Hello everyone! I want to start an SWP. I'm ready to invest 25 lakhs at once and need 26000 every month for the next 30 years.I'm expecting 12%-15% CARG. Please suggest to me should I invest in one fund or multiple funds, what would be the better approach and which will be the best fund ?

Ans: Hello, i can suggest the categories of funds that you can invest in, those are :
Large and mid cap - 20%
Mid cap - 10%
Small cap - 10%
Multicap - 20%
Equity hybrid - 20%
BAF - 10%
Emergency funds - 10%

Please note that these suggestions are based on your stated goals and the information you provided. It is always a good idea to consult with a financial advisor in person to better understand your risk tolerance, time horizon, and specific financial goals.

Ans: You can invest 30 Lac as lumpsum in conservative hybrid(debt oriented) fund. Based on 5 year return yardstick Kotak hybrid debt fund and SBI Conservative hybrid fund are the 2 recommendations.

It will be better if you stay invested in this fund for 5 year and let the corpus grow. After 5 years you can expect a corpus of around 50 Lacs(10%+ return assumed)

Then you can start your SWP at the rate of say 5% per year which will translate into monthly payout of around 21K.

However if you need immediate pension then you can invest in PO monthly income scheme(7.4% rate;5yr tenure) upto 9 L in your name and another 9 L in the name of your spouse or other family member. It is a safe scheme since backed by GOI. For the balance 12 L you can do 3 FDs of 4 L each in reputed banks.

*Investments in mutual funds are subject to market risks. Please read all scheme related documents carefully before investing

Ans: strategy:

Choosing Mutual Funds for SWP:

While a 12% annual return assumption can be used for initial calculations, achieving that consistently over 30 years is difficult. Here's a framework to select funds for your SWP:

Asset Allocation: Consider your age, risk tolerance, and financial goals. A balanced portfolio with equity and debt funds is recommended for SWP. For example, a 60% equity and 40% debt allocation might be suitable.

Equity Funds: Large-cap or multi-cap funds can provide a good balance of growth and stability. Look for funds with a good track record, low expense ratios, and diversification across sectors.

Debt Funds: Debt funds like short-term or income funds can provide regular income and stability to your SWP withdrawals. Consider factors like credit quality of the underlying investments and maturity of the debt instruments.

Here's a suggestive asset allocation, but consult a financial advisor for personalization:

Equity Funds (60%): Invest in 2-3 well-diversified equity funds (large-cap or multi-cap) with a proven track record.
Debt Funds (40%): Invest in 1-2 debt funds (short-term or income) with good credit quality and suitable maturity profile to meet your monthly withdrawal needs.
Other Factors to Consider:

Investment Horizon: 30 years is a long time. Your asset allocation might need adjustments as you near retirement and your risk tolerance changes.
Inflation: A 12% return assumption might not fully outpace inflation. Consider a slightly higher return expectation to maintain purchasing power over time.
Tax Implications: Consult a tax advisor to understand the tax implications of SWPs, especially capital gains taxation on redeemed units.
Review and Rebalance: Periodically review your portfolio performance (at least annually) and rebalance if needed to maintain your desired asset allocation.
Contingency Planning: Factor in potential emergencies or fluctuations in income. Maintain an adequate contingency fund outside your SWP.
Remember: This is general information, and you should consult a qualified financial advisor for personalized investment advice tailored to your specific financial situation and risk tolerance. They can help you choose the right mutual funds, create a comprehensive SWP strategy, and consider all the relevant factors for your 30-year investment journey.

Ans: Hello, i am glad you have the knowledge of SWP and you wise to invest in Mutual funds for the same
For an SWP of 1L per month, you have to invest 2crs ( SWP rate is 6% )
Looking at your age and since i don't have the understanding of your other investments, you should make a balanced portfolio
Listing the funds as follows which we have to invest using an STP of 10 to 20 weeks :
Aggressive Hybrid - 10%
Large and mid cap - 20%
Multicap - 20%
Mid cap - 20%
Small cap - 20%
Thematic funds - 10%

SWP can be started when the STP is fully done

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