing.'SIPs are the perfect route to take market exposure without worrying about the risk of market timing. Investors should continue with their SIPs as trying to time the market more often than not results in poor portfolio outcomes,' Kaustubh Belapurkar, Director - Manager Research, Morningstar Investment Research India told the first half of the current calendar year, Nifty50 went up by 7.47%. In July 2025, the index corrected 3% and closed at a level of 24,768 on July 31 against a close of 25,541 on July 1. On July 28, the benchmark closed at a level of 24,680As Nifty went down by 3% in July, Dhawan recommends that for investors using the SIP route, such market dips are actually advantageous, as they allow accumulation of more units at lower NAVs through rupee cost averaging and minor corrections like this should not be a reason to pause or alter SIPs as equity mutual fund investments are designed for long-term wealth this consolidation phase, portfolio allocation should always be guided by the investor's risk appetite and financial goals is what Dhawan believes and also recommends that for an investor with a moderate risk profile, a well-balanced allocation could be a combination of equity mutual funds (large-cap, flexi-cap, and international funds), hybrid funds, including categories like balanced advantage, some debt funds for capital preservation and stability, and a small exposure in commodities such as gold and silver, which offer a hedge during a market experts always recommend that investors should always invest according to their risk appetite, investment horizon, and financial goals as no two investors have the same goals, investment horizon, and risk tolerance a similar opinion, Belapurkar recommends that investors need to continue following a disciplined asset allocation approach and each investor's asset allocation is unique, which is driven by their risk return objectives and investment time horizon so if their current portfolio allocation is misaligned from their strategic asset allocation, it would be a good time to realign their are various options available among equity and equity oriented funds which provide stability to investors during the volatile market. Mostly, large-cap mutual funds and flexi-cap funds are considered more suitable by market experts during this phase whereas on the hybrid side, balanced advantage, multi asset allocation, and dynamic asset allocation funds are considered to Belapurkar, investors should continue to invest in a judicious mix of funds investing across the capitalization curve, with a core holding in large and flexi caps funds and he has also observed that many investors are significantly overallocated to small and mid cap funds due to the rally in these stocks since covid, therefore it would be prudent to prune exposure in these segments to strategic asset allocation levels depending on their individual risk tolerance and investment time the other hand, Dhawan lists hybrid fund categories as well where investors can consider investing during this volatile or consolidation period. He shares categories where investors should make investments and where they should reduce during periods of market consolidation , investors can consider hybrid fund categories such as balanced advantage funds or multi-asset funds, which dynamically manage equity, debt, and sometimes commodities like gold for lumpsums, Dhawan next he lists banking and financial services funds as a suitable option for investment as the sector currently appears attractive and has underperformed in the recent rally due to concerns around credit-deposit growth divergence, softening net interest margins, and asset quality pressures.'These headwinds may ease soon, with the RBI's supportive liquidity stance and strong macroeconomic conditions offering a positive outlook. With banking sector valuations below historical averages, it may be a good time for investors to consider banking and financial services funds for a balance of stability and growth,' Dhawan cautioning investors on sectoral, mid cap, and small cap funds, Dhawan said that sectoral funds carry concentrated risks and are best suited only for seasoned investors and we do not recommend allocating more than 5-10% of one's total mutual fund portfolio to any single sectoral fund and lastly investors should exercise caution with small-cap and mid-cap mutual funds as these segments have witnessed a sharp rally over the past few quarters, leading many portfolios to become overweight relative to their original asset allocation and reducing exposure in these two categories is July, among the diversified equity categories, flexi cap funds lost 1.94% and the multi cap funds lost 1.76%.Going forward, the expert from Plan Ahead Wealth Advisors believes that valuations across Indian equities remain elevated compared to historical averages, especially in the midcap and smallcap segments, which have seen sharp rallies in recent quarters and given this backdrop, large-cap stocks and defensive sectors may offer more favourable risk-adjusted returns, particularly if market volatility risks, including geopolitical tensions and the trajectory of US Federal Reserve policy, alongside domestic events such as state elections, may lead to intermittent corrections—potentially creating entry points for long-term investors and with inflation showing signs of stability, short-to-medium duration debt funds are better positioned to benefit from the current rate cycle, offering a balanced combination of yield and lower interest rate should always consider risk appetite, investment horizon, and goals before making any investment decisions.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle.
