A mutual fund’s performance can be judged by comparing its annual returns over a period of time with those of its peers in the same category. Other factors that go into evaluating a fund scheme's performance include the reputation of a fund house, category of mutual fund, past performance of fund managers, et al.
Here we take a look at the retirement savings fund schemes only and the returns they gave in the past five years. Among the top performing funds, one that delivered a high return in the past five years was HDFC Retirement Savings Fund (equity) plan.
This mutual fund scheme gave a CAGR (compound annual growth rate) of 15.43 per cent in the past half a decade. The regular returns for this scheme were 13.89 percent during the same period, more than the benchmark returns of 12.96 percent given by Nifty 500 Total Return Index.
The risko-meter indicates that the risk involved in the scheme is ‘very high’.
The daily assets under management were ₹2,410 crore, according to the AMFI (Association of Mutual Funds in India) data.
It is important to note that HDFC Retirement Savings Fund has three variants. The one that has given maximum returns is an equity plan.
The other two variants are hybrid debt plan and hybrid equity plan. The hybrid debt plan gave 7.67 percent return in the past five years for its direct plan and 6.34 for its regular plan.
At the same time, hybrid equity plan delivered 12.64 percent for its direct plan and 11.14 percent for its regular plan in the past five years.
Returns by HDFC Retirement Savings Fund (equity) plan
|Benchmark returns (%)
(Source: AMFI; direct returns as on Sept 2, 2022)
Key details of the scheme:
This fund scheme was launched on February 25, 2016 as a retirement fund. It has a total expense ratio of 1.98 percent for its regular schemes and 0.98 percent for its direct schemes as on August 31, 2022.
The riskometer at the time of launch was moderately high and as on July 31, 2022, it rose to ‘very high risk’. In other words, investors understand that their principal will be at very high risk.
The scheme’s fund managers are Srinivasan Ramamurthy, Shobhit Mehrotra and Priya Ranjan.
There is no exit load upon completion of lock-in period. The fund has a lock-in period of five years from the date of allotment or retirement age of the investor i.e., 60 years, whichever is earlier.
The minimum application amount for investment is ₹5,000 and minimum additional amount is ₹1,000.