HDFC Swing STP

Swing STP is a facility wherein unit holder(s) can opt to transfer an amount at regular intervals from designated open-ended Scheme(s) of HDFC Mutual Fund ("Transferor Scheme") to the Growth Option of designated open-ended Scheme(s) of HDFC Mutual Fund ("Transferee Scheme") including a feature of Reverse Transfer from Transferee Scheme into the Transferor Scheme, in order to achieve the Target Market Value on each transfer date in the Transferee Scheme, subject to the terms and conditions of Swing STP.  

HDFC Swing STP works on the principle of value cost averaging whereas HDFC STP works on the concept of rupee cost averaging. Rupee cost averaging works on the principle of investing a fixed sum of money at regular intervals irrespective of the market levels. On the other hand under Value Cost Averaging varying amounts are invested at regular intervals depending on the market fluctuations to arrive at a specific target portfolio value at each transfer date.  

Under HDFC Flex STP, a unit holder invests a fixed amount when the market level is higher and invests more when the market level is lower. However, the total amount invested cannot exceed the original amount for which the STP is enrolled.
Under HDFC Swing STP, the amount invested will be more when the market levels are lower and lower when the market levels are higher. However the total amount invested through Swing STP could be higher or lower than the Total Target Market Value of the investment.

In Swing STP, transfers in Transferee Scheme from the Transferor Scheme are made to arrive at the Total Target Market Value in the Transferee Scheme by transferring an amount at regular intervals in such a way so as to increase the Target Market Value of units in the Transferee Scheme systematically by a fixed amount (i.e. the first installment amount specified by the Unitholder) on the date of each transfer till the tenure of the Swing STP. The amount to be transferred will be arrived at on the basis of the difference between the Target Market Value and the actual Market Value of the holdings in the Transferee Scheme on the date of transfer.

From the second Swing STP installment onwards, the transfer amount may be higher/lower than the first installment amount, as derived by the formula stated below: (First installment amount X Number of installments including the current installment) - Market Value of the investments through Swing STP in the Transferee Scheme on the date of transfer. In case the amounts (as specified above) to be transferred are not available in the Transferor Scheme in the unit holder?s account, the residual amount will be transferred to the Transferee Scheme and Swing STP will be closed.

A reverser transfer is defined as follows: On the date of transfer, if the market value of the investments in the Transferee Scheme through Swing STP is higher than the first installment amount X number of installments (including the current installment), then a reverse transfer will be effected from the Transferee Scheme to the Transferor Scheme to the extent of the difference in the amount, in order to arrive at the Target Market Value.

HDFC Swing STP has the following benefits:  

• Investors need not time their entry or exit. HDFC Swing STP automatically invests more when NAVs are down and invest less when NAVs are up, depending on the market value of investments.

• It provides an automatic route to exit an investment when portfolio appreciation is higher than the target market value in the transferee scheme by Reverse Transfer to Transferor Scheme.

• It helps investors to plan for and reach final financial goal.

• It allows investors to take advantage of market fluctuations and removes emotions from the decision making process.

• The initial investments in select debt/liquid funds enhance total returns.

• Investors can take advantage of the market movements without hassles.

HDFC Swing STP is available for the following open – ended Scheme(s) of HDFC Mutual Fund:
HDFC Liquid Fund, HDFC Cash Management Fund, HDFC Income Fund, HDFC High Interest Fund, HDFC Short Term Plan, HDFC Floating Rate Income Fund, HDFC Short Term Opportunities Fund, HDFC Medium Term Opportunities Fund, HDFC Gilt Fund, HDFC MF Monthly Income Plan (an open - ended income scheme. Monthly income is not assured and is subject to availability of distributable surplus), HDFC Growth Fund, HDFC Equity Fund, HDFC Top 200 Fund, HDFC Capital Builder Fund, HDFC Core & Satellite Fund, HDFC Premier Multi-Cap Fund, HDFC Index Fund, HDFC Balanced Fund, HDFC Prudence Fund, HDFC Mid-Cap Opportunities Fund, HDFC Long Term Equity Fund, HDFC Infrastructure Fund and HDFC Gold Fund (an open ended fund of fund scheme investing in HDFC Gold Exchange Traded Fund).

HDFC Swing STP offers transfer facility at weekly, monthly and quarterly frequency. Unit holder is free to choose the frequency of such transfers. In case the frequency (Weekly/ Monthly/ Quarterly) is not indicated, Monthly frequency shall be treated as the Default Frequency.  

 

The minimum amount per Swing STP installment shall be as follows:

• Swing STP - Weekly & Monthly Interval:  1,000 and any amount thereafter.

• Swing STP - Quarterly Interval:  3,000 and any amount thereafter.

 

Under HDFC Swing STP will the total amount invested in the transferee scheme be equal to the total target market value (TTMV) or less than the TTMV or more than the TTMV
The amount invested after the first instalment varies till the end of the tenure of Swing STP. These amounts vary due to the fluctuations in the market value of the units allotted in the transferee scheme.

Due to this fluctuation the total amount invested in the transferee scheme may be more or less than the TTMV in the transferee scheme.  

The redemption/switch-out of units allotted in the Transferee Scheme shall be processed on First in First out (FIFO) basis.  

 

 

 

In case there is a redemption/switch-out other than reverse transfer of any units allotted under Swing STP in the Transferee Scheme by the unit holder, the balance installments under Swing STP will be processed as a normal STP for the remaining installments by investing the amount indicated as first installment amount, on the date of each transfer over the balance tenure of the Swing STP, subject to availability of unit balance in the Transferor Scheme.

There are no minimum or maximum limits on the amount of reverse transfers.

There should be a minimum of 6 installments for enrolment under Weekly and Monthly Swing STP and 2 installments for Quarterly Swing STP.

There is no maximum duration for Swing STP enrollment. However, Swing STP will be registered in a folio held by a minor only till the date of the minor attaining majority, even though the instructions may be for a period beyond that date. The Swing STP facility will automatically stand terminated upon the Unit Holder attaining 18 years of age.  

 

The minimum unit holder?s account balance or a minimum amount of application at the time of Swing STP enrolment should be  12,000.  

In case of Swing STP - Weekly Interval, the commencement date shall be within 15 days from the date of receipt of a valid request.

The application for enrollment for Swing STP - Monthly and Quarterly Intervals should be submitted at least 10 days and not more than 90 days before the desired commencement date.

In case the Start Date is not mentioned, the application will be registered after expiry of 10 days from submission of the application from the default date i.e. 10th of each month / quarter (or the immediately succeeding Business Day).

In case the End Date is not mentioned, the application will be registered for the minimum number of instalments applicable.

The Load Structure prevalent at the time of enrolment shall govern the investors during the tenure of the Swing STP.  

 

 

 

For redemption/reverse transfers from the Transferee Scheme exit load applicable, as on the date of enrolment for Swing STP will be levied.

Applicable Exit Load, if any, in the Transferor Scheme / Plan /Option as on the date of enrolment for Swing STP will be levied.

Swing STP will be automatically terminated if all units are liquidated or withdrawn from the Transferor Scheme or pledged or upon receipt of intimation of death of the unit holder.

Unit holders have a right to discontinue the Swing STP facility at any time by sending a written request to the ISC. On receipt of such request, the Swing STP facility will be terminated within 15 days.

A. Under the weekly frequency facility the day of transfer can be Monday, Tuesday, Wednesday, Thursday, or Friday. Under the monthly interval facility the date of transfers can be on the 1st, 5th, 10th, 15th, 20th or 25th of each month. Under the quarterly interval facility the date of transfers are on the 1st, 5th, 10th, 15th, 20th or 25th of the first month of each quarter. The beginning of the quarter could be any month e.g. April, August, October, November, etc. In case the day/date of transfer falls on a non-Business Day or falls during a book closure period, the immediate next Business day will be considered for the purpose of determining the applicability of NAV and processing the Application.  

 

 

The redemption of units under Swing STP by way of Transfer/ Reverse transfer would be subject to applicable taxes, if any. For details on taxation, please refer to the Section on "Taxation on investing in Mutual Funds? in "Statement of Additional Information ("SAI?)?. In view of individual nature of tax consequences, each client is advised to consult their professional tax advisor in regard to tax treatment for their investments / redemption.

The Swing STP Facility is available only for units held / to be held in Non - demat Mode in the Transferor and the Transferee Scheme.
HDFC Swing STP in any manner whatsoever is not an assurance or promise or guarantee on part of HDFC Mutual Fund/HDFC Asset Management Company Limited to the Unit holders in terms of returns or capital appreciation or minimization of loss of capital or otherwise.