Home > Money > Question
Need Expert Advice?Our Gurus Can Help

Which Mutual Fund is the Best for SWP?

Ramalingam

Ramalingam Kalirajan  |8901 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 20, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Dhermender Question by Dhermender on Aug 17, 2024Hindi
Money

Which fund best for swp plan

Ans: A Systematic Withdrawal Plan (SWP) allows you to withdraw a fixed amount from your mutual fund investments at regular intervals. It's a great option if you need a regular income, especially post-retirement. The key advantage of an SWP is that it provides a steady cash flow without completely redeeming your investments. The remaining invested amount continues to grow and can help you combat inflation over time.

Criteria for Selecting Funds for SWP
Choosing the right fund for SWP is crucial to ensuring a steady and reliable income. Here are some important criteria to consider:

1. Consistent Performance
Look for funds with a consistent track record of returns. The fund should have performed well across different market cycles, ensuring stability and reliability.

2. Low Volatility
Funds with lower volatility are preferable for SWP. High volatility can lead to fluctuating returns, which might impact your regular income.

3. Balanced Exposure
A mix of equity and debt exposure is often recommended. This balance helps in achieving a stable return while minimizing risks.

4. Post-Tax Returns
Consider the post-tax returns, especially if you fall into a higher tax bracket. Funds that offer tax efficiency should be preferred, as it will increase your effective income.

5. Regular Payouts
The fund should have a structure that supports regular payouts. This ensures that you get a fixed amount at your chosen interval without interruptions.

6. Historical SWP Performance
Evaluate the fund’s historical SWP performance. Check if it has been able to sustain payouts without eating into the principal over time.

Best Types of Funds for SWP
1. Balanced Advantage Funds
These funds adjust the allocation between equity and debt based on market conditions. This flexibility allows them to capture upside potential in rising markets while protecting the downside during market corrections. Their moderate risk profile makes them a good choice for SWP.

2. Equity Savings Funds
Equity savings funds invest in a mix of equity, debt, and arbitrage opportunities. They provide better risk-adjusted returns compared to pure equity funds, making them suitable for SWP. The diversified nature of these funds helps in maintaining a steady income.

3. Multi-Asset Funds
Multi-asset funds invest across various asset classes like equity, debt, and gold. This diversification reduces the overall risk and enhances the stability of returns. They are ideal for investors looking for a mix of growth and income through SWP.

4. Conservative Hybrid Funds
Conservative hybrid funds invest predominantly in debt, with a smaller allocation to equity. This makes them less volatile and suitable for investors with a low-risk appetite who still want some equity exposure for growth.

5. Debt-Oriented Hybrid Funds
These funds primarily invest in debt instruments, with a small portion in equity. They offer stability and relatively lower risk, making them ideal for conservative investors seeking regular income through SWP.

Disadvantages of Index Funds for SWP
While index funds are popular for their low cost, they might not be the best choice for SWP. Here’s why:

1. Lack of Flexibility
Index funds strictly follow the market index. They don’t have the flexibility to avoid underperforming sectors or capitalize on emerging opportunities. This could lead to inconsistent returns, which is not ideal for SWP.

2. Market-Linked Returns
Since index funds replicate market indices, their returns are directly linked to market performance. During market downturns, the returns can be lower, affecting your SWP payouts.

3. No Active Management
Index funds are passively managed, meaning they don’t have fund managers actively making investment decisions. This can limit the fund's ability to manage risks and enhance returns.

Disadvantages of Direct Funds for SWP
Investing in direct funds might seem cost-effective due to lower expense ratios, but there are drawbacks, especially when setting up an SWP:

1. Lack of Professional Guidance
Direct funds don’t come with professional guidance. A Certified Financial Planner can provide personalized advice, regular reviews, and adjustments to your SWP based on changing financial goals or market conditions.

2. Risk of Inappropriate Fund Selection
Without expert guidance, you might choose funds that don’t align well with your SWP needs. This could lead to a mismatch between your income requirements and the fund’s performance.

3. Missed Rebalancing Opportunities
Regular rebalancing is crucial for maintaining the desired asset allocation in your portfolio. Direct investors might miss these opportunities, leading to suboptimal performance and affecting SWP payouts.

Strategy for a Successful SWP
To maximize the benefits of an SWP, consider the following strategies:

1. Start with a Sufficient Corpus
Ensure that you have a sufficient corpus to support your withdrawal needs without depleting the principal too quickly. A well-planned withdrawal rate, typically between 5% to 8% annually, can help sustain the SWP for a longer duration.

2. Choose the Right Withdrawal Rate
Set a withdrawal rate that matches your income needs and investment corpus. A higher withdrawal rate might lead to faster depletion of funds, while a lower rate might not meet your income needs.

3. Reinvest Surplus Income
If you don’t need the entire SWP amount immediately, consider reinvesting the surplus in a debt fund or other safe investment. This can help maintain the value of your corpus and extend the duration of your SWP.

