Question

In the context of a SWP, what does 'Fixed Amount SWP' mean versus 'Fixed Units SWP'?

Accepted Answer

Fixed Amount SWP withdraws a fixed rupee amount each time, redeeming variable units; Fixed Units SWP redeems a fixed number of units each time, resulting in a variable cash amount — In a Fixed Amount SWP, the investor specifies a rupee withdrawal amount (e.g., ₹10,000/month) — units redeemed vary with NAV. In a Fixed Units SWP, a fixed number of units is redeemed each time — the cash received varies with the prevailing NAV.