For investors seeking a steady income stream from their investments while simultaneously growing their wealth, Systematic Withdrawal Plans (SWPs) combined with hybrid mutual funds have proven to be a powerful strategy. A recent 10-year study, covering the period from July 1, 2017, to June 24, 2026, highlights how various hybrid funds have excelled under this approach, generating regular monthly income without depleting the original corpus.
Unlike Systematic Investment Plans (SIPs) where money is regularly invested, an SWP allows investors to withdraw a fixed amount periodically, with the remaining corpus continuing to be invested in the market. This method is particularly attractive for retirees or individuals looking to create a consistent cash flow from their accumulated savings.
Methodology and Key Findings
The analysis, based on data from AdvisorKhoj, simulated an initial lump sum investment of ₹10 lakh with a monthly withdrawal of ₹5,000. Over 108 monthly withdrawals, a total of ₹5.4 lakh was paid out to investors. Despite these regular payouts, many hybrid funds not only sustained the withdrawals but also significantly increased the investment's closing value.
Leading the Pack: Quant Multi Asset Allocation Fund
The Quant Multi Asset Allocation Fund – Growth Plan emerged as the top performer, achieving an impressive 17.58% annualised SWP return. After facilitating ₹5.4 lakh in withdrawals, the initial ₹10 lakh investment grew to a substantial ₹38.51 lakh, marking the highest closing corpus among the 15 funds evaluated.
Following closely, the ICICI Prudential Multi Asset Fund – Growth secured the second position with a 15.65% annualised return, leaving investors with a corpus of ₹31.81 lakh. The Quant Aggressive Hybrid Fund – Growth Plan ranked third, generating 15.46% annualised returns and ending with a corpus of ₹31.25 lakh.
Strong Performance Across Hybrid Categories
The study underscores the robust performance of hybrid funds, especially multi-asset and aggressive hybrid schemes. These funds strategically diversify investments across equities and debt, with multi-asset funds often including commodities like gold, which helps mitigate risk while capitalizing on market growth opportunities.
Other notable performers in the top 10 included:
- ICICI Prudential Equity & Debt Fund (15.38% return)
- HDFC Balanced Advantage Fund (13.78%)
- Kotak Aggressive Hybrid Fund (12.51%)
- Canara Robeco Equity Hybrid Fund (12.31%)
- Mirae Asset Aggressive Hybrid Fund (12.26%)
- Edelweiss Aggressive Hybrid Fund (12.23%)
- SBI Equity Hybrid Fund (12.13%)
All these schemes provided annualised returns exceeding 12%, even with consistent monthly withdrawals.
Positive Outcomes Even for Lower-Ranked Funds
Even the funds ranked lower in the analysis, such as DSP Aggressive Hybrid Fund, UTI Aggressive Hybrid Fund, JM Aggressive Hybrid Fund, HDFC Hybrid Equity Fund, and SBI Multi Asset Allocation Fund, delivered positive outcomes. These schemes generated annualised returns between 11.05% and 11.89%. Crucially, investors not only received their ₹5.4 lakh in monthly withdrawals but also retained investment values ranging from ₹19.62 lakh to ₹21.51 lakh at the end of the decade.
A Word of Caution
While the AdvisorKhoj data demonstrates the effectiveness of hybrid funds in supporting SWPs, it is essential to remember that historical performance is not indicative of future results. Mutual fund investments are subject to market risks, and returns can fluctuate.
Financial advisors typically recommend aligning monthly withdrawal amounts with expected long-term returns and regularly reviewing the SWP plan. An overly aggressive withdrawal rate can deplete the corpus, particularly during extended market downturns. Investors should always consider their individual risk appetite, investment horizon, and financial objectives before committing to an SWP strategy with any hybrid fund.