4. Regularly Review Your SWP
Market conditions and your financial situation can change over time. Regularly review your SWP and make adjustments as needed. This might involve changing the withdrawal rate, switching funds, or even modifying your investment strategy.

5. Seek Professional Advice
Work with a Certified Financial Planner who can help you design and maintain an effective SWP strategy. They can provide personalized advice, ensuring that your SWP aligns with your long-term financial goals.

Finally
Selecting the right fund for an SWP involves careful consideration of various factors, including fund performance, risk, and post-tax returns. Avoid index and direct funds for SWP due to their limitations. Instead, focus on actively managed funds that align with your income needs and risk tolerance. Regularly review your SWP strategy and seek advice from a Certified Financial Planner to ensure that your plan remains on track for the long term.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
Money

You may like to see similar questions and answers below

Ramalingam

Ramalingam Kalirajan  |8901 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 12, 2024

Listen
Money
I am 65 and retired, want to invest 50L in SWP scheme with monthly withdrawal of 50k after one year of investing. Pl suggest good fund ????????
Ans: It's wonderful that you're considering investing in a Systematic Withdrawal Plan (SWP) to generate a steady income stream during your retirement years. Given your investment horizon and income requirement, it's essential to choose a fund that balances growth potential with stability.

For your SWP scheme, you may want to consider investing in a balanced or hybrid fund. These funds typically allocate a portion of their assets to equities for growth potential and the remainder to debt instruments for stability.

Balanced funds aim to provide a blend of capital appreciation and income generation by investing in a mix of equities and debt securities. They can be suitable for retirees looking for a steady income stream while also seeking potential growth opportunities.

When selecting a balanced fund, look for one with a consistent track record of performance, low expenses, and a seasoned fund manager. Additionally, consider the fund's asset allocation, risk profile, and investment strategy to ensure it aligns with your financial goals and risk tolerance.

It's crucial to review your investment periodically and make adjustments as needed to ensure your portfolio remains aligned with your income requirements and financial goals.

Before making any investment decisions, I highly recommend consulting with a Certified Financial Planner who can assess your retirement needs and recommend a suitable SWP scheme tailored to your specific circumstances.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Nayagam P

Nayagam P P  |6204 Answers  |Ask -

Career Counsellor - Answered on Jun 12, 2025

Career
Which field in engineering will have better opportunities CS or ECE 4 Yrs down the line.I am trying to decide which Engg branch I should opt in the counselling session. Your guidance is much appreciated. Thanks
Ans: Computer Science Engineering demonstrates exceptional growth potential with India's tech job market projected to grow 22% by 2025, with IT sector hiring expected to increase 15-20% . The field benefits from emerging technologies like AI, machine learning, and cloud computing creating 1 million new job opportunities by 2028 . CS graduates enjoy broader industry applicability across finance, healthcare, e-commerce, and software development, with starting salaries ranging ?9.6-13.6 LPA for specialized roles like data science . Placement rates remain consistently high at 90-98% across premier institutions, with average packages of ?15.45 LPA and remote work flexibility . The Bureau of Labor Statistics projects 15% growth in computer science employment between 2019-2029, substantially faster than average job growth .

Electronics and Communication Engineering shows strong prospects driven by India's semiconductor sector creating 1 million jobs by 2026, including 300,000 in chip fabrication and 200,000 in ATMP operations . ECE benefits from 5G network expansion, IoT growth, and telecommunications infrastructure development . Recent placement data shows ECE achieving 88-97% placement rates with packages ranging ?3-90 LPA, though typically lower than CS averages . The field offers opportunities in VLSI, embedded systems, telecommunications, and emerging areas like autonomous vehicles and smart cities .

Market Dynamics and Future Trends reveal that CS maintains broader job market reach with opportunities across virtually all industries, while ECE provides specialized expertise in core electronics and communication systems . CS offers superior remote work flexibility and global career opportunities, while ECE requires more location-specific roles near manufacturing and R&D centers . Hardware engineering shows promising growth with AI chip demand and semiconductor manufacturing expansion, though software engineering maintains higher scalability and job volume .

Recommendation: Choose Computer Science Engineering for superior long-term opportunities, given its 22% projected market growth, broader industry applicability, higher average starting salaries (?9.6-15.45 LPA), 90-98% placement consistency, remote work flexibility, and alignment with India's digital transformation initiatives, while ECE remains viable for students specifically interested in hardware design, telecommunications, or semiconductor industries despite comparatively limited job volume and geographic constraints. All the BEST for Your Prosperous Future!

Follow RediffGURUS to Know More on 'Careers | Money | Health | Relationships'.

