Best SWP Mutual Funds for Stable Returns in 2025
The stock market of India is seeing very high uncertainties currently, making the scenarios tough for investors. Big indices like the NIFTY 50 and S&P BSE Sensex have seen high fluctuations but the most affected funds are mid and small-cap stocks.
This changes are mainly taking place in the market because of the foreign investors taking out their funds during global economic and political uncertainties. Due to this, most of the investors are searching for financial options that will provide them stability and reliable income.
A Systematic Withdrawal Plan (SWP) has become popular in such times. In this plan, investors can withdraw a fixed amount from their mutual fund investments on a regular basis. And unlike traditional investment options, it provides steady income even when the market is not stable.
How SWP in Mutual Funds Works?
This lets investors to withdraw a fixed amount at set intervals by redeeming fund units. The number of units sold depends totally upon the fund’s NAV at the time of withdrawal. During the fluctuations in market and instability this make sure financial stability.
Taxation on SWP Mutual Funds
SWP’s only capital gains portion of the withdrawal is subject to tax unlike fixed deposits where full amount of interest earned is taxable.
If the investment is in equity mutual funds and is for more than 12 months, long term capital gains exceeding Rs.1.25 lakh are charged at 12.5%, whereas short-term gains are charged at 15%. Debt funds, however, are taxed according to the investor’s income bracket, according to new rules applicable from April 1, 2023. This makes SWPs a tax-effective means of earning regular income.
The fluctuations in market can result in panic among the investors. During the times when stock values drop many investors sell their investment at a loss.
However, SWPs prevents this by making sure regular withdrawals even when the market is down.
This strategy helps the investors from panic selling and enables them to remain invested for the long term. For this reason, they can gain if the market revives. SWP provides a systematized method of dealing with finances without disturbing long-term financial plans.
SWP Mutual Funds for 2025 on Performance Basis
Numerous equity mutual funds across different categories have performed very well in the current market scenario. The following funds have provided significant returns while proper management of risks.
Motilal Oswal Midcap Fund gave an absolute return of 60.12% on a one-year basis, with a CAGR of 31.98% over three years and 22.19% over five years. In the same vein, Nippon India Small Cap Fund returned 45.81% in one year, with 35.00% CAGR in three years and 23.69% in five years.
Nippon India Multi Cap Fund had 42.67% in one year, with a CAGR of 24.72% in three years and 18.90% in five years. Other significant performers are JM Flexicap Fund, which returned 54.19% in one year, with 26.13% CAGR in three years and 19.92% in five years, and JM Value Fund, which recorded 50.87% in one year, 26.17% in three years, and 18.89% in five years.
SBI Contra Fund also performed very well, with returns of 40.04% over one year, 29.88% over three years, and 19.88% over five years. HDFC Focused 30 Fund and Motilal Oswal Large & Midcap Fund also were comparable with one-year return of 39.14% and 51.56%, respectively. From other contenders, Bandhan Core Equity Fund yielded a one-year return of 48.48%, with three-year CAGR of 24.40% and five-year CAGR of 19.90%. Kotak Emerging Equity Fund, being another high performer, gave a 42.87% return in a year, 27.69% CAGR in three years, and 19.90% in five years.
Benchmark indices such as Nifty 500 TRI, Nifty 100 TRI, and Nifty Midcap 150 TRI showed consistent but relative returns, justifying this long-term growth prospect of well-run equity funds. Investors can make informed decisions for their SWP investments based on these returns, trading risk and returns for a consistent income stream in 2025.
