Best SWP Mutual Funds in India

Everyone dreams of having a steady income especially after years of hard work. Whether you're preparing for retirement or just want some extra cash regularly, it can be tricky to make your savings last. The worry of running out of money can be stressful. That’s where the best Systematic Withdrawal Plan or SWP mutual funds in India come in. They offer a smart way to receive regular payouts from your investments while allowing the rest of your money to grow.

In this blog, we’ll explain what Systematic Withdrawal Plans (SWPs) are and how they work. We’ll also share a list of the best SWP mutual funds in India for 2024. These funds aim to provide you with a steady income while keeping your investments secure. If you're looking for an easy way to manage your money.

Best SWP Mutual Funds in India 2024

Motilal Oswal Nasdaq 100 ETF (MOFN100)

Motilal Oswal Nasdaq 100 ETF (MOFN100) is an exchange traded fund designed to replicate the performance of Nasdaq 100 Index which consists of the 100 largest non financial companies listed on Nasdaq Stock Market. These companies span various sectors primarily technology, consumer discretionary and healthcare. This ETF aims to provide returns that closely correspond to the total return of Nasdaq 100 Index, before fees and expenses.

Managed by Motilal Oswal Asset Management Company  the fund seeks to mirror the index’s performance through strategic stock selection and weighting. As an ETF, MOFN100 offers liquidity allowing investors to buy and sell shares on stock exchanges throughout the trading day at market prices. Investors can benefit from exposure to some of the most prominent U.S. companies like Apple, Microsoft and Amazon making it suitable for those seeking to invest in large cap, growth oriented stocks. Like other ETFs it charges an expense ratio to cover management fees and operational costs. This fund is particularly appealing to investors looking for long term growth through U.S. equities specifically in the tech sector. However, investors should review the prospectus to understand the strategy, risks and historical performance before investing.

Motilal Oswal Nifty Midcap 100 ETF

Motilal Oswal Nifty Midcap 100 ETF is an exchange traded fund (ETF) that aims to replicate the performance of the Nifty Midcap 100 Index. The index represents the 100 largest mid cap companies listed on the National Stock Exchange in India, providing exposure to a broad range of industries. This ETF offers investors an opportunity to diversify their portfolio by investing in mid sized companies which are typically in the growth phase and have significant potential for expansion. As a passively managed fund it seeks to closely track the index’s returns with low tracking error and offers the advantages of liquidity, transparency and lower costs compared to actively managed funds. ETF is ideal for investors looking for long term capital appreciation by investing in the midcap segment of the Indian equity market.

Aditya Birla Sun Life Nifty ETF

Aditya Birla Sun Life Nifty ETF is an exchange traded fund (ETF) that aims to provide returns by tracking the performance of Nifty 50 Index, one of India's major stock market indices. This ETF invests in the same stocks that constitute Nifty 50 in the same proportion offering investors a low cost way to gain exposure to the top 50 companies listed on National Stock Exchange. As a passive investment vehicle it aims to mirror the index's returns by replicating its composition without actively selecting or managing individual stocks. The fund is ideal for investors looking for broad market exposure, liquidity and low expenses while participating in India's equity market growth.

Quantum Nifty 50 ETF

Quantum Nifty 50 ETF is an exchange traded fund that aims to replicate the performance of Nifty 50 Index, one of India's premier stock market indices. This ETF provides investors with an opportunity to gain exposure to a diversified portfolio of 50 large cap companies listed on NSE. By mirroring Nifty 50 Index Quantum Nifty 50 ETF offers a low cost, passive investment option that seeks to closely track the returns of the index, making it suitable for investors looking for long term growth and stability. The fund is ideal for those wanting to invest in India's top companies across various sectors without actively managing their portfolio. Additionally, it offers liquidity, transparency and diversification benefits as the Nifty 50 represents a broad cross section of the Indian economy.

