If you had invested र 10 Lacs in the NFO of ICICI Prudential Dynamic in the month of October 2002 and withdrawn र 8,000 per month from November 2003 then the current value of your investment would have been र 1.46 Crores even after withdrawing र 12.16 Lacs!
To come to the above conclusion we have presumed that the lumpsum investment of र 10.00 was made on the Scheme inception date i.e. 31/10/2002. We have also presumed that the monthly Systematic withdrawal of र 8,000 was started after one year (starting date 01/11/2003) on the 1st date of every month so that each and every SWP withdrawal amount becomes tax free.
Please look at the chart below to understand how we have selected the different options in the research tool to get the results. You can also explore this SWP Research tool to explore SWP return of any fund you like.
Source: Advisorkhoj SWP Calculator
From the above chart you can see that the investor would have withdrawn a total of Rs. 12.16 Lacs through 152 instalments of monthly SWP amount of Rs. 8,000 each, thus, he would have got a tax free return of 9.6% every year. Even after withdrawing a tax free amount of Rs. 12.16 Lacs, the current value of his investment is an amazing Rs. 1.46 Crores!
The initial investment of र 10.00 Lacs was totally withdrawn through SWP of र 8,000 per month through 125 instalments. When the principal was totally withdrawn through the last instalment on 3rd March 2014, the fund value was र 1.08 Crores. Thereafter, the investor further withdrew another 27 instalments of र 8,000 each. The last being on 1st June 2016 and thereafter the Fund Value is 1.46 Crores.
The interesting point is that when the market hit its life time high in March 2015, ICICI Prudential Dynamic NAV on the SWP date of 02/03/2015 was र 196.3376 and the total value was at र 1.58 Crores which is approximately र 12 Lacs more than the current value. Please note that the investor withdrew another15 instalments from the highest value point of 02/03/2015 to till today’s value.
Download the cash flow in excel – Click here
We have analysed similar samples with other diversified equity funds and found that SWP returns of ICICI Prudential Dynamic Fund is one of the best amongst its peers.
ICICI Prudential Dynamic is a diversified equity fund with an asset size of Rs. 5,419 Crores (as on 30th April 2016). The fund is being managed by one of the best known fund managers Mr. Sankaran Naren and Mr. Atul Patel. Mr. Naren is the Executive Director and Chief Investment Officer of ICICI Prudential Mutual Fund, India’s No.1 Asset Management Company.
ICICI Prudential Dynamic is one of the most consistent performing equity mutual funds in the Multi-cap or Diversified fund category. This is an excellent fund to own in the volatile markets as it has the agility, aimed at capturing upside opportunities in the market across market capitalizations. This fund adopts a "Bottom-up" fundamental analysis strategy across market capitalizations on a diversified basis, to identify and pick its investments. Given the dynamic nature of the markets, the fund has the ability to attack by taking aggressive asset calls in equity and equity related securities. On the flip side it may also adopt a defensive strategy by investing in debt, money market instruments and derivatives as and when markets get overvalued.
ICICI Prudential Dynamic has also given excellent lumpsum returns. The current value of an investment of र 10 Lacs in the NFO (31/10/2002) of this fund would now be र 1.83 Crores, a CAGR growth of 23.87% since inception. You may check here Lumpsum Returns of ICICI Prudential Dynamic Fund
To know lumpsum return of any fund, you may like to check our LUMPSUM RETURNS CALCULATOR
The SIP returns of ICICI Prudential Dynamic have also been amazing! If you had started a monthly SIP of र 5,000 on 1st November 2002 then you would have accumulated a corpus of Rs. 32.63 Lacs as on today (NAV dated 10/06/2016) whereas you had invested only र 8.20 Lacs through 164 instalments of र 5,000 each. During this period the fund has given a XIRR return of 18.61% which is one of the best amongst the peer group of schemes.Check our SIP RETURN CALCULATOR
Further, if you see the chart below, you will notice that it has also beaten the NIFTY 50 index with a considerable margin.
Source: Advisorkhoj SIP Return calculator
You may also like to check the TOP PERFOMING SIP FUNDS of any category from here.
In a Systematic Withdrawal Plan (SWP), you regularly withdraw a fixed amount of money on a fixed date or dates from a fund. The amount to be withdrawn and the frequency of withdrawal/s are decided by the investor. You can have a weekly, fortnightly, monthly, quarterly or annual frequency for any fixed amount that you wish to withdraw. In an SWP you can draw a fixed amount, based on your income needs, at a frequency determined by you.
SWP withdrawals from an equity fund, after one year from the date of investment, is totally tax free as it is treated as a long term capital gains. It is an ideal investment option for investors with lumpsum investible surplus looking for regular income from their investments and at the same time want see their investments grow in value.
Try our SWP RETURN CALCULATOR to know SWP returns of your favourite funds.
Conclusion
ICICI Prudential Dynamic has given amazing SWP returns since inception and may be a good choice for investors looking for regular income from their lumpsum investments. However, investors should note that past performance of mutual funds are no guarantees for future returns. Mutual fund investments are subject to market risk and therefore investors must consult their financial advisors and check if investment in ICICI Prudential Dynamic is suited for their investment needs based on their risk profile.
Readers interested in knowing more about SWP, may read the following contents –
Mutual Funds are ideal investment option for retirement planning
Mutual Fund systematic withdrawal plans are smart option for income needs
Mutual Fund Investments are subject to market risk, read all scheme related documents carefully.
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Oct 11, 2024 by Advisorkhoj Team
Oct 11, 2024 by Advisorkhoj Team
Oct 11, 2024 by Advisorkhoj Team
Oct 11, 2024 by Advisorkhoj Team