Best SWP Mutual Funds in India 2022: Key Things to Keep in Mind

best swp mutual funds in India 2022

Best SWP Mutual Funds in India: Introduction

Every investor has different financial goals, risk appetite, age group, and time horizon. Based on their investment goals they plan their investment strategy which differs from person to person like a long-term investor will put his money in strong fundamentals stock for years/decades whereas a trader will try to gain quick profit by studying technical analysis and tracking price movements. In the same way, mutual funds offer various offers and benefits that suit different investors. 

Mutual funds offer various plans for different investors such as 

  1. lumpsum investment: Investors can invest a lump sum amount at once.
  2. Systematic investment plan (SIP): Investors can invest their money systematically (monthly or quarterly)
  3. Systematic withdrawal plan (SWP): Investors can earn regular income from the stock market.

What is an SWP mutual fund?

SWP stands for a systematic withdrawal plan, Investors who need regular cash flow in their bank account can prefer investing in the best mutual fund for SWP. It allows you to withdraw fixed amounts in a phased manner (monthly, quarterly or yearly) from a mutual fund. In this article, we will learn everything about the best SWP funds, their advantages, and some important things to consider before investing in the best SWP mutual fund

Best SWP mutual fund in India 2022

The best SWP mutual fund in India 2022 is given below:

Scheme NameAMC Name


(Till Date)

ICICI Pru Equity & Debt Growth PlanICICIMF267.1₹21,109 Cr
Franklin India Equity Hybrid Growth PlanFranklinMF207.2₹1,405 Cr
SBI Equity Hybrid Regular Growth planSBIMF226.9₹56,730 Cr
Quant Absolute Fund Growth PlanQuantMF331.7₹762 Cr
Canara Robeco Equity Hybrid Regular Growth Plan CanaraMF276.4₹8,509 Cr

(Data as of 25 November 2022)

Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns

  1. ICICI Pru Equity & Debt Growth Plan: ICICI Pru Equity & Debt Growth Plan was launched by ICICI prudential mutual fund that aims for generating long-term capital appreciation. The portfolio consists of equities, fixed income, and money market instruments. The morning star has given 5 stars rating to this fund and the YTD return is 2.65%.
  2. Franklin India Equity Hybrid Growth Plan: Franklin India Equity Hybrid Growth Plan is an aggressive hybrid fund that has majorly invested in domestic equities and a small proportion in mid-cap and small-cap stocks. This mutual fund plan aims for long-term capital appreciation and morning star has given a 4-star rating to this fund. 
  3. SBI Equity Hybrid Regular Growth plan: SBI Equity Hybrid Regular Growth plan was launched by SBI mutual fund house on 31 December 1995. This mutual fund aims to build long-term capital appreciation and it has diversified its portfolio majorly in growth companies and the rest in fixed-income assets. 
  4. Quant Absolute Fund Growth Plan: Quant Absolute Fund Growth Plan comes under Quant mutual fund that seeks long-term capital appreciation. Morning Star has given 5 stars to this fund. 
  5. Canara Robeco Equity Hybrid Regular Growth Plan: Canara Robeco Equity Hybrid Regular Growth Plan has a balanced portfolio which includes the majority of its investment in equities and the rest in bonds. They offer capital appreciation and high annual returns.

Few things to keep in mind before investing in the best SWP plan in India 2022

Before putting your hard-earned money into any financial instruments, you must analyze your risk tolerance, investment goals, and the time horizon of your investment. So, there are a few factors you need to consider before opting for the best SWP plans in India 2022

  • Capital deterioration: When you invest in a regular mutual fund, the number of mutual funds units increases with passing time but in the case of SWP mutual funds, the number of units keeps on decreasing over time as the cash inflow you receive comes from redeemed units of the mutual fund scheme held by you. For instance, you have invested Rs. 10 lakhs in a mutual fund scheme, when the NAV was Rs. 20. You were allotted 50,000 units of the mutual fund scheme at the time of investment and then you began a monthly SWP of Rs. 6000 after one year from the time of your investment date. 

Let's say, the NAV was 22 in the first month, and to generate a cash flow of Rs. 6000, the AMC redeemed 272.728 units (6000/22 NAV) of your mutual fund. So, the remaining units after the redeemed units will be 49,727.272 (allotted units at the time of investment - redeemed units). 

Therefore, In an SWP mutual fund, the units of your mutual fund scheme keep on decreasing with the passing time. The investment value can appreciate only when the NAV increases at a rate higher than the withdrawal rate. 

  • Financial goals: Investors always need to consider their financial goals while investing in the best SWP plans. The investment decisions must be aligned with your investment goals, it can be generating your retirement fund or buying a house or children's education. Therefore, if you are a conservative investor who does not want to take a high risk or if you are investing to create your retirement then investing in the best SWP mutual fund may not be a good investment option. You can opt for the best SWP funds If you can wait for a few years before starting an SWP plan. By doing this, your original investment will grow and can save capital gain tax. 
  • Market condition: The market condition is an important factor to consider before investing in the best mutual fund for SWP as the timing of your investment can impact your return on investment. If you invest during a bull market, there is a high probability that you will earn a good return on investment whereas if you invest during a bear market, it may not seem to be a good time to invest and you can lose money.

Therefore, research about the market condition and macro economic factors because these factors influence the stock market not only in India but around the world. 

  • Tax implication: If you are investing in the best SWP mutual fund in India 2022, you must be aware of the tax implications on it. Every redemption will be subject to capital gain tax in the SWP mutual fund.

Let's say you have invested in an equity mutual fund and your holding period is less than 12 months, the capital gains are subject to tax at 15%. On the other hand, if your holding period is more than 12 months, capital gains are taxable at 10%. So, the longer you hold, the less tax you have to pay. 

  • Pension: If you are looking for regular income or a fixed flow of income then using the best SWP plan can be a great choice. You can filter out the best SWP plans from a list of mutual funds which will meet your investment goals. 

Since there is a very limited source of regular income for retirees, they can go for it to meet their daily expenses. 

To conclude, investing in any type of mutual fund requires proper research and analysis. So, do your research about its expense ratio, AUM, redemption fee, and average return before investing in any best SWP plan. However, opting for the best SWP mutual fund is a good investment plan for those who want to earn regular income from the stock market and the best part is that there are no TDS applicable on gains and are tax-efficient. 

Important things to remember:

1. Do Not Blindly Follow Hot Tips

No matter how credible the source is, never follow a stock marketing tip blindly without conducting thorough research personally. Always select the stocks after doing proper research and analysis on the performance as well as the companies. While some tips can work out to give you huge benefits, the wrong ones can push you down under the risk pretty quickly. 

2. Eliminate Loser Stocks from Portfolio 

There is absolutely no guarantee that a stock will rise after a great fall. Know that it is extremely important to be practical about what is possible and what's impossible in the stock market. So, upon realizing that a stock is performing poorly in your portfolio, accept your mistake and sell it immediately to prevent further losses. 

3. Don't Exceed Your Investment Budget Abruptly 

While it's true that long-term investments are way better than other forms of investment, you shouldn't exceed your investment budget in a haste. Instead, decide on a fixed amount and invest it across various good stocks. Rather than investing in only one stock, divide your budget evenly across multiple good-performing stocks and shares. 

Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns

  • Is SWP preferable for retirees?

  • How do I choose the best SWP plan for 2022?

  • Is SWP non-taxable?

  • Can I withdraw from the SWP mutual fund anytime?


Disclaimer: This is not an investment advisory. The article above is for information purposes only. Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Past performance is not indicative of future returns. Please consider your specific investment requirements, risk tolerance, goal, time frame, risk and reward balance, and the cost associated with the investment before choosing a fund, or designing a portfolio that suits your needs. The performance and returns of any investment portfolio can neither be predicted nor guaranteed.