How to Use a SWP Calculator for Investing in New Fund Offers (NFOs)?

Investing in mutual funds, stocks and other securities helps investors to generate wealth over a long period. Apart from systematic investment plans, a systematic withdrawal plan or SWP can deliver various benefits to investors. Serving as an effective investment strategy, a SWP helps investors withdraw a fixed sum at regular intervals while keeping the remaining amount invested. The plan allows investors to generate a fixed income post-retirement and get the benefits of compound returns on the remaining amount that stays invested.

Investors can receive the same benefits of using a SWP calculator for investment in new fund offerings or NFO. Let’s explore how an SWP calculator can prove beneficial for investment into NFOs.

What is an SWP calculator?

An SWP calculator serves as an online tool that helps investors identify a fixed amount that they can withdraw from their investment corpus. Providing various details like the investment amount, the fixed sum for withdrawal, rate of return, and withdrawal frequency, investors can receive all the necessary information like the withdrawal amount and returns their remaining sum can generate. Making the process of financial planning easier and more effective, investors can arrive at a fixed sum which they can withdraw and get all the necessary benefits of long-term investment.

How to use a SWP calculator for investment into new fund offers or NFOs

New fund offers our dedicated schemes which acid management companies launch for investors. These schemes are made available for a fixed subscription period before they are listed on the stock market. Catering to a particular theme or sector, new fund offers serve as an essential tool for investors who wish to diversify their overall portfolio by investing in new and upcoming sectors like information technology and healthcare. However, with no history of past performance and returned generation capacity, these NFOs pose a certain risk for beginners as well as experienced investors. Therefore, an SWP calculator can help with decision-making regarding investments in NFOs.

The following steps can be followed for investment into an NFO using a SWP calculator:

1. Investors must first enter the amount they wish to invest in a new fund offer.
2. Frequency of withdrawal is the next value that must be filled in the SWP calculator. Investors have to specify a fixed sum they wish to withdraw from their investment corpus at specific intervals like monthly or quarterly.
3. Investors must then enter the expected rate of return that an NFO can deliver. Being a new fund offering by an asset management company with no past performance, investors can rely on general market trends and the movement of a particular sector that the NFO will cover.
4. The withdrawal amount which the investors wish to withdraw is to be inputted into the calculator. Proper precaution and analysis are essential to protect the total investment corpus for a long period.
5. The total time period over which the investor wishes to withdraw be fixed amount must be inputted as well. This period must align with their ultimate financial goal.
6. After providing all the necessary details, investors receive information like the total returns, the duration for which the invested amount will last, and the investment balance after every withdrawal. All these details make an investment in an NFO optimized, streamlined, and more reliable. Moreover, investors can receive the desired results and correct information about various aspects that are essential for investment into a new fund offer.

Conclusion

Careful planning using an SWP calculator for investment into NFO can help investors with their ultimate financial goals and reduce any future risks as well.

Finance