What is Systematic Withdrawal Plan?

What is Systematic Withdrawal Plan?

A Systematic Withdrawal Plan (SWP) is a facility that allows an investor to withdraw funds from an existing mutual fund scheme at predetermined intervals. The money withdrawn from a systematic withdrawal plan can be reinvested in another portfolio or it can be used as a source of regular income. Investors looking for income at periodical intervals usually invest in SWP. Often, a SWP is used to fund expenses during retirement. What are types of SWPs? Withdrawals can be of fixed or variable amounts. These withdrawals can be made on a monthly, Quarterly, semi-annual or annual schedule. The holder of the plan may choose withdrawal intervals based on his or her commitments and needs. SWP is usually available in two options: Fixed Withdrawal - Under this you specify amount you wish to withdraw from your investment on a Monthly/ Quarterly basis. Appreciation Withdrawal - Under this you can withdraw your appreciated amount on a Monthly / Quarterly basis. How does SWP work? Let's understand this process with the help of an example: Let's say you have 5,000 units in a Mutual Fund scheme. You have given instructions to the fund house that you want to withdraw ₹ 8,000 every month through SWP. Now let's assume that on 1st December, the Net Asset Value (NAV) of the scheme is ₹ 20. Equivalent number of MF units = ₹ 8,000 / ₹ 20 = 400. Hence, 400 units would be redeemed from your MF holdings, and ₹ 8,000 would be given to you. Your remaining units will be 4,600 (5,000 - 400= 4,600). Now say, on 1st January, the NAV is ₹ 16. Equivalent number of units = ₹ 8,000 / ₹ 16 = 500 Hence, 500 units would be redeemed from your MF holdings, and ₹ 8,000 would be given to you. So your final remaining units will be 4100 (4600 - 500 = 4100). In this way, units from your mutual fund holdings are redeemed in a systematic way to provide you with continuous income

Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015

1. BNP Paribas Long Term Equity Fund

2. Axis Tax Saver Fund

3. IDFC Tax Advantage (ELSS) Fund

4. ICICI Prudential Long Term Equity Fund

5. Religare Tax Plan

6. Franklin India TaxShield

7. DSP BlackRock Tax Saver Fund

8. Birla Sun Life Tax Relief 96

9. Reliance Tax Saver (ELSS) Fund

10. HDFC TaxSaver

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UTI MNC Fund Online

Invest in UTI MNC Fund Online As markets have turned extremely volatile in the past few months, investing in a quality portfolio with a multi-cap focus has become the need of the hour. One such scheme which has performed well is UTI MNC Fund (launched in 1998). The scheme is managed by Swati Kulkarni. There are four main advantages of investing in the scheme.First, it sharply focuses on multi-national companies across sectors whose products are accepted not only in India but also outside India. Such diversified geographical presence helps the fund manager in maintaining a balanced portfolio. Second, in times when demand is low, such companies whose products have high acceptability, tend to do relatively better than peers. Third, the scheme follows a buy-and-hold strategy in picking companies, which provides handsome returns in the long term. Fourth, the scheme does not have a large cap bias and also has mid-cap MNCs. The scheme has beaten its benchmark indices Nifty MNC and C...

HDFC Equity Savings Fund Online

Invest HDFC Equity Savings Fund Online HDFC Equity Savings Fund, an open-ended equity scheme, after its repositioning, has announced its maiden dividend as under: Name of the Fund Dividend Per Unit # Record Date Face Value (per unit) HDFC Equity Savings Fund Re. 1 28 th April, 2016 Rs. 10 # The dividend will be subject to the availability of distributable surplus and may be lower, depending on the distributable surplus available on the Record Date. Pursuant to payment of dividend, the NAV of the Dividend Option(s) of the above Scheme(s) would fall to the extent of payout and statutory levy, if any. The HDFC Equity Savings Fund takes exposure to both equity and debt asset classes like a Balanced Fund, but lowers volatility from equity markets by partly hedging the equity exposure. Lower unhedged Equity exposure ensures lower volatility while the combined exposure of Equity + Arbitrage offers the tax efficiency of equity oriented funds while offering highe...

Mutual Fund Review: Franklin India Taxshield

It maintains a diversified equity portfolio across sectors and market caps. It tends to maintain a relentless focus on long-term and ignores momentum to a large extent. So, sectors on a high metals and construction in 2007 - will not lead the fund to buy the stocks even at the cost of lower returns. In 2009, the FMCG allocation began to drop towards the year-end, despite the market rallying from March. This again shows the manger sticks to his convictions and does not get swayed by the market. In 2008, it was the third-best performing fund in its category. Instead of resorting to aggressive cash calls (averaged 5per cent), the fund increased its exposure to FMCG and healthcare. The distinct large-cap bias came to its rescue. Though in a rising market (2009), the fund was an average. The majority of the portfolio is held for long and some favourites (Infosys, L&T, Grasim Industries, RIL, Cummins India, Marico) have been around for a long period. The fund takes small position...

Balanced Funds Online

Invest Balanced Funds Online Balanced funds typically maintain an allocation between 65-75% to equity, and the rest in debt. The minimum 65% allocation to equity is to ensure that the fund qualifies for equity taxation. Further, the discretion to vary the allocation lies with the fund manager based on his market views. As an investor, in case you would like to manage the asset allocation, you could invest in a mix equity funds or shares or ETFs , debt, etc. and rebalance the portfolio according to your views. But you should also consider the cost-benefit implications including transaction costs, taxation, etc. of frequent re-balancing. An annual review and re-balancing (if required) of one's portfolio is normally considered adequate. ----------------------------------------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saving Mutual Funds to invest in India for 20...

How to diversify your Portfolio

Look at your portfolio. Do you hold more than five equity funds or carry fixed deposits in more than five banks? If so, you are probably suffering from compulsive diversification disorder! In this article, we ask a fundamental question: Do you really diversify? If so, how? A la carte portfolio Diversification is a process where you hold investments that do not all decline at the same time. In an ideal world, this means you should create a portfolio that has weakly-correlated assets. So, if one investment declines significantly, another will fall only marginally or move higher. But in the globalised world, it is difficult to create such a portfolio, as all assets are often strongly correlated to each other. In such a situation, the best you can do is to create a portfolio with assets that do not all decline by a large amount at the same time. Yet, that is what happens in a global crisis in 2008. Why? In such times, all asset classes tend to move closely, as in...

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