SBI Mutual Fund has launched SBI Retirement Benefit Fund, a solution-oriented fund that offers four plans across risk profiles - aggressive (equity-oriented), aggressive hybrid (equity-oriented), conservation hybrid (debt-oriented) and conservative (debt-oriented). The scheme comes with life insurance coverage of up to Rs.50 lakh per investor on SIP transactions of at least three years. Investors will have to opt for SIP with insure facility to get insurance coverage.
The investment amount is locked in for five years or until retirement (i.e., completion of 65 years of age), whichever is earlier. The fund may also invest in foreign equities, gold ETFs and REITs/InVITs depending on the asset allocation and investment strategy.
In a press release, Vinay M. Tonse, MD & CEO, said, “Most of us give serious thought to retirement planning when it is too late to build a sizeable corpus for our needs. This may lead to a compromised lifestyle and emergency during medical situations. Starting allocation, albeit in a small way, earlier from the age of 30 years and increasing it over time, gives a smart headway for the corpus to grow exponentially. The fund is an ideal fit, given its construct of being not only well-diversified across major asset-classes, be it equity, debt, gold ETF, REITs/InVITs and foreign securities, but also offering schemes with risk profile of choice coupled with rising insurance cover.”
D P Singh, Chief Business Officer, said, “On retirement-readiness front, we as a nation are grossly under-prepared & under-penetrated, financially. Also, market-linked retirement funds AUM at Rs. 11,944 crore is just about 0.38% of the total mutual fund industry AUM, which makes us, in an inflation-driven economy and in situation where life expectancy is only rising, hugely susceptible to ending up with very low retirement corpus. Thus, there is a need to grow market-linked allocation to retirement planning.”
“India is also expected to move from a predominantly young population to an aging population in the next 30 years. The fund is specifically designed as a solution to build a suitable retirement corpus for such individuals.” Singh added.