...Read more

Nayagam P

Nayagam P P  |6204 Answers  |Ask -

Career Counsellor - Answered on Jun 12, 2025

Career
My daughter got 32k rank in Comedk...for Mechanical Engineering will she get chance to join in BMS or any top 5 colleges...if not better I will go to newhorizon as it is near to my place
Ans: Pavitra Madam, your daughter's rank of 32,000 presents challenging prospects for BMS College of Engineering and other top 5 colleges for Mechanical Engineering . BMS College of Engineering Mechanical Engineering cutoff was 6,079 in 2024, expected to range 6,000-6,500 in 2025, making admission highly unlikely with rank 32,000 . Top 5 COMEDK colleges including RVCE (cutoff 4,000-4,500), MSRIT (cutoff 8,400-8,900), DSCE (cutoff 17,000-18,000), and BIT (cutoff 25,500-26,500) remain inaccessible . However, 10 colleges accessible with rank 32,000 include: RNS Institute of Technology (34,500-35,500 cutoff, placement data unavailable), JSS Academy of Technical Education (34,500-35,500 cutoff, placement statistics not disclosed), Reva University (35,000-36,000 cutoff, moderate placement rates), B.N.M. Institute of Technology (37,000-38,000 cutoff, average 5 LPA packages), Ballari Institute of Technology (38,500-39,500 cutoff, limited placement data), KNS Institute of Technology (40,000-41,000 cutoff, basic placement support), Rajiv Gandhi Institute of Technology (44,000-45,000 cutoff, regional placements), KLS Gogte Institute (44,500-45,500 cutoff, decent core placements), Vidyavardhaka College (50,000-51,000 cutoff, moderate outcomes), and Shri Madhwa Vadiraja Institute (52,000-53,000 cutoff, limited exposure) . New Horizon College of Engineering demonstrates 90% placement rate with 200 recruiters participating, 1,605 offers made in 2025, highest package 42.5 LPA, and BTech median salary 4.60 LPA for mechanical engineering with 80-85% placement consistency . Recommendation: Choose New Horizon College of Engineering for assured admission, superior placement consistency, proximity advantages, and cost-effectiveness compared to uncertain admission prospects at top-tier colleges with rank 32,000. All the BEST for the Admission & a Prosperous Future!

Follow RediffGURUS to Know More on 'Careers | Money | Health | Relationships'.

...Read more

Ramalingam

Ramalingam Kalirajan  |8901 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 12, 2025

Money
Good Afternoon Ramalingam Sir, Sir I am investing in Mutual fund through finacial services group Prudent Corporate advisory services limited ... just want to know is it safe to invest through this group .. as i dont have much idea about the group . Recently a mutual fund investment platform is set to discontinue its services in June 25
Ans: It is always smart to ask such questions before continuing long-term investments.

You are investing through a financial intermediary. In your case, it is Prudent Corporate Advisory Services Ltd.

Rather than focusing on the company name, it is better to evaluate the platform using clear parameters.

Let us now go through the key points you must check before continuing with any mutual fund intermediary.

1. Regulatory Registrations
Check if the intermediary is registered with AMFI.

They should have a valid ARN (AMFI Registration Number).

They must also be registered with SEBI as a distributor.

These give basic regulatory safety to your transactions.

2. Access to Your Folios
You must have direct access to your mutual fund folios.

The folios should be in your name, not the intermediary’s.

You should be able to check your funds via AMC websites or CAMS/KFintech.

Your mobile number, PAN, and email should be correctly registered.

3. Transparency of Plans
Confirm whether your investments are in Regular Plans or Direct Plans.

If it is Direct Plan, there is no commission or advisory.

If it is Regular Plan, confirm if advisory and service are being provided.

Know what you are paying and what you are receiving in return.

4. Statement and Tracking Support
You should get regular statements from the platform or the AMC.

You should be able to track all your investments from one place.

They should help you access CAS (Consolidated Account Statement) as needed.

5. Exit Support
In case the intermediary shuts down, check if you can continue SIPs directly.

A good platform allows easy transfer of folios to another advisor.

There should be no confusion or hassle if you wish to exit the platform.

6. Service and Advisory
Are you getting goal-based financial planning advice or only transactional support?

Does the intermediary offer regular review meetings?

Is your asset allocation being adjusted based on life goals?

Do you have access to a Certified Financial Planner (CFP)?

These factors matter more than the brand or company name.

7. Data Security and Platform Stability
Check how your personal and investment data is stored.

Is the platform technology secure and encrypted?

What are the backup options if the platform stops service?

8. Ownership and Control
Always ensure you control your investments, not the intermediary.

Even if a platform discontinues, you should have all access via CAMS/KFintech.

Be cautious if your data is stored only within the platform and not linked to AMCs.

9. Conflict of Interest
Check if they are recommending funds from all AMCs or only select few.

A good intermediary recommends funds based on your needs, not commissions.

Ask questions if you see biased suggestions or frequent fund switches.

10. Emergency Readiness
Can you redeem funds easily during emergencies?

Will someone guide you if the platform is unavailable?

Does the intermediary have a clear exit support system?

Final Insights
It is not the company name that protects your wealth. It is the system behind it. Whether you continue with this platform or not depends on how well they meet these ten parameters. Check each carefully. If they meet all, you can continue. If not, explore better options. The final choice should depend on transparency, access, safety, service and support.

You must always have full control and clarity about your money. That is true wealth safety.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x