Bandhan Retirement Fund
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Retirement Planning: The Truth
Here are some interesting facts about the penetration of Retirement planning in India.
40% Urban Indians have not invested for their retirement so far
24% Indians don’t even know where to begin
1 in 3 Indians believe their savings will exhaust in 5 years of retirement
90% Indians above 50 years regret not starting earlier to save for retirement
Need for Retirement Planning: Life Expectancy
- Advancement in technology, healthcare and medical sciences has actually increased our Life Expectancy.
- This means we will live longer than the previous generations as you can see from the illustration along-side.
- As life expectancy increases we will need more funds and hence the need to plan for retirement.
Need for Retirement Planning: Inflation
- Inflation as we know erodes the value of money. So, what we get today for Rs.100 would cost more in the future.
- As you can see from the illustration alongside, Milk is around 166% costlier than what it was around 10 years ago. A kg of Apples are costlier by around 108% today over 10 years ago.
- If this is the rate of inflation one needs to plan well to manage retired life. If you add life expectancy to this equation, then the need for retirement planning becomes sacrosanct.
For Apple (1kg); the current price is from Big Basket. 10 year ago price (Inflation rate of 7.6%)
Retirement Planning: What can it Enable?
Maintain Standard of Living
After retirement, you can continue with the lifestyle you are accustomed to.
You can be self-reliant when it comes to expenses for you and your family.
Readiness for Emergencies
Correct planning can be helpful during emergencies. For Eg. Medical costs are high and they could end up causing a dent in your retirement.
Why choose a Mutual Fund for Retirement?
- It is estimated that 50% of equity assets held by retail investors do not remain for more than 2 years (Source: Amfi, data as on quarter ended June 2023)
- As you can see from the illustration alongside, the growth of investment at a CAGR of 10% is gradual for the 1st 2 years but becomes significant by the 5th year and more than doubles over 10 years.
- This is called compounding and generally kicks in by the 5th year and beyond. Compounding is required when the investor is aiming to create wealth.
- As a Retirement Mutual Fund has a lock-in of 5 years you automatically get the benefit of compounding.
Bandhan Retirement Fund: Construct
- The Bandhan Retirement Fund follows a Dynamic Asset Allocation strategy (just like a Balanced Advantage Fund).
- The Equity exposure in this fund will vary between 30 to 100% and hence Equity Taxation will apply. The maximum Debt exposure will be 35%.
- Exposure to Equity and Debt will be driven by an underlying model unique to Bandhan AMC.
- To summarize, this is an Equity oriented Mutual Fund which has the capability to manage Equity and Debt exposure and has a lock-in of 5 years.
Equity and Debt Investment Philosophy
Who can invest?
Someone who is 20-25 years from retirement can invest a small amount every month with a SIP and opt for SIP top-up (annual increase in SIP amount)
Someone who is 10-15 years from retirement can invest a lumpsum amount and simultaneously start a SIP and continue till earning.
Someone who is 5 years from retirement can invest a lumpsum amount keeping in mind the 5 year lock-in period.
28th September to 12th October 2023
CRISIL Hybrid 50+50 - Moderate Index.
Minimum Investment Amount: Rs.1,000/- and in multiples of Re. 1/- thereafter
SIP: Rs.100/- and in multiples of Re.1 thereafter
Mr. Viraj Kulkarni (equity portion) and Mr. Gautam Kaul (debt portion) Ms. Nishita Shah will be managing overseas investment portion of the scheme.
Lock-in of 5 years or till retirement age^ (whichever is earlier)
The investment objective of the Scheme is to provide long-term capital appreciation / income by investing in a mix of equity, debt and other instruments to help investors meet their retirement goals. However, there can be no assurance that the investment objective of the scheme will be realized.
^Retirement age is 60 years
Viraj KulkarniVice President – Equities
Mr. Viraj Kulkarni is a senior analyst and fund manager in the
Equity Fund management team of Bandhan AMC.
For almost a decade, Mr. Kulkarni has tracked sectors like IT Services, Cement, Building materials, etc. Prior to joining Bandhan AMC, he was associated with Franklin Templeton from May 2014 to September 2015 and Goldman Sachs from 2010 to 2012.
Mr. Kulkarni holds PGDM, CFA, and a B. Tech degree in Electrical & Electronics.
Gautam KaulSenior Fund Manager – Fixed Income
Mr. Gautam Kaul is the Senior Fund Manager in the Fixed Income
fund management team. With over 20 years of experience, Mr.
Kaul brings deep expertise in managing fixed income strategies
across the yield curve and has earlier managed assets of ~INR
27,000 crore across active as well as passive strategies.
He was earlier associated with Edelweiss Asset Management Company Ltd. as Fund Manager from December 2016 to November 2021 and was managing various schemes of Edelweiss Mutual Fund. Prior to this, he was also associated with IDBI Asset Management Company Ltd. as Fund Manager from March 2010 to November 2016 and was managing various schemes of IDBI Mutual Fund. His prior associations also include Religare Asset Management Company Ltd., Sahara Asset Management Company Ltd., and Mata Securities India Private Ltd.
Mr. Kaul completed his MBA and Bachelor of Commerce (Accounting & Finance) from the University of Pune.
Bandhan Retirement Fund
(An open-ended retirement solution oriented scheme having a lock-in of 5 years or till retirement age (whichever is earlier))
This product is suitable for investors who are seeking*
- Capital appreciation and income generation over long term.
- A hybrid scheme with investment in equity and equity related instruments as well as debt and money market instruments.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
(CRISIL Hybrid 50+50 - Moderate Index)