ICICI Prudential BSE Sensex ETF

ICICI Prudential BSE Sensex ETF is an exchange traded fund that aims to replicate the performance of BSE Sensex index which represents 30 largest and most liquid stocks listed on Bombay Stock Exchange. The fund allows investors to gain exposure to a diversified portfolio of blue chip companies across various sectors like finance, IT, energy and consumer goods all of which are part of BSE Sensex. Since it's an ETF, the units of the fund are traded on stock exchanges allowing investors to buy and sell them throughout the trading day. The fund is passively managed and its performance closely mirrors that of the underlying index. ICICI Prudential BSE Sensex ETF is suitable for investors seeking long term capital appreciation with low management costs as ETFs typically have lower expense ratios compared to actively managed funds.

Motilal Oswal Nifty 50 ETF

Motilal Oswal Nifty 50 ETF is an exchange traded fund that aims to provide returns by closely tracking the performance of Nifty 50 Index. Nifty 50 is a benchmark index comprising 50 large cap stocks from diverse sectors of the Indian economy. This ETF offers investors a low cost way to gain exposure to these leading companies. The fund follows a passive investment strategy meaning it replicates the index without active management. Motilal Oswal Nifty 50 ETF is suitable for long term investors looking for portfolio diversification and broad market exposure while benefiting from the growth of India's top companies.

LIC MF Gold Exchange Traded Fund

LIC MF Gold Exchange Traded Fund (ETF) is an open ended scheme that aims to track the performance of gold, offering investors an opportunity to invest in gold without the need to hold physical gold. The fund primarily invests in gold bullion and is designed to mirror the price movement of gold in the domestic market. The value of units in this fund fluctuates in line with gold prices, making it an attractive option for those looking to diversify their portfolio with an asset class known for its stability during economic uncertainties. Being traded on the stock exchange LIC MF Gold ETF allows investors the flexibility to buy and sell units at prevailing market prices during trading hours. The fund offers a cost effective and transparent way to gain exposure to gold as an investment with the added benefits of liquidity and convenience.

Invesco India Gold Exchange Traded Fund

Invesco India Gold ETF is an open ended exchange traded scheme that aims to track the performance of domestic gold prices. The fund invests in physical gold of 99.5% purity providing investors with a convenient and cost effective way to gain exposure to gold without the need to hold physical gold themselves. The primary objective of this ETF is to mirror the returns provided by gold, making it a popular choice for those seeking to diversify their portfolio with a reliable and historically valuable asset. Since it's traded on the stock exchange Invesco India Gold ETF offers liquidity and transparency allowing investors to buy or sell units during market hours. This fund is suitable for individuals looking to hedge against inflation or add stability to their investments with gold.

Aditya Birla Sun Life Gold ETF

Aditya Birla Sun Life Gold ETF is an exchange traded fund that aims to provide returns closely aligned with the performance of physical gold in the domestic market. This ETF offers investors an opportunity to gain exposure to gold without the need to physically hold the commodity, thus providing liquidity and ease of transactions. The fund primarily invests in gold bullion of 99.5% purity or higher and its value tracks the price movements of gold. Designed for those looking to diversify their portfolio, Aditya Birla Sun Life Gold ETF offers a convenient way to invest in gold, often considered a safe haven asset during times of economic uncertainty. Investors can buy and sell units of this ETF on the stock exchanges, ensuring flexibility and transparency in pricing.

SBI Gold ETF

SBI Gold ETF is an ETF that offers investors a convenient way to invest in gold without physically holding the asset. This fund seeks to provide returns that closely correspond to the performance of domestic gold prices. It does so by investing in physical gold of 99.5% purity or higher which is stored in secured vaults. SBI Gold ETF allows investors to gain exposure to gold's price movements in a transparent and cost effective manner. Additionally, it provides the flexibility of buying and selling units on the stock exchange during trading hours, making it a liquid and easily accessible option for investors looking to diversify their portfolios with gold.

What is SWP in Mutual Funds?

SWP or Systematic Withdrawal Plan allows you to take out a set amount of money from your mutual fund at regular intervals like monthly or yearly. It's great for people who want steady income from their investments without selling everything at once, making it ideal for retirees or those looking for passive income.

