SWP vs Dividends Top Tips to Make Money: This mutual fund trick can make you rich, but you must pick options carefully
SWP vs Dividends: Mutual Fund SWP is given after a particular time period while the mutual fund dividends are given within a time frame.
Mutual fund investment help an investor increase their maturity amount to a huge extent with a simple spin in investment. This can be anything like annual step-up, SWP, Dividends, etc. However, which one to take at what time is important, after all, geniuses don't do different things, they do things differently. When it comes to Systematic Withdrawal Plan versus Dividends in mutual fund investment one must make sure that dividends are paid by the fund manager to the investor while the SWP is chosen by the investor himself.
Speaking on the difference between mutual fund SWP and mutual fund dividends, Vikas Puri, Vice President at Quant Capital said, "Mutual Fund SWP is given after a particular time period while the mutual fund dividends are given within a time frame. In fact, mutual funds SWP is chosen by the investor himself or herself while mutual fund dividends are awarded by the fund manager to the investor. However, these days, some of the mutual funds have started to give dividends after a fixed time period but such schemes are limited in the market." Puri went on to add that mutual fund dividends are generally given at a time when the equity market is on the rise.
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Elaborating upon which one is better and for whom, Kartik Jhaveri, Director — Wealth Management at Transcend Consultants said, "Those investors who want regular income after a fixed time interval should choose the mutual funds SWP mode while those who believe in an award on one's investment should go for the mutual fund dividend plan. However, mutual fund investors should avoid mutual fund SWP through equity mutual funds because it affects investment when stocks are on the downside. In such a scenario, more NAVs will have to sold out to get the fixed amount chosen for SWP."
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