New type of Mutual Fund - SIP Fund

All those people who are doing investment in mutual fund would be having a SIP(Systematic Investment Plan) in some funds to avoid the volatility of the markets. But the SIP comes with its own problems like writing a number of cheques/ payment instructions, accounting / recording multiple transactions, computation of tax liability in respect of each installment and maintaining minimum balance for auto debit clearance.

All these problems can go away with this new type of Fund called "SIP Fund". Tata has come up with a fund where the investor puts the money one time, which will be initially put in 100% debt funds, but slowly moved to Equity, which means by the end of the term(3 years) it will be 100% Equity. Also, the investor has the option of redeeming the units at the end of the term or switching to another fund called Tata Pure Equity Fund.

The advantages here being that the investor is benefited from the SIP mechanism and also he earns interest as per the debt scheme for the amount not in the Equity, not bad.

Looks like other AMCs are also planning to start funds of this style.