Best mutual funds for SWP

Best mutual funds for SWP

by 5paisa Research Team Last Updated: 2022-04-13T15:05:05+05:30

Investing in mutual funds has two phases, one is accumulation and another is distribution. In this article, we would be listing the best funds for distribution phase. So, stay tuned!

When you invest in mutual funds, mostly it is divided into two phases, one being the accumulation phase and another being the distribution phase. In the accumulation phase, you invest with an investment horizon that helps you plan your Systematic Investment Plan (SIP) accordingly. Once you have reached the desired time horizon, you would be in a distribution phase.

Now, the thing to understand here is that the distribution phase can be a one-time affair or a long-term affair. Say, for instance, you are saving for your child’s graduation degree from college which is 10-years away from today. So, after 10-years your distribution phase would end when you would withdraw your investments and pay for the college fees. However, when it comes to retirement or if you are seeking a regular income for a specified time period, then the distribution phase can be long-term.

Having said that, it is quite easy to plan for a one-time distribution phase. But when it comes to the long-term distribution phase, then things get complicated. In such a case, the Systematic Withdrawal Plan (SWP) comes to the rescue.

SWP is a tool that helps you withdraw the accumulated amount at regular intervals until the specified time or when the balance in such investments turns nil, whichever is earlier.

The major task faced by mutual fund investors is which fund is better for SWP. There cannot be one answer to this question. This would depend on your requirement. If you need this income for basic needs then investing in a good mix of debt mutual funds makes more sense. If the case is of regular income during retirement, then you would be better off investing in either a good mix of equity and debt mutual funds or a good mix of hybrid funds.

In this article, we have listed the best funds for SWP.

Trailing Returns (%) 

1-Year 

3-Year 

5-Year 

10-Year 

Kotak Multi Asset Allocator FoF - Dynamic 

20.95 

19.34 

13.69 

15.02 

ICICI Prudential Multi Asset Fund 

37.22 

18.37 

14.08 

15.50 

ICICI Prudential Equity & Debt Fund 

38.93 

19.53 

14.91 

16.68 

SBI Multi Asset Allocation Fund 

15.89 

12.55 

9.41 

10.31 

Sundaram Balanced Advantage Fund 

12.79 

11.91 

9.43 

11.34 


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