Systematic Withdrawal Plan (SWP): A Smart Way to Invest in BAF
21 Aug 2025
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Secure Regular Income with SWP via Balanced Advantage Funds
For investors who prefer a steady stream of income, Systematic Withdrawal Plans (SWPs) have emerged as a great solution. Through SWPs, investors can draw a fixed amount from their investments at set intervals, ensuring regular cash inflow.
To structure withdrawals more efficiently, investors often look at ‘hybrid fund strategies’ particularly Balanced Advantage Funds (BAF), which actively adjust their mix of equity and debt in line with market movements, balancing risk and return. By doing so, they aim to provide a blend of stable income, capital preservation, and long-term wealth creation that suits varying risk profiles.
Illustration of Systematic Withdrawal Plan (SWP) Via BAF
- Mr. Smart invested Rs 50 Lakhs in Baroda BNP Paribas BAF on 14th Nov 2018 at a NAV of Rs. 10
- After 2 years of the investment, Mr. Smart set up a Systematic Withdrawal Plan (SWP) of Rs. 20, 000 monthly
- As on 18th Aug, Mr. Smart’s investment portfolio snapshot is as follows :
| Portfolio snapshot as on 18th Aug 2025 | |||||
|---|---|---|---|---|---|
| SWP Tranches (#) | Cumulative SWP Withdrawal (in Rs) | Balance Units | Current NAV (in Rs) | Current Portfolio Corpus (in Rs) | Cumulative Capital Gain |
| 58 | 11,60,000 | 4,35,372.62 | 24.0956 | 1,04,90,564 | 5,13,726 |
Why this investment was prudent for Mr. Smart
- Monthly cash flow of Rs. 20,000 totalling to Rs. 11.6 Lakhs from 14th Nov 2020 – 18th Aug 2025
- Portfolio value of Rs. 1.04 Cr as against an investment of Rs 50 lakhs despite systematic withdrawals
- Cumulative capital gain (Rs. 5.14 Lakhs) is considerably lower than the total withdrawal amount (Rs 11.6 Lakhs) & spread across multiple years thereby allowing tax-efficiency
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. The information provided is generic in nature and is for informational purpose only. Please consult your financial advisor before taking any decision.
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