PGIM India Mutual Fund has launched a new investment option to help people save for their golden years. The PGIM India Retirement Fund is an open-ended scheme with a lock-in period of five years or until retirement age of 60(whichever comes first). This means you can’t withdraw your money for at least five years, encouraging you to stay committed to your savings goals.

The lock in period is also applicable when investor moves out of the PGIM India Retirement Fund to any other scheme within the fund house, before the mandatory lock in period of 5 years or retirement age, whichever is earlier.

How does the fund work?

The fund invests in a mix of assets, including stocks, bonds, and real estate investment trusts (REITs). This diversification helps spread out your risk and potentially improve your returns over the long term. The fund managers aim to choose companies with good growth potential and sustainable business models.

Key Details about the Fund

1. 
   Opens for subscription on March 26, 2024, and closes on April 9, 2024.
2. 
   Invests in a mix of stocks, bonds, and REITs.
3. 
   Minimum investment of Rs 5,000 and additional investments of Rs 1,000 or more.
4. 
   Lock-in period of 5 years or retirement age (whichever comes first).
5. 
   Exit load (fee for withdrawing money) – Nil
6. 
   PGIM India Retirement Fund will be benchmarked against the S&P BSE 500 Index TRI (Total Returns Index).  
7. 
    The portfolio is expected to have a minimum 25% allocation towards large cap, midcap and small cap segments of the market, respectively.  

“There is a continuing opportunity for investing in high growth and good quality Large and Mid-Cap companies which can take advantage of the India growth story. Such companies can continue to compound capital at a rapid pace in a capital-efficient manner for a long period of time. Thus, a diversified portfolio of high growth and good quality stocks can help build a robust retirement corpus,” said Vinay Paharia, CIO, PGIM India Mutual Fund.

Minimum Application Amount:

1. 
   Initial Purchase/Switch-in – Minimum of Rs. 5,000/- and in multiples of Re. 1/-thereafter.
2. 
   Additional Purchase – Minimum of Rs. 1,000/- and in multiples of Re. 1/-thereafter.
3. 
   For SIPs – Minimum no. of 5 installments and Minimum amount per installment – Rs. 1,000/- each and in multiples of Rs.1/- thereafter.

Why choose This Fund?

Goal-Oriented: This fund is specifically designed for retirement planning, helping you stay focused on your long-term goals.

Professional Management: Experienced fund managers will handle your investment, freeing you up to focus on other things.

Long-Term Growth: Investing in stocks has the potential for higher returns over time, which can help you build a larger retirement corpus.

“Living longer is an underappreciated risk into retirement and leaves everyone grappling to find solutions. Most of our life goals such as home, education, car, can be fulfilled with a conventional loan but when it comes to retirement, we can’t fund it with a loan. Thus, people need to prioritise building their retirement corpus. Having a trusted financial advisor to help you plan your investments with a goal-based approach is advisable. Investing in a dedicated fund earmarked for retirement also helps in staying committed longer towards your goal and benefit from long term compounding,” said Ajit Menon, CEO, PGIM India Mutual Fund.

The equity portion of the fund will be managed by Vinay Paharia, while the debt, REITs, & InVITs portion will be managed by Puneet Pal.

The fund will primarily use a bottom-up approach to identify companies with sound management and good growth prospects and a top-down approach for macro and thematic analysis. The fund managers would select companies with stable or high growth with due consideration to valuation. The fund managers would consider a range of quantitative and qualitative factors such as company’s business prospects, historical and present financial condition, capital allocation efficiency, operating cash flows, leverage position, valuation metrics, competitive edge, brand equity, strength of management and good corporate governance practices among others. The scheme may also invest in turn-around companies based on fund manager’s view.

First Published: Mar 27 2024 | 3:03 PM IST