SWP lets you withdraw money regularly from your investment while the remaining amount keeps growing. It's different from withdrawing a large amount all at once (lump sum) or investing small amounts regularly (SIP). SWP gives you the advantage of both regular payouts and long term growth.

How Does SWP Work?

After you invest a lump sum in a mutual fund, you can set up a plan to withdraw a set amount at regular intervals this could be every month, every quarter or even every year based on your financial needs. Each time you make a withdrawal the mutual fund sells a part of your investment to give you the money. Meanwhile, the rest of your investment keeps growing.

For example, if you invest ₹50 lahks in a mutual fund with an average annual return of 15% and decide to withdraw ₹50,000 every month, you would receive a total of ₹90 lakh over 15 years. Even with these regular withdrawals, your investment would still grow and by the end of the 15 years, you'd have around ₹1.02 crore left. This shows how you can enjoy regular income while still growing your long term investment.

Benefits of Investing in SWP Mutual Funds

Investing in SWP mutual funds has several advantages:

1. Regular Income: SWP offers a steady cash flow making it a good option for retirees or anyone who wants consistent payouts without exhausting their investment.

2. Tax Benefits: Withdrawals are usually taxed as capital gains which often have lower tax rates compared to regular income helping you save on taxes.

3. Flexibility: Investors can choose how much and how often to withdraw allowing them to adjust based on their changing financial needs or market conditions.

4. Growth Potential: Even while you withdraw money your remaining investment can continue to grow, supporting longterm capital appreciation.

SWP mutual funds provide a nice balance of regular income, flexibility and growth potential making them a great choice for those looking to manage their income while also building wealth over time.

Risks Involved in SWP Mutual Funds

Systematic Withdrawal Plans can provide a steady income but it's important to be aware of the risks involved. Here are some key points to consider:

1. Market Volatility: SWPs are linked to mutual funds, so any market ups and downs can affect your returns. If the market drops the value of your investment may decrease resulting in lower withdrawal amounts or even loss of your capital over time.

2. Capital Erosion: Withdrawing too much can lead to depleting your initial investment especially during market downturns. It's essential to strike a balance between generating income and protecting your capital.

3. Fund Performance: Not all SWPs perform the same way. Choosing a fund that doesn’t do well can mean lower returns. It’s important to select SWP mutual funds with a strong performance history to reduce this risk.

4. Inflation Risk: If your withdrawal amounts don’t keep up with inflation, you could find that your money doesn’t go as far over time. Make sure to choose a fund that aims for returns above inflation to help maintain your purchasing power.

By understanding these risks and selecting a reliable SWP mutual fund with a good track record, investors can better manage potential downsides.

How Do Systematic Withdrawal Plans (SWP) Work?

Mutual fund companies that provide the best systematic withdrawal plans (SWP) allow investors to take a set amount of money out of their investment every month. Here are some guidelines showing how best systematic withdrawal plans function:

1. Investment Selection: Investors must first select a mutual fund plan with SWP as a potential investment option. Depending on their investment objectives, time horizon, and level of risk tolerance, they can choose from various fund kinds.

2. Lump Sum Investment: Typically, investors begin the best SWP mutual fund by making a lump sum investment in the mutual fund scheme of their choice- the corpus from which the regular withdrawals will be made in this initial deposit.

3. Withdrawal Frequency and Amount: Investors can choose the frequency of their withdrawals (monthly, quarterly, or annually), as well as the amount they want to take out. Depending on their demands for income and financial objectives, the decided amount may be either a fixed sum or a variable amount.

4. Crediting of Withdrawal: The investor's selected bank account is then credited with the withdrawal amount. As a result, the investor receives a consistent income stream to meet their needs while maintaining their best SWP mutual funds investment.

5. Customization and Flexibility: SWPs give investors options. The SWP may be changed or terminated at any moment. Investors can also choose an exact withdrawal window or an endless SWP.

