Top Mutual Funds for Investing in Retirement

For most people, retirement planning might be intimidating. Mutual funds are one approach to ensuring a comfortable retirement.

Determining the top retirement funds in India for 2024 becomes vital in a world where financial security is imperative. By reading this blog, explore some of the top mutual funds for retirement planning based on three-year results.

List of India’s Top Retirement Mutual Funds for 2024 (based on 3-Year Returns)

The top retirement mutual funds for 2024 are shown in the following table, based on 3Y Returns:

Fund Names:

1. ICICI Prudential Retirement Fund Direct-Growth Pure Equity Plan
2. SBI Retirement Benefit Fund Direct-Growth Aggressive Plan
3. ICICI Prudential Retirement Fund Direct-Growth Hybrid Aggressive Plan
4. HDFC Retirement Savings Fund Direct-Growth Equity Plan
5. Nippon India Retirement Fund Direct-Growth Wealth Creation Scheme

An overview of the top mutual funds, according to 3Y Returns, for retirement planning

According to 3Y Returns, the top retirement mutual funds for 2024 are summarized as follows:

• ICICI Prudential Retirement Fund Direct-Growth Pure Equity Plan

1. As of March 31, 2024, the fund has an AUM of ₹649.09 crores and an expense ratio of 0.71%.
2. Of its investments, 93.75% are in equities, comprising 14.78% of mid-cap companies, 12.86% of small-cap stocks, and 53.3% of large-cap stocks.
3. Its principal investments include Bharti Airtel Limited, Maruti Suzuki India Limited, Ultratech Cement Limited, Larsen & Toubro Limited, DLF Limited, Tech Mahindra Limited, Ambuja Cements Limited, and more.
4. This investment fund has typically produced an annual gain of 22.58% for investors who have held their position for a minimum of five years. Furthermore, the rewards increase by 20% for every degree of risk accepted.

• SBI Retirement Benefit Fund Direct-Growth Aggressive Plan

1. As of March 31, 2024, the fund has an AUM of ₹2,213 crores and an expense ratio of 0.84%.
2. Out of its total investments, 93.65% are equity, with 45.41% coming from large-cap stocks, 16.33% from mid-cap companies, and 14.07% from small-cap stocks. It also allocates 4.09% of its debt, with 3.85% going toward government assets and 0.24% toward low-risk securities.
3. Its holdings include TVS Motor Company Limited, Abbott India Limited, Maruti Suzuki India Limited, Infosys Limited, Reliance Industries Limited, Timken India Limited, Hindalco Industries Limited, and more.

• ICICI Prudential Retirement Fund Direct-Growth Hybrid Aggressive Plan

1. As of March 31, 2024, the fund has an AUM of ₹366.59 crores and a 0.66% cost ratio.
2. Of its total investments, 80.02% have been allocated to equity, comprising 46.78% large-cap stocks, 20.73% mid-cap stocks, and 12.52% small-cap stocks. It also allows 7.87% to be in debt, of which 4.79% comprises government securities.
3. It owns Jindal Stainless Limited, Inox Wind Limited, Tech Mahindra Limited, Bharti Airtel Limited, Ambuja Cements Limited, GOI, Lupin Limited, Interglobe Aviation Limited, Ultratech Cement Limited, and more.
4. Investors who have kept this fund open for over five years have received an annual return of 17.85%.

• HDFC Retirement Savings Fund Direct-Growth Equity Plan

1. As of March 31, 2024, the fund’s AUM was ₹4,830.28 crore, with a 0.68% cost ratio.
2. Of its total investments, 89.74% are in equity, comprising 48.81% large-cap stocks, 9.45% mid-cap stocks, and 17.4% small-cap stocks.
3. ICICI Bank, HDFC Bank, Axis Bank, Bajaj Auto Limited, Infosys Limited, Bharti Airtel Limited, Larsen & Toubro Limited, State Bank of India, and ITC Limited are among its holdings.
4. This fund has yielded 20% higher returns for each risk invested in. 

• Nippon India Retirement Fund Direct-Growth Wealth Creation Scheme

1. As of March 31, 2024, the fund has an AUM of ₹3,003.63 crores and an expense ratio of 0.96%.
2. Of its total investments, 97.32% are in equity, comprising 53.92% large-cap stocks, 9.59% mid-cap stocks, and 8.11% small-cap stocks.
3. Among its interests are Bosch Limited, NTPC, Infosys Limited, Bajaj Finance Limited, Axis Bank, ICICI Lombard General Insurance, Dixon Technologies Limited, Cyient DLM, Kaynes Technology India Limited, and more.

Things to Think About Before Putting Money Into Retirement Funds in 2024

Before investing in the finest mutual funds for retirement planning, you should take the following considerations into account:

• Establish Your Investing Objectives

Please ensure the mutual funds you select satisfy your needs and inspire you by matching your investment goals with theirs. Specify your retirement objectives, including when you hope to retire, the lifestyle you want, and any significant costs you foresee, such as travel or medical care.

• Previous Results

Examine the mutual fund’s past performance over various periods. Seek mutual funds with a track record of reliable returns and evaluate each fund’s performance at its benchmark.

• Select Your Method of Payment

Depending on your future requirements and objectives, you can choose whether to receive a lump sum or regular payments at the end of your investing period.

• Tax Repercussions

Retirement funds have tax consequences, as returns are taxed when redeemed. Select tax-efficient investments to maximize your retirement savings, considering factors like the capital gains tax rates on debt and equity funds.

• Temporal Range

Think about how long you have until retirement. While shorter time horizons might necessitate more cautious tactics, longer time horizons might permit more aggressive investment techniques.

• Think About Your Tolerance for Risk

Investigate the kinds of assets retirement funds have to learn about the degree of risk and volatility associated with them. When assessing your risk tolerance, determine your level of comfort with market swings, age, and financial condition. While older investors might favour more safe investments, younger investors can typically afford to take on greater risk.

• Availability of liquid assets

Consider the mutual funds’ liquidity, mainly if you think you’ll need to access your money before you retire. Certain funds could impose limitations or fines on early withdrawals.

The Final Word

Investing in the top retirement funds might be wise for people hoping to improve their financial situation. But before purchasing these funds, evaluate your portfolio and consider the previously listed aspects.

Additionally, market risk might affect mutual funds. For extra advice, you should consider speaking with a financial professional or carefully selecting the mutual funds for your portfolio.

Notice of Disclaimer

This article makes no recommendations on the stocks it mentions. Before investing, please do your own research and due diligence. Investments in the securities market are subject to market risks; thoroughly review all relevant documentation before investing. Before investing in equity shares, derivatives, mutual funds, or other instruments traded on stock 

exchanges, please carefully read the Risk Disclosure papers. Investment goals cannot be assured or guaranteed to be met because they are vulnerable to market and price fluctuation risks.