Can a Rs 1 lakh investment generate more than Rs 2 lakh through monthly withdrawals? These aggressive hybrid mutual funds show how an SWP can provide regular cash flow, but investors should understand the risks before relying on past performance.
✨ Key Takeaways
For many investors, generating a regular income from their investments without completely depleting their corpus is a key financial objective. This is where a Systematic Withdrawal Plan (SWP) can prove useful.
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What is a Systematic Withdrawal Plan (SWP)?
An SWP allows investors to withdraw a fixed amount from their Mutual Fund investment at regular intervals while the remaining amount stays invested and continues to participate in market growth. This feature makes SWPs popular among retirees as well as investors looking for a steady cash flow.
Also Read – These Small Cap Mutual Funds Turned Rs 5 Lakh Into Over Rs 32 Lakh
The data below highlights some of the best-performing Regular Aggressive Hybrid Mutual Funds based on an SWP illustration, where an investor invested Rs 1 lakh on January 1, 2012, started withdrawing Rs 3,000 every month from January 1, 2013, and continued the withdrawals until July 21, 2026.
Best Aggressive Hybrid Funds for SWP
|
Scheme Name
|
Launch Date
|
Lumpsum Investment (in Rs)
|
No of Mly. Installments
|
Total Withdrawal (in Rs)
|
Current Value (in Rs)
|
XIRR (in per cent)
|
|
SBI Equity Hybrid Regular Growth
|
01-12-1995
|
1,00,000
|
68
|
2,04,000
|
1,267
|
22.36
|
|
ICICI Prudential Equity & Debt Growth
|
05-11-1999
|
1,00,000
|
65
|
1,95,000
|
829
|
21.40
|
|
Tata Aggressive Hybrid Fund Regular Growth
|
08-10-1995
|
1,00,000
|
64
|
1,92,000
|
1,616
|
21.16
|
What Does This Data Indicate?
The illustration shows that investors who stayed invested for the long term were able to withdraw significantly more than their initial investment through monthly SWPs. For example, an investment of Rs 1 lakh in SBI Equity Hybrid Regular Growth generated Rs 2.04 lakh through monthly withdrawals while still leaving a small balance in the investment at the end of the withdrawal period.
Don’t Select an SWP Based Only on Historical Returns
While past XIRR and withdrawal performance provide useful insights, they should not be the only factors considered before selecting an SWP.
Investors should also evaluate Portfolio quality and asset allocation, the fund manager’s investment approach and the risk profile of the scheme.
Disclaimer: The article is for informational purposes only and not investment advice.