6. Capital Appreciation: One of the prominent advantages of the best SWP mutual funds is that investors can continue to profit from future market expansion. They can benefit from capital gains and generate returns on their remaining investment by continuing to invest in the mutual fund.

Factors to Consider Before Investing in the Best SWP Mutual Fund in India 2024

The best mutual funds for SWP in India should be chosen after carefully weighing several variables. Before making an investment decision, consider the following significant factors:

● Investment Objective: Clearly state your investment goals, whether capital growth, consistent income, or a combination of both. Align your investing goal with the fund's mission, as best SWP mutual funds may cater to various objectives.

● Fund Performance: Evaluate the mutual fund's past performance. Look at how consistently it has produced profits during several market cycles. To determine the effectiveness of the fund, compare its performance to relevant benchmarks and comparable funds.

● Asset Allocation: Recognize the best fund for the SWP approach to asset allocation. Analyze the equity and debt instrument mix of the fund. A balanced allocation may offer stability and room for development depending on your risk appetite and investment objectives.

● Fund Manager Expertise: Assess the knowledge and performance history of the fund manager overseeing the best fund for SWP. The knowledge and investment philosophies of the fund manager greatly influence the fund's performance. Find a manager with a track record of success and a consistent approach to investing.

● Risk and Volatility: Consider the best SWP mutual fund risk and volatility. To determine how sensitive the fund is to market changes, consider its beta and standard deviation.

● Expense Ratio: Consider the best SWP mutual fund expense ratio. It indicates the annual fees deducted from the fund's assets. Long-term investment gains can be maximized with a lower expense ratio.

● Investment Horizon: Choose your investment horizon or when you plan to hold your best SWP mutual fund investment. The investing horizons and tactics of various funds may differ. Match your investing time horizon to the investment stance of the fund.

● Liquidity and Fund Size: Consider the size and liquidity of the mutual fund. More considerable funds typically have better liquidity and may incur less transactional expenses when purchasing or selling units.

● Exit Load and Expenses: Consider the best SWP mutual fund's exit load structure and any additional costs. Exit loads are fees assessed when your units are redeemed within a predetermined time frame. Make sure the fund's expenses are fair and in line with your investment goals.

● Tax Implications: Recognize how investing in the SWP mutual fund will affect your taxes. Depending on asset allocation and investment techniques, certain funds may have different tax treatments. To determine how tax-efficient the fund is, speak with a tax advisor.

● Regulatory and Compliance Factors: Consider the best fund for SWP for the house's standing and adherence to rules and standards for investor protection. Take into account the fund's track record of compliance, as well as its dedication to transparency and investor services.

Who Should Invest in SWP Mutual Funds?

A Systematic Withdrawal Plan in mutual funds is a great option for various types of investors especially those who want regular income. Here’s a simple breakdown of who can benefit the most from SWPs:

1. Retirees: Retirees often need a steady income to cover their living costs. An SWP lets them withdraw money from their investments while still allowing the remaining funds to grow.

2. Conservative Investors: For those who prefer a cautious approach, SWPs are ideal. They provide regular income without needing to sell all of their investments at once.

3. Long Term Investors: If you have long term financial goals but still want to generate income from your investments an SWP can help you strike a balance between growing your money and making withdrawals.

4. Parents Funding Education or Major Expenses: If you need regular cash for significant expenses like paying for your child's education or mortgage an SWP can help you plan and withdraw money in a systematic way.

Conclusion

Investing in India's top SWP funds can offer investors a well rounded strategy for generating income and pursuing potential development. These funds provide a practical option to continue investing in the market while receiving the best SWP for monthly income withdrawals. Before making an investment decision, it's essential to consider several aspects including fund performance, asset allocation, risk profile and expense ratios. Investors should match the best SWP in mutual funds for investment objectives, risk tolerance and time horizon. By carefully weighing these variables and consulting with financial consultants investors can benefit from the consistent income and growth potential provided by India's top SWP funds.