3 Top Performing Hybrid Funds for SWP

Systematic Withdrawal Plan (SWP) in mutual funds is a facility offered by fund houses to withdraw money invested in a scheme at regular intervals.

The amount withdrawn via SWP offers you an opportunity to earn periodic income, while you continue to earn returns on the capital not withdrawn yet.

However, in case of withdrawals from pure equity funds there can be a concern that any large drawdown in the market can result in redemptions of large number of units.

Thus, to better protect the capital, investors can consider SWP from hybrid funds.

The lower downside risk and less volatile nature of hybrid funds make them more suited for SWP compared to equity funds.

One may consider choosing schemes from the following hybrid fund categories to begin SWP:

a) Aggressive Hybrid Funds - These funds invest 65-80% of their assets in equities with 20-35% in debt instruments.

b) Multi Asset Allocation Funds - These funds invest in at least 3 asset classes, allocating at least 10% in each of these asset classes.

c) Balanced Advantage Funds - These funds have the flexibility to dynamically allocate assets across equity and debt without any restrictions.

In this editorial, we have shortlisted the top-performing hybrid funds for SWP across each of these categories based on 3-year rolling returns.

Top Performing Hybrid Mutual Funds

Scheme Name	3-Yr (%)	Std Dev	Sharpe	Sortino
JM Aggressive Hybrid Fund	23.25	11.83	0.39	0.78
Quant Multi Asset Allocation Fund	22.35	11.6	0.39	0.92
HDFC Balanced Advantage Fund	21.88	8.68	0.45	1.08
CRISIL Hybrid 35+65 - Aggressive Index	12.84	8.33	0.23	0.5

Source: ACE MF

#1 JM Aggressive Hybrid Fund

Originally launched as a Balanced Fund in April 1995, this fund was recategorised and renamed to JM Aggressive Hybrid Fund in 2018.

Over the last few years, the fund has generated a lead over the benchmark and many of its peers, turning out to be a category topper.

In the last 3 years, JM Aggressive Hybrid Fund grew at an CAGR of 23.2% compared to 12.8% in the CRISIL Hybrid 35+65 Aggressive index.

As of 31 July 2025, the fund invested 77.4% of its assets in equities, 18.6% in debt instruments, and the balance in cash.

The fund's top stocks are Bharti Airtel (4.1%), L&T (3.8%), and HDFC Bank (3.6%).

Its top sectors are finance (15.5%), banks (14.9%), and infotech (9%).

The fund has benefitted from its high portfolio churn strategy and substantial exposure to lower marketcap stocks.

#2 Quant Multi Asset Allocation Fund

Launched in March 2001, Quant Multi Asset Fund was initially structured as a debt-oriented fund but was recategorised in 2018.

The fund is quick in its approach to shift allocation across marketcaps, sectors, and asset classes, depending on the market dynamics and outlook.

In the last 3 years, Quant Multi Asset Allocation Fund grew at an CAGR of 22.4% compared to 12.8% in the CRISIL Hybrid 35+65 Aggressive index.

As of 31 July 2025, the fund invested 41% of its assets in equities, 11.3% in debt instruments, 10.4% in silver ETFs, 7.8% in derivatives - futures, 3.9% in REITs & InvITs, and the balance in cash.

The fund's top stocks are SBI (8.6%), Premier Energies (6.3%), and JIO Financial Services (5.3%).

Its top sectors are banks (11.3%), insurance (8.4%), and finance (6.3%).

The fund's dynamic management of the portfolio has helped it navigate the tides of volatility and reward investors with satisfactory risk-adjusted returns.

#3 HDFC Balanced Advantage Fund

Launched in February 1994, HDFC Balanced Advantage Fund aims to identify high-conviction opportunities across both equity and debt segments.

The fund has substantially outperformed over the longer time frames, offering investors above-average returns.

In the last 3 years, HDFC Balanced Advantage Fund grew at an CAGR of 21.9% compared to 12.8% in the CRISIL Hybrid 35+65 Aggressive index.

As of 31 July 2025, the fund invested 65.4% of its assets in equities, 27.7% in debt instruments, and the balance in cash.

The fund's top stocks are HDFC Bank (5.5%), ICICI Bank (4%), and Reliance Industries (3.2%).

Its top sectors are banks (24.2%), finance (12.2%), and infotech (5.9%).

The fund has proven its ability to capitalise on market rallies and generate superior risk-adjusted returns for its long-term investors.

Who Should Consider SWP?

SWPs are suitable for conservative investors and retirees who are aiming for a consistent income stream, or investors looking for cash flows for future expenses.

Note that if the withdrawal rate is higher, the investment corpus may last shorter than when the withdrawal rate is low.

You need to ensure that you don't end up over-withdrawing. Otherwise, there is a risk of outliving the money needed to meet your retirement expenses.

There is no definitive answer as to what the withdrawal rate should be. However, a general rule of thumb suggests a SWP rate of 4% per annum.

However, this should ideally be used when a sufficient investment corpus is generated over the years and not when you have just begun your investment journey.

What Are the Tax Implications of SWP?

Withdrawals via SWP are treated as redemptions and thus they are subject to capital gain tax.

The gains on your equity mutual fund investments if withdrawn within 12 months from the date of investment, are treated as Short Term Capital Gains (STCG) and taxed at 20%.

If the investment is withdrawn after 12 months, the gains are called Long Term Capital Gains (LTCG) and are taxed at 12.5%, if the gains are more than Rs 1.25 lakh in a financial year.

If it is a debt mutual fund scheme from where you are doing systematic withdrawals, the net gains will be added to your gross total income and taxed as per your income-tax slab.

Besides, SWPs may also be subject to exit load, depending on the holding period.

Conclusion

The SWP option can provide you with steady cash flow with systematic withdrawals despite market volatility.

However, keep in mind that during prolonged downturns or bear market phases, the NAV of the mutual fund can fall and with SWP, the investment value may get depleted sooner than expected.

Opting for SWP in hybrid funds can help reduce the impact of market volatility and help you manage risk.

When opting for SWP, assess your needs, market conditions, tax aspects, and if it's truly worthwhile taking the SWP route.

#Table Note: Data as of August 24, 2025
The securities quoted are for illustration only and are not recommendatory
Past performance is not an indicator for future returns.
Returns are on a rolling basis and in %. Direct Plan-Growth option.
Those depicted over 1-Yr are compounded annualised.
Risk ratios are calculated over a 3-year period assuming a risk-free rate of 6% p.a.

Disclaimer: This write up is for information purpose and does not constitute any kind of investment advice or a recommendation to Buy / Hold / Sell a fund. Returns mentioned herein are in no way a guarantee or promise of future returns. As an investor, you need to pick the right fund to meet your financial goals. If you are not sure about your risk appetite, do consult your investment consultant/advisor. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. Registration granted by SEBI, enlistment of IA with Exchange and certification from NISM no way guarantee performance of the intermediary or provide any assurance of returns to investors.