Want to know more about switching mutual funds Sijo Joseph, 25 Jan 2013

I have invested 50k in SBI contra through SIP but it is not performing well, i wish to switch to Reliance opportunities fund. My question is how shall i switch my fund from SBI to Reliance as i have invested through SIP and when i will exit, i will get lumsum money, shall i invest this money in one shot in the reliance fund or i shall start the SIP again in the reliance and keep the money in saving account untill it got used by those SIPs. Suggest me the right way to switch funds.

Fintotal Answer

There is a way of transferring your money from debt mutual funds to equity mutual funds, systematically and in fixed amounts and frequency. This mode of investing is called as Systematic Transfer Plan (STP). This way you are doing an SIP in an equity fund and also your money does not remain stagnant like it would in a Savings Account. You’d have to first redeem from SBI Magnum Contra and do an STP on a debt scheme from Reliance Mutual Fund to Reliance Equity Opportunities fund. Read more about this in http://www.knowledge.fintotal.com/article/SIP-or-STP-Confused/5846

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