Please explain me concept of SWP in Mutual funds ?

POSTED BY sumans ON February 14, 2014 12:37 pm COMMENTS (2)

Also wanted to know if i want to invest Rs. 50000/- as lumsum  amount in any MF what way should i proceed and in which fund also wanted to know if i can invest  and the take a SWP in the same fund though i am not very clear with this concept of SWP as some agent told me. Please guide and advise.

Thanks & Regards.

2 replies on this article “Please explain me concept of SWP in Mutual funds ?”

  1. arjunp3000 says:

    Systematic withdrawal plans suit investors who want to get a regular and fixed cash flow from their investment.

    In other words, it helps create your own annuity. You can fix the sum you want to withdraw on a monthly basis from the fund. But there are a few factors you need to keep in mind while opting for this:

    Have a sizeable corpus: You should have a reasonable amount that will allow you to do a regular withdrawal over the time frame you need. There is little point in investing and starting withdrawal the very next month. For one, if you do not allow your investment to stay for at least 1 year, you will end up incurring short-term gain capital gains.

    Two, it helps if you allow your money to make returns as a lump sum before you start withdrawing it. Hence, as far as possible try to plan a bit ahead and invest when you know you will start requiring regular sums, say in a year or two.

    Exit load: Even if you decide to withdraw before a year, check if you end up paying exit loads. While liquid funds will not have exit loads, others may have for withdrawals made soon after investing. You may not wish to incur this unnecessarily, besides capital gains.

    Click here to read the entire article on FundsIndia’s Blog:

  2. ashalanshu says:

    Dear Suman, please read the old article of dear Manish in main JI site discussing SIP, SWP, STP.



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