Mint
16-07-2025
- Business
- Mint
Will your SIPs and EPF get you to ₹10 crore in 15 years?
I've been investing in mutual funds through SIPs and some lump sum amounts. Currently, my mutual fund portfolio is worth ₹ 31 lakh. I contribute ₹ 62,000 per month via SIPs, mostly in mid- and small-cap funds. I also tried direct stocks but prefer mutual funds—currently have ₹ 4 lakh in stocks. Additionally, I have ₹ 50 lakh in EPF, with a monthly contribution of ₹ 34,000. My goal is to build a corpus of ₹ 10 crore in the next 15 years, to fund my retirement and my two children's education. Am I on the right track? Based on your current equity and EPF investments and monthly contributions, your corpus is likely to reach around ₹ 6 crore in 15 years. This estimate assumes annual returns of 12% from equities and equity mutual funds; and 7% from EPF. To reach your ₹ 10 crore goal, you'll need to increase your monthly investments. If possible, adopt a step-up SIP strategy, increasing your SIP amount by around 12% each year. This method allows you to adjust with your income growth and maintain cash flow flexibility while moving closer to your target. Your current SIPs are heavily focused on mid- and small-cap funds. While these have performed well recently and can offer higher returns, they also carry more risk. Given your long-term horizon, you should consider diversifying by adding large-cap or flexi-cap funds to your portfolio to manage risk better. As for lump sum investments, timing matters. Many investors recently chose to park funds in liquid or arbitrage funds and used Systematic Transfer Plans (STPs) over 6–9 months into equity funds. This approach helped them average out costs amid market volatility. Whatever strategy you adopt, continue your SIPs consistently—regardless of market conditions.
Time of India
12-06-2025
- Business
- Time of India
Midcap mutual funds deliver 19% return in 3 months. Check top performers
In May, the midcap funds received an inflow of Rs 2,808 crore, witnessing a decline of 15% month-on-month from an inflow of Rs 3,313 crore in April. Midcap mutual funds delivered an average return of 18.77% over the past three months, outperforming all equity fund categories. However, investor inflows declined for the second straight month in May, reflecting caution over high valuations and market volatility. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Despite delivering the highest average return of approximately 18.77% over the past three months—topping all equity mutual fund categories—midcap mutual funds saw a decline in investor interest. Monthly inflows into the category fell by 15% in May, following a 4% drop in April, an analysis by ETMutualFunds expert noted that the analysis points to rising investor caution, driven by concerns over high valuations and market volatility. Despite strong gains in the mid-cap index over the past quarter, many investors seem to be booking profits or adopting a wait-and-watch approach, wary that the segment may be overheating.'This decline in inflows despite performance suggests that investors may perceive current mid-cap valuations as stretched. Heightened geopolitical uncertainties and stretched market valuations are prompting a shift in preference towards safer large-cap or hybrid categories. It may also indicate a sophistication among retail investors,' Adhil Shetty, CEO, shared with were around 22 categories in the said period, of which midcap funds ruled the return chart. Out of 29 funds in the midcap category, Invesco India Midcap Fund offered the highest return of 23.99% in the last three the same period, HSBC Midcap Fund delivered a return of 23.06%, followed by Edelweiss Mid Cap Fund with 21.06%, and Mirae Asset Midcap Fund with 20.75%.Kotak Emerging Equity Fund, the second-largest midcap fund based on assets managed, delivered a return of 19.88% in the last three months. HDFC Mid-Cap Opportunities Fund , the largest midcap fund based on assets managed, delivered a return of 17.34% in the mentioned period. SBI Magnum Midcap Fund offered the lowest return of 13.54% in the last three on the performance of midcap funds, the expert noted that given the sharp rally in midcap stocks and increasing market volatility, lump-sum investments in this segment involve higher timing risks. For long-term investors, a staggered approach through midcap SIPs (Systematic Investment Plans) or STPs (Systematic Transfer Plans) continues to be the most prudent strategy.'SIPs help average out costs over time and reduce the risk of entering at market peaks—an important consideration given that mid-caps tend to be more sensitive to market corrections. While a short-term correction may happen, trying to time the market precisely is notoriously difficult. Therefore, disciplined investing via SIPs/STPs over the next 12–18 months can help build exposure without chasing short-term highs,' Shetty further shared with May, the midcap funds received an inflow of Rs 2,808 crore, witnessing a decline of 15% on a monthly basis from an inflow of Rs 3,313 crore in April. The inflows in April were down by 4% from the inflow of Rs 3,438 crore in investors adopting a cautious approach and the category witnessing a decline in inflows for two consecutive months, Shetty shares that the outlook for mid-cap funds over the medium to long term remains constructive, especially for investors with a 5-year-plus believes that with India's economic recovery gaining momentum, earnings growth in the midcap segment is likely to remain strong, driven by structural themes such as the manufacturing push, rising domestic consumption, and a revival in capital expenditure.'However, short-term headwinds such as global interest rate uncertainty, oil prices, and election-linked volatility may trigger intermittent corrections. Valuations are above historical averages, which warrants caution. Hence, future returns may moderate from recent highs,' he should always invest based on their risk appetite, investment horizon, and goals.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle.
Economic Times
12-06-2025
- Business
- Economic Times
Midcap mutual funds deliver 19% return in 3 months. Check top performers
In May, the midcap funds received an inflow of Rs 2,808 crore, witnessing a decline of 15% month-on-month from an inflow of Rs 3,313 crore in April. Despite delivering the highest average return of approximately 18.77% over the past three months—topping all equity mutual fund categories—midcap mutual funds saw a decline in investor interest. Monthly inflows into the category fell by 15% in May, following a 4% drop in April, an analysis by ETMutualFunds expert noted that the analysis points to rising investor caution, driven by concerns over high valuations and market volatility. Despite strong gains in the mid-cap index over the past quarter, many investors seem to be booking profits or adopting a wait-and-watch approach, wary that the segment may be overheating.'This decline in inflows despite performance suggests that investors may perceive current mid-cap valuations as stretched. Heightened geopolitical uncertainties and stretched market valuations are prompting a shift in preference towards safer large-cap or hybrid categories. It may also indicate a sophistication among retail investors,' Adhil Shetty, CEO, shared with ETMutualFunds. Also Read | Mutual fund SIP stoppage ratio slows down to nearly 72% in May There were around 22 categories in the said period, of which midcap funds ruled the return chart. Out of 29 funds in the midcap category, Invesco India Midcap Fund offered the highest return of 23.99% in the last three months. In the same period, HSBC Midcap Fund delivered a return of 23.06%, followed by Edelweiss Mid Cap Fund with 21.06%, and Mirae Asset Midcap Fund with 20.75%.Kotak Emerging Equity Fund, the second-largest midcap fund based on assets managed, delivered a return of 19.88% in the last three months. HDFC Mid-Cap Opportunities Fund, the largest midcap fund based on assets managed, delivered a return of 17.34% in the mentioned period. SBI Magnum Midcap Fund offered the lowest return of 13.54% in the last three on the performance of midcap funds, the expert noted that given the sharp rally in midcap stocks and increasing market volatility, lump-sum investments in this segment involve higher timing risks. For long-term investors, a staggered approach through midcap SIPs (Systematic Investment Plans) or STPs (Systematic Transfer Plans) continues to be the most prudent strategy.'SIPs help average out costs over time and reduce the risk of entering at market peaks—an important consideration given that mid-caps tend to be more sensitive to market corrections. While a short-term correction may happen, trying to time the market precisely is notoriously difficult. Therefore, disciplined investing via SIPs/STPs over the next 12–18 months can help build exposure without chasing short-term highs,' Shetty further shared with May, the midcap funds received an inflow of Rs 2,808 crore, witnessing a decline of 15% on a monthly basis from an inflow of Rs 3,313 crore in April. The inflows in April were down by 4% from the inflow of Rs 3,438 crore in March. Also Read | Gold ETFs see inflows of Rs 292 crore in May after two straight months of outflows With investors adopting a cautious approach and the category witnessing a decline in inflows for two consecutive months, Shetty shares that the outlook for mid-cap funds over the medium to long term remains constructive, especially for investors with a 5-year-plus believes that with India's economic recovery gaining momentum, earnings growth in the midcap segment is likely to remain strong, driven by structural themes such as the manufacturing push, rising domestic consumption, and a revival in capital expenditure.'However, short-term headwinds such as global interest rate uncertainty, oil prices, and election-linked volatility may trigger intermittent corrections. Valuations are above historical averages, which warrants caution. Hence, future returns may moderate from recent highs,' he shared. If you are looking for recommendations, see Best mid cap mutual funds to invest in June 2025One should always invest based on their risk appetite, investment horizon, and goals. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle.
