Retirement MF AMC jumps 256% in 5yrs

Kolkata: Rising awareness of financial planning has fueled a 256 per cent increase in retirement mutual fund AUM in the last five years, according to a report.

Factors such as rising healthcare costs, increasing nuclear families, and higher life expectancy are likely to fuel further growth in this sector, an ICRA Analytics report said.

“Assets under Management (AUM) of these funds have grown by over 256 per cent in the last five years, reaching Rs 29,903 crore in July 2024, compared to Rs 8395 crore in July 2019," it said. ICRA said the growing awareness has led to a surge in the number of folios, which has increased by 17.44 per cent in the last five years to 29.36 lakh in July 2024, up from 25 lakh in July 2019. The number of schemes has also increased from 21 in 2019 to 29 in 2024.

A retirement mutual fund is a specialized investment vehicle designed to provide a secure and comfortable post-retirement life. These funds invest in both equity and debt, aiming to balance wealth appreciation and preservation offering a regular income stream during retirement and typically, these funds have a lock-in period of five years or until retirement. The average compound annualised returns on these funds stood at 26.21 per cent, 12.97 per cent and 14.09 per cent for a one-year, three-year and five-year period, the analysis found.