HDFC Retirement Savings Fund Equity Plan:When it comes to saving money for retirement, the first things that come to mind are schemes like Public Provident Fund (PPF), Employees Provident Fund (EPF) or National Pension System (NPS). All these schemes are well-known schemes that provide financial security after retirement, in which a large number of people invest. But apart from these schemes, retirement plans of many mutual fund houses are also available in the market, which also include schemes focusing on investment in equity. These mutual fund schemes do not provide fixed or guaranteed returns like PPF or EPF, but there is definitely a possibility of getting high returns on the amount invested in them. HDFC Mutual Fund House also operates one such scheme, which is called HDFC Retirement Savings Fund Equity Plan. Launched on 25 February 2016, this retirement plan has given great returns to its investors in the last 5 years.
5 lakh rupees deposited from SIP of Rs 2600
If an investor had started a monthly SIP of just Rs 2600 after depositing just Rs 50,000 in HDFC Retirement Savings Fund Equity Plan 5 years ago, then he would have accumulated more than Rs 5 lakh by now. You can see the complete calculation of this return here:
HDFC Retirement Savings Fund Equity Plan (Direct)
- Upfront Investment 5 years ago: Rs 50,000
- Monthly SIP for 5 years: Rs 2600
- Annual rate of return on lump sum investment in 5 years: 27.91%
- Annualized return on Monthly SIP over 5 years: 31.07%
- Total investment (Lumpsum + SIP) over 5 years: Rs 2,06,000 (Rs 2.06 lakh)
- Current fund value of investments made in 5 years: Rs 5,05,745 (Rs 5.05 lakh)
Also read: Mutual Fund: Top 6 multi asset funds gave up to 32% return on SIP in 5 years, should you invest?
Benefits of investing through regular SIP
In the details given above, you can see that the rate of annualized return on SIP is better than the average annual return of lump sum investment. Actually, Systematic Investment Plan i.e. SIP means investing a fixed amount every month in a mutual fund scheme. Investment through SIP not only gives the benefit of compounding, but also helps in dealing with the fluctuations of the market in a better way. That is why continuing regular SIP for a long time is considered a very good way to invest in equity. Another benefit of this is that instead of investing a large amount at once, a large corpus can be raised by investing small amounts.
Also read: Mutual Fund Return: This is how 50 thousand rupees became 5 lakhs! Nippon India’s ETF gave bumper return in 5 years
Portfolio of HDFC Retirement Savings Fund Equity Plan
As per the latest data, equity accounts for 93.56% of the HDFC Retirement Savings Fund Equity Plan portfolio, while 0.81% of the investment is in real estate. The remaining 5.63% of the portfolio is held in the form of cash and cash-like assets. Large caps account for 50.28%, mid caps account for 22.11% and small caps account for 10.24% of the scheme’s equity portfolio. The top holdings of this fund include shares of big companies like HDFC Bank, ICICI Bank, Infosys, Axis Bank, Reliance Industries and SBI. As on August 23, the scheme’s asset under management (AUM) was Rs 5,923.79 crore. The expense ratio of the direct plan of this retirement fund is 0.67% and lump sum or SIP investment can be started in it from just Rs 100.
Also read: SBI Mutual Fund’s scheme to turn 1 lakh into 5 lakh, SIP of just Rs 1100 did wonders in 5 years
Invest with caution
The details of HDFC Retirement Savings Fund Equity Plan clearly show how high the equity exposure of this scheme is. The past returns of an equity fund cannot be considered as a guarantee of similar performance in the future. On the riskometer also, this scheme has been placed in the category of ‘very high risk’. Therefore, only those investors should invest in this scheme who have the ability to take the risk associated with the stock market. To benefit from investing in equity funds, one should stay for a long period. Therefore, only those people should invest in this scheme who can invest for at least 7 years or more.
(Disclaimer: Investment in mutual funds is directly affected by the fluctuations in the stock market. Our aim is not to advise investing in any fund, but only to provide information. Take any investment decision only after consulting your investment advisor.)
