Top Performing SWP Mutual Funds in 2025

If one has ever wanted to sip on a cup of financial stability where one’s investments work their biceps for him or her, then an SWP might just be one’s cup of tea. Imagine money acting like a paycheck machine: regular income comes in and the principal amount keeps working, growing over time. In brief, SWP is simply the facility to withdraw a fixed sum of money at a periodic frequency from mutual fund investments. It finds the perfect balance between flexibility and stability. You get to have a very reliable income flow while still staying invested in the market.

Which Funds are Good for SWP?

While SWP can be availed on all mutual funds, there are some funds that are essentially investor darlings when it comes to the creation of SWPs. They usually fall under the hybrid category, a judicious mix of equity and debt. Hybrid Mutual Funds normally give decent returns with low volatility, making them excellent for long-term income planning.

Top Performing SWP Funds in 2025

Let’s take a look at a few of the best performing SWP mutual funds for the year 2024. It is important to note that the funds mentioned are not a recommendation or advisory:

ICICI Prudential Equity & Debt Fund

ICICI Prudential Equity & Debt Fund strikes a fine balance between equity and debt, hence offering the growth potential and income stability. A mix of equities for growth and debt for safety makes this fund an excellent option for clients seeking consistent income from their SWP. It’s designed for those who wish to maintain a level of stability while reaping market returns.

SBI Equity Hybrid Fund

The SBI Equity Hybrid Fund strikes a prudent balance between risk and reward by mixing equity and debt altogether, offering growth and stability. This is the perfect choice for retirees or conservative investors who need to achieve a steady income without necessarily exposing their portfolios to unwarranted risks. Given the stable performance of this fund with consistency in income, it becomes all the more worthwhile for investors who aim to set up an SWP.

HDFC Balanced Advantage Fund

The scheme is a very popular one because of its ability to change equity and debt portions in response to market conditions. It gives the fund manager the leverage to answer the market’s volatility with a view to ensuring sober and stable payout for investors subscribing to SWP. The flexibility, complemented by consistency, makes for a strong performer in this search for solutions that would generate long-term income streams.

UTI Flexi Cap Fund

With this view, UTI Flexi Cap Fund is its kind because it can invest in the top spectrum ranging from large-cap to mid-cap to small-cap companies. Such wide diversification provides a judicious blend of balanced risk for growth; hence, it is a favorite choice for SWP investors aiming for exposure across all market segments with steady income.

Mirae Asset Large Cap Fund

This fund provides stability and a long-term growth potential to the large-cap-oriented equity portfolio. It generally provides the SWP investor with a fairly steady, nonspectacular return and is considered one of their core favorites because it obviously has less volatility than the general market. Its large-cap orientation ensures that investors have a steady income stream without necessarily sacrificing growth.

Understanding SWP with Example

Rahul’s Example: SWP in Action Take for instance, Rahul, a professional who retired and invested ₹50 lakhs in a hybrid mutual fund offering SWP. He had to get a regular monthly payout as pension to meet his post-retirement lifestyle expenses. For the last 10 years, Rahul has been withdrawing ₹25,000 per month to cover his expenses. The best part? Despite the withdrawals, with market appreciation and right balance nature of the fund, the investment has grown to ₹60 lakh. Rahul now enjoys the steady income and a growing nest egg.

Advantages and Disadvantages of SWP Mutual Funds 2025

Advantages of SWP

Regular Income: SWP provides regular and predictable income, suiting retirees or any periodic payout seekers.

Tax efficiency: Only the capital gains component of the amount withdrawn is taxable; hence, SWP is more tax-efficient than a traditional fixed deposit or monthly income plan.

Liquidity: It allows the investor flexibility on how much and at what frequency he wants to draw, hence giving them full control over cash flows. Participation in the Market: When you are withdrawing income, your money remains invested, enabling it to keep pace with an appreciating market.

Disadvantages of SWP

Risks to the Market: The investment will continue to be in Mutual Funds, therefore, it is still necessarily exposed to market risks. This means that your investment value may decrease if the market is not going well. There’s also the risk of capital erosion, whereby if your withdrawals are higher than the returns that the fund realizes or earns, then you could eat into your capital and whittling down your investment over time.

Management Fees: In such SWPs, there are adjustments made to the likely management fees for mutual funds that could eat into returns.

Conclusion

Systematic Withdrawal Plans are an excellent way to generate regular income while maintaining your investment. While SWPs are also available in all Mutual Funds, the above-mentioned hybrid funds generally offer that perfect mix of growth and stability. In the case of retirees or conservative investors, SWPs become an excellent tool in the case of regular payouts on income without pulling out of the market completely. However, one should not completely forget the volatility in markets that could always result in erosion in one’s capital. But if investments are made in the right funds, your well-planned withdrawals promise a secured and regular monthly income in the future.

Suggested Read – Best Small Cap Mutual Funds to invest in October 2024