SWP or not?

POSTED BY Ram Mohan ON April 4, 2012 5:17 pm COMMENTS (9)


I have around 40K that can be withdrawn from one of my under performing mutual funds “Principal Personal tax Saver” — this is after the lock-in period and I invested the money via SIP.

Question is — should i just withdraw in 1 shot or via SWP? I’m thinking SWP so as to average out the market. I don’t really need the money urgently. I just want it for my emergency fund (liquid fund)

The other question is — really how many folks here use SWP to withdraw money? I know everybody uses SIP to invest, but when it’s time to redeem (and you don’t really need the money) how many of you use SWP to withdraw?


9 replies on this article “SWP or not?”

  1. Ram Mohan says:

    Thanks all, I think I’ll withdraw at one shot since it’s an emergency fund and better not to be greedy in terms of 2 or 3% return


  2. Dear Ram, Please redeem in one shot & invest it into a debt fund as it’s meant for your emergency funding purpose.



  3. TheZionView says:

    @ Ram

    I wouldn’t play with my emergency fund. If this 40K is you emergency fund don’t wait for tomorrow just withdraw today and keep it in a liquid fund or your savings account.

    Emergency Funds are not be played along and not to be delayed in creating. If you are going to miss out 3-4% due to market movement will that matter ?

  4. Be Ruthless when you want to take action on non performing assets. If you are observing that this fund is continous laggard, withdraw in one shot.If i was you, i would have not gone the SWP way.

  5. BanyanFA says:

    I haven’t used SWP till date as I don’t tend to liquidate my portfolio. However, what you have mentioned would best be executed via SWP.

    After you have held your MFs for some time and are seeing some green ticks on your investments, then they actually act as emergency fund. Liquid fund reach your account within 1 day. Non Liquid take 2-3 days. The number of days difference is not big enough for me to justify selling my funds and investing them into Liquid funds.


    1. Ram Mohan says:

      Hi BFA,

      The reason I want to move them to liquid fund is not to reduce the number of days it takes to liquidate them, but rather to protect the profits from market downside…

  6. Ram Mohan says:

    Additional point to be noted:

    For me personally, the fund has given good returns (40%), but as per many sites (Moneycontrol & Moneysights), the performance is not good and warrants a sell. So, if you ask me, i’ve not lost money or it’s not that underperforming fund for the money to be withdrawn at 1 shot

    1. rakesh says:


      Can you be more specific? First you say “I have around 40K that can be withdrawn from one of my under performing mutual funds “Principal Personal tax Saver” and then you go on to say “For me personally, the fund has given good returns (40%),”
      If the fund has given you 40% returns why would you want to sell it.

      1. Ram Mohan says:

        Hi rakesh,

        Just to clarify, the fund as such has not underperformed for me, but has been underperforming peers and it’s valuation as a good fund has gone down. So, if I continue to remain invested, it may lead to less profits for me…Also, I have been wanting to utilize this fund for building up my emergency fund…

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