Top SWP Mutual Funds for Steady Income Based on 5-yr XIRR

Are you wondering how you’ll manage expenses after retirement or supplement your current income? A Systematic Withdrawal Plan (SWP) might be the answer. Unlike traditional dividends, SWP allows you to withdraw a fixed amount from your mutual fund investments at regular intervals, regardless of the market’s performance. This feature makes it an ideal choice for those seeking a reliable income, whether retired or looking to start a new venture.

In this article, we discuss top SWP mutual funds in the large-cap category based on 5-yr XIRR.

Top SWP Mutual Funds for November 2024

Here’s a list of top large-cap mutual funds with a strong 5-year XIRR that could be ideal for a Systematic Withdrawal Plan:

Note: These funds have been selected based on their strong performance over the past 5 years. Let’s dive into why these particular funds are suitable for SWP investors. NAV is on November 12, 2024. 

• Nippon India Large Cap Fund – 18.66% XIRR

With an AUM of Rs. 34,105.04 crore, Nippon India Large Cap Fund offers a solid XIRR of 18.66%. 

• Expense Ratio: 1.57%
• Minimum SIP Amount: Rs 100
• Minimum Investment: Rs 100

• ICICI Pru BlueChip – 18.48% XIRR

ICICI Pru BlueChip, with an AUM of Rs. 63,669.82 crore, has an XIRR of 18.48%. 

• Expense Ratio: 1.45%
• Minimum SIP Amount: Rs 100
• Minimum Investment: Rs 100

• Canara Robeco Bluechip Equity – 17.62% XIRR

Canara Robeco Bluechip Equity stands out with its XIRR of 17.62% and an AUM of Rs. 14,580.92 crore. 

• Expense Ratio: 1.66%
• Minimum SIP Amount: Rs 100
• Minimum Investment: Rs 5000

• JM Large Cap – 17.51% XIRR

With a smaller AUM of Rs. 458.66 crore, JM Large Cap offers a competitive XIRR of 17.51%. 

• Expense Ratio: 2.36%
• Minimum SIP Amount: Rs 100
• Minimum Investment: Rs 1000

• Invesco India Large Cap – 17.16% XIRR

Invesco India’s Large Cap, with an AUM of Rs. 1,255.06 crore has generated a 17.16% XIRR return. 

• Expense Ratio: 2.09%
• Minimum SIP Amount: Rs 100
• Minimum Investment: Rs 1000

What is SWP and How Does It Work?

SWP is essentially the opposite of a Systematic Investment Plan (SIP). In a SIP, you invest a fixed amount at regular intervals, whereas, with SWP, you withdraw a fixed amount. Here’s how it works:

• Fixed Withdrawals: You can set a specific amount to be transferred monthly from your mutual fund investment to your savings account.
• Independence from Market Performance: Unlike dividends, which depend on the fund’s performance, SWP ensures you receive your set withdrawal amount regularly.
• Rupee Cost Averaging: Similar to SIPs, SWP allows you to take advantage of rupee cost averaging, reducing the impact of market fluctuations.

SWP Vs IDCW Payouts

• Guaranteed Withdrawals: IDCW payouts depend on the fund’s capital gains, but SWP provides regular withdrawals regardless of the fund’s performance.
• Control Over Cash Flow: With SWP, you control how much and how frequently you withdraw, providing flexibility tailored to your financial needs.
• Automated Process: You can automate your SWP for a specific period, eliminating the hassle of manual withdrawals.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.