What is Robo STP? An Powerful way to invest your money

What is Robo STP? An Powerful way to invest your money

 A method of investing into equity that is better than a lumpsum (one-time) buy. An STP gives you the benefits of staggering your large investment amount over installments, such that the risk of investing the entire amount when the markets are very high is reduced. STP brings the benefit of SIP to lump sum (one-time) investing, by automatically breaking it down into monthly installments. User decides the installment amount & installment number to transfer his entire amount from one fund to another. 

How does it work?

Let’s understand this with an example. Suppose you had 1 Lakh with you on 3rd Dec 2021. This is how  STP would have deployed your money every month till May 2022.

So we see how an STP reduces the risk of investing in equity markets by averaging out your investment into installments. So you are not left thinking about whether the time is right to invest or not and do not end up delaying your investment and giving up the benefits of compounding. 

What if there was an even better way? What if, your monthly installment amounts are dynamic, based on the equity market levels being higher or lower compared to historical periods. Our backtests show such an approach to deliver even higher vs. a Normal STP approach we discussed above. 

What is Robo STP?

Robo STP takes one step further. In Robo STP, your monthly installments are NOT equal. Using our proprietary market valuation model, your monthly installment amount is set dynamically. This is done based on how high or low the market valuation levels are vs. historical periods.

Under ROBO STP, AI helps you to deploy your money in NIFTY 50 Equities at the right time by analysing multiple parameters such as Valuation, index, USD-INR, 3-year bond yield, BEER ratio, and Index’s close price. This approach could lead to potentially higher returns and lower drawdowns over the long term. 

How does it work?

Let's understand how a Robo STP would work in the above example. Suppose you had 1 Lakh on 3rd Dec,2018. This is how Robo STP would have deployed your money over the months' basis the Market Signal.

Robo STP vs Normal STP vs Lumpsum

Let’s see how Robo STP vs Normal STP vs Lumpsum would have performed in 1 year, 2 year & 3 year. 

Taking the same example as described above where a user would have invested 1 Lakh each in Lumpsum, Normal STP & Robo STP on 3rd Dec,2018. The below graph represents the comparison between Lumpsum vs Normal STP vs Robo STP returns. 

What is an AI algorithm-led market signal?

Our model takes into account decades of historical data on fundamental and technical market parameters like Sensex PE, Sensex PB ratio, USD-INR rates, India VIX, Ind-3yr Bond data & Sensex Close price. Using these values the model identifies periods of relatively cheap and expensive market conditions. 

Our backtests have proved that Robo STP leads to potentially higher returns and lower volatility. 

Advantages of Robo STP

✅  Intelligent valuation-based opportunistic deployments - Instead of deploying your entire money in one go into equities, it is initially parked in a safe liquid fund and gradually moved into equities over a period of time.

✅ Consistent performance with reduced risk of poor long-term outcomes usually due to high starting valuations. During the last 4 years, a Normal-STP investment in NIFTY index fund would have given 13.5% annual return on average, whereas Robo STP has delivered 15% annual return.

✅ Hassle-Free Automated Execution - Monthly rebalances are automated and take less than 5 minutes to set up your Robo STP.

Note: If you have any query let us tell in the comment section. 


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