Swing pricing in mutual funds

Tue, 19 May 2026 00:00:00 +0000

Swing pricing is a SEBI-permitted liquidity-management tool that allows mutual funds to adjust the NAV applicable to large transactions to reflect the underlying transaction costs of those transactions. The mechanism protects remaining (non-transacting) investors from being diluted by large redemptions or subscriptions that incur material market-impact costs in the underlying portfolio.

For Indian retail investors, swing pricing rarely affects individual transactions (it triggers only at large transaction sizes), but the existence of the mechanism protects long-term holders from being penalised by other investors’ large flows.

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Swing pricing in mutual funds