What is Tata SIP Fund?
Tata SIP Fund is a refined version of systematic transfer plan (STP) offered by mutual funds. Investment expert Sandeep Shanbhag explains, “In an STP, a lump sum is invested in a liquid fund and every month a fixed amount is transferred from the liquid fund to an equity fund. For every transfer, there is a capital gains tax liability. When the transferred amount is invested into the equity fund, an entry load needs to be paid. An investment in Tata SIP Fund works similarly, only the investor would not have to pay tax every time the units are redeemed neither he will he have to pay the entry load.” How is Tata SIP different from a regular SIP? Regular SIP plans normally offer investors the facility of post-dated cheques or auto debit at time of investment. The Tata SIP Fund on the contrary, invites a lump sum subscription amount during the NFO, which will initially be invested in debt and money market instruments. These funds will then be systematically transferred to equities over the
