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I want to know which are the good mutual funds to invest for SWP

I have just relocated from Gulf after retirement and need your advice on SWP. At present all my savings are in Bank Fixed NRE deposits giving me tax free returns of approx 8.75%. As I need Rs. 100,000 every month for my expenses would it be good to invest in SWP (equity) which I presume will be tax free. I would also like to know which are good Mutual funds to enable me to invest accordingly which will also give me very good returns. Also can you let me know if I should invest lumpsum in new NFO'S or existing funds and how much returns can one normally expect by investing in mutual funds?

Aug 23, 2016 by Prakash B Kadne, Borivali  |   Mutual Fund

1) In your retirement years SWP can be the most effective tool for getting a regular income along with decent long term returns.

However, please note that you should choose funds according to your risk taking ability. For example – if you are moderate to high risk taker, you may invest in Balanced Funds and opt for monthly SWPs. We have done a whole lot of series on this which you will find useful –

https://www.advisorkhoj.com/articles/Mutual-Funds...

https://www.advisorkhoj.com/articles/Mutual-Funds...

https://www.advisorkhoj.com/articles/Mutual-Funds...

https://www.advisorkhoj.com/articles/Mutual-Funds...

https://www.advisorkhoj.com/articles/Mutual-Funds...

https://www.advisorkhoj.com/articles/Mutual-Funds...

2) Similarly, if you are a moderate risk taker and can’t tolerate risk of equity investing then you can opt for SWP from Debt funds also. Please check this https://www.advisorkhoj.com/co...

3) Please note that if you are doing SWP from a balanced fund then all the withdrawals after one year will be treated as long term capital gains which is tax free in case of balanced and equity or equity oriented funds. But the question is – what to do if you want to withdraw through SWP route now? Then the answer is, that you put some amount, say 10% of the total investment in a liquid fund and 90% into a balanced fund. For the first year, withdraw from the liquid fund and after one year withdraw from the balanced fund.

4) However, in case of withdrawals from debt funds, you should note that the taxation is different. Long term capital gains are taxed @ 20% and available after 3 years of investments with indexation. Please read the following to understand the taxation better –

https://www.advisorkhoj.com/post-your-queries...

https://www.advisorkhoj.com/post-your-queries...

https://www.advisorkhoj.com/co...

5) Please also note that you should avoid investing in NFOs completely and always invest in time tested good performing funds suited to your risk profile.

6) Returns from mutual funds depend on the category of funds you are investing in, your investment time horizon and the market conditions during the holding period. But analysis of return of different asset classes show that equity as an asset class has given the best returns. Therefore, if you remain invested in equity or equity oriented mutual funds then chances are that you will beat returns of all other investments in the long run.

To have a look at the past returns of some of the categories of mutual funds, please check the following link –

Top Performing Large Cap Funds

Top Performing Mid and Small Cap Funds

Top Performing Balanced Funds

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