ICICI Prudential Mutual Fund and Aditya Birla Sunlife MF have launched retirement schemes. These funds will compete with existing products in the market place such as Franklin India Pension Fund, UTI Retirement Benefit Pension Fund, HDFC Retirement Savings Fund, Tata Retirement Savings and Principal Retirement Savings.
Both the fund houses are offering plans based on various stages of life and time left for their retirement. Investments in these funds are locked in for five years. During the lock in period, investors have the option to switch from one plan to another without any exit load.
ICICI Prudential’s NFO closes on February 21. Aditya Birla Sunlife’s NFO is open till March 5.
Wealth managers said these products work well for investors who do not have the necessary discipline to stay invested.
“In an open end equity mutual fund, many investors start saving for retirement, but do not maintain discipline and exhaust the corpus midway for another goal or luxury. If it is tagged to a retirement goal, they will stay the course and hence such products work for them,” says Rupesh Bhansali, Head (Distribution), GEPL Capital.
Some financial planners believe it is not necessary to use retirement products only to meet your retirement goals. “For those who are disciplined and can follow asset allocation approach, you can use a judicious mix of products to plan for your retirement,” said says Kiran Telang, a Mumbai based financial planner.
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