Baroda BNP Paribas MF launches retirement fund NFO. This severance package has a fixed period of 5 years. Investors often wonder whether to choose a simple mutual fund or a solution-based retirement fund for their retirement planning.Why not consider investing in Baroda BNP Paribas Retirement Fund NFOAdditionally, what are the alternative mutual funds you can invest in for retirement planning?
Baroda BNP Paribas Retirement Fund NFO Issue Details
Details of the NFO issue are as follows:
| Fund name | Baroda BNP Paribas Retirement Fund |
| NFO is open | May 8, 24 |
| NFO closing | May 22, 24 |
| Scheme re-opened for continued purchase/sale | Within 5 business days |
| Minimum application amount | 1,000 rupees, thereafter in multiples of 1 rupee |
| Minimum SIP | 500 rupees for 6 months |
| Fund NAV | 10 rupees during NFO period. |
| entry road | Nothing |
| End of loading | Nothing |
| danger | very high risk |
| standard | Crysil Hybrid 35+65- aggressive index |
| fund manager | Pratyesh Krishnan Mayank Prakash |
Baroda BNP Paribas Retirement Fund NFO SID
Baroda BNP Paribas Retirement Fund NFO – What is the investment objective?
The scheme’s primary investment objective is to generate income and capital appreciation by investing in a diversified portfolio of equities, equity-related instruments and fixed income instruments with the aim of providing retirement solutions to investors. That’s it.
However, there is no guarantee that the investment objective of this plan will be achieved. This scheme does not guarantee/suggest returns.
What is the allocation pattern of this mutual fund scheme?
The investment pattern of this fund is as follows.
| Type of instrument | minimum% | maximum% | risk profile |
|---|---|---|---|
| Stocks and stock-related products | 65% | 80% | expensive |
| Debt and money market instruments Companies other than the above |
20% | 35% | low to medium |
| REIT and InvIT units | 0% | Ten% | Medium to high |
Why should I invest in Baroda BNP Paribas Retirement Fund NFO?
This retirement benefit has a fixed term of 5 years or until your retirement age, whichever is earlier. This helps investors invest in such funds for medium to long term.
Baroda BNP Paribas Retirement Fund NFO – Risk or Negative Factors
You should consider some of these risk factors/negative factors before investing.
- This retirement benefit has a fixed term of 5 years or until your retirement age, whichever is earlier. It is good that the investment is locked and such investment grows, but you cannot withdraw the investment in case of emergency.
- The fund invests 65% to 80% in stocks and is high risk.
- The Fund invests in fixed income instruments that are subject to interest rate risk, reinvestment risk, liquidity risk and default risk.
- The fund also invests in REITs and InvITs, which are considered riskier assets.
- Please refer to the mutual fund scheme’s SID/KIM/prospectus for complete risk factors.
How is the performance of your existing retirement funds?
Existing retirement funds have returned between 5% and 24% over the past five years. The performance regarding the scheme is as follows:
| scheme name | 3 years | 5 years | 10 years |
|---|---|---|---|
| ICICI Prudential Retirement Fund – Pure Equity Plan | 33% | twenty four% | – |
| HDFC Retirement Savings Fund – Equity Plan | 28% | twenty three% | – |
| ICICI Prudential Retirement Fund – Hybrid Aggressive Plan | twenty three% | 19% | – |
| HDFC Retirement Savings Fund – Hybrid Equity Plan | 19% | 17% | – |
| Tata Retirement Savings Fund – Direct Plan – Progressive Plan | 18% | 16% | 18% |
| Tata Retirement Savings Fund – Direct Plan – Intermediate Plan | 17% | 15% | 17% |
| Japan India Retirement Fund – Wealth Creation Scheme | twenty three% | 15% | – |
| Aditya Birla Sun Life Retirement Fund – 30s Plan | 15% | 13% | – |
| Aditya Birla Sun Life Retirement Fund – 40s Plan | 13% | 12% | – |
| UTI Retirement Benefit Pension Fund – Direct Plan | 14% | 11% | 11% |
| UTI Retirement Fund | 14% | 11% | 11% |
| ICICI Prudential Retirement Fund – Hybrid Conservative Plan | Ten% | Ten% | – |
| Franklin India Pension Plan | Ten% | Ten% | 11% |
| HDFC Retirement Savings Fund – Hybrid Debt Plan | