What is a Systematic Withdrawal Plan ?
The unitholder may set up a Systematic Withdrawal Plan on a monthly, quarterly or semi-annual or annual basis to: • Redeem a fixed number of units • Redeem enough units to provide a fixed amount of money What risks is one exposed to while investing in mutual funds? • Market risk If the overall stock or bond markets fall on account of macro economic factors, the value of stock or bond holdings in the fund’s portfolio can drop thereby impacting the NAV. • Non-market risk Bad news about an individual company can pull down its stock price, which can affect, negatively, funds holding a large quantity of that stock. This risk can be reduced by having a diversified portfolio that consists of a wide variety of stocks drawn from different industries. • Interest rate risk Bond prices and interest rates move in opposite directions. When interest rates rise, bond prices fall and this decline in underlying securities affects the NAV negatively. The extent of the negative impact is dependant on fact
