Typically, when it comes to making gradual and staggered investments in mutual funds, experts recommend opting for a systematic transfer or systematic investment plans. But for those who invest significantly in debt funds and want a flavour of equity schemes in their portfolios, there is one more option to invest at a staggered pace. It’s called the dividend transfer plan. Most fund houses offer dividend transfer plans.Transferring dividendsFirst, you invest a lump-sum in a debt fund. Choose the dividend payout option. Preferably, choose the monthly or quarterly option, as that way the dividend payouts from your debt fund are a bit more regular and so would your investments in the chosen equity fund. You can also choose an arbitrage fund as the source scheme.Close At the same time, choose the fund in which you wish to re-invest your dividend proceeds, preferably an equity scheme. Since the dividend transfer plan (DTP) works only if you choose both the source and target schemes from the same fund house, your form will need to you to mention both these schemes. The destination scheme can be a well-diversified multi-cap equity fund with a good track record. The source scheme declares dividends when the net… Read full this story
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