Top 5 Retirement Funds with Highest Return: Investing in mutual funds is an essential part of long term planning for retirement. Retirement funds are specifically designed for this purpose. The top 5 retirement funds of the industry have more than doubled investors’ money while giving excellent returns in the last 5 years. These schemes have also given absolute returns of up to 92% on Systematic Investment Plan (SIP). These top schemes include retirement funds of leading fund houses like HDFC, ICICI Prudential and Tata, which have won the trust of investors with their strong performance.
What is the specialty of retirement fund?
Retirement funds are kept in the category of solution oriented mutual funds. Children’s funds, designed for the purpose of investing in the future of children, also fall in this category. Under SEBI rules, lock-in period is applicable on investment in any retirement fund. This lock-inThis is for a minimum period of 5 years, or the age of retirement, whichever is less. Due to this restriction, investors’ money may be locked for that period of time, but it also gives them the benefit of long term investment. The fund manager also gets a chance to make the right strategy for long-term investment.
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5 year performance of top 5 retirement funds
1. HDFC Retirement Savings Fund – Equity Plan
5 Year Average Annual Return on Lumpsum: 23.41% (Direct Plan)
Value of lumpsum investment of Rs 1 lakh after 5 years: Rs 2.86 lakh
5 year annualized return on SIP: 24.39% (Direct Plan)
10 thousand monthly SIP made in 5 years: Rs 10.98 lakh
(Absolute Return: 83.04%, Total Investment Rs 6 Lakh)
Benchmark Index: NIFTY 500 Total Return Index
5-year average return of benchmark index: 17.53% (CAGR)
Expense ratio: 0.71%
Asset Under Management (AUM): Rs 5,872.01 crore
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2. ICICI Prudential Retirement Fund – Pure Equity Plan
5 Year Average Annual Return on Lumpsum: 23.12% (Direct Plan)
Value of lumpsum investment of Rs 1 lakh after 5 years: Rs 2.83 lakh
5 year annualized return on SIP: 26.41% (Direct Plan)
Fund value of 10 thousand monthly SIP after 5 years: Rs 11.53 lakh
(Absolute Return: 92.1%, Total Investment Rs 6 Lakh)
Benchmark Index: NIFTY 500 Total Return Index
5-year average return of benchmark index: 17.53% (CAGR)
Expense ratio: 0.72%
Asset Under Management (AUM): Rs 1,021.62 crore
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3. ICICI Prudential Retirement Fund – Hybrid Aggressive Plan
5 Year Average Annual Return on Lumpsum: 18.33% (Direct Plan)
Value of lumpsum investment of Rs 1 lakh after 5 years: Rs 2.32 lakh
5 year annualized return on SIP: 20.65% (Direct Plan)
Fund value of Rs 10,000 monthly SIP after 5 years: Rs 10.03 lakh
(Absolute Return: 67.22%, Total Investment Rs 6 Lakh)
Benchmark Index: CRISIL Hybrid 35+65 Aggressive Index
5-year average return of benchmark index: 13.68% (CAGR)
Expense ratio: 0.86%
Asset Under Management (AUM): Rs 723.28 crore
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4. HDFC Retirement Savings Fund – Hybrid Equity Plan
5 Year Average Annual Return on Lumpsum: 17.24% (Direct Plan)
Value of lumpsum investment of Rs 1 lakh after 5 years: Rs 2.22 lakh
5 year annualized return on SIP: 17.85% (Direct Plan)
Fund value of 10 thousand monthly SIP after 5 years: Rs 9.37 lakh
(Absolute Return: 56.2%, Total Investment Rs 6 Lakh)
Benchmark Index: NIFTY 50 Hybrid Composite Debt 65:35 Index
5-year average return of benchmark index: 12.51% (CAGR)
Expense ratio: 0.92%
Asset Under Management (AUM): Rs 1,542.26 crore
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5. Tata Retirement Savings Fund Progressive Plan
5 Year Average Annual Return on Lumpsum: 16.47% (Direct Plan)
Value of lumpsum investment of Rs 1 lakh after 5 years: Rs 2.15 lakh
5 year annualized return on SIP: 18.83% (Direct Plan)
Fund value of 10 thousand monthly SIP after 5 years: 9.60 lakh rupees
(Absolute Return: 59.97%, Total Investment Rs 6 Lakh)
Benchmark Index: NIFTY 500 Total Return Index
5-year average return of benchmark index: 17.53% (CAGR)
Expense ratio: 0.54%
Asset Under Management (AUM): Rs 2,017.23 crore
Take decision considering risk-return
The top 5 retirement funds detailed above all have a very high risk level on the riskometer. Therefore, investors should consider both the risk and return of the scheme and reach a decision keeping in mind their investment objectives and risk appetite. It is always better to invest in these funds with a long term perspective. If investment is made through Systematic Investment Plan (SIP), it helps in reducing the risks associated with market fluctuations.
(Disclaimer: The purpose of this article is only to provide information and not to recommend investment. It is not necessary that the past returns of the mutual fund will continue in the future. Take any investment decision only after taking the opinion of a SEBI registered investment advisor. )
