After Reliance, HDFC Mutual Fund is the latest fund house to get Central Board of Direct Taxes (CBDT) approval to launch its HDFC Retirement Savings Fund.
The NFO is expected to open in February, confirmed an HDFC fund official.
HDFC Retirement Savings Fund is an open ended scheme and has four investment options: equity plan, hybrid-equity plan, hybrid-debt plan and income plan. According to the draft offer document, the equity plan will invest a minimum of 80% of the scheme corpus in equity and a maximum of 20% in debt while the hybrid-equity plan will allocate a minimum of 60% in equity and maximum of 40% in debt. The hybrid-debt plan will invest a minimum of 70% in debt and a maximum of 30% in equity while the income plan will invest the entire corpus in debt and money market instruments.
After attaining 58 years of age (subject to completion of the lock-in period), investors can redeem the entire corpus lump sum or switch the accumulated corpus within the three other plans of the scheme or in any other open-ended schemes of HDFC Mutual Fund.
So far, only Reliance Mutual Fund has got CBDT approval to launch its retirement fund. Franklin Templeton (Templeton India Pension) and UTI (UTI Retirement Benefit Pension) have pension schemes which were approved long ago.
Sensing a big opportunity in the retirement space, fund houses are making a beeline for launching retirement products by filing offer documents with SEBI. Axis, HDFC, Canara Robeco, DHFL Pramerica and SBI have already filed draft offer documents with SEBI and are awaiting approval from CBDT. Other fund houses too are expecting to get CBDT nod soon.
Distributors say that the existing retirement funds have received a mixed response from investors and more retirement products will ensure that investors get a better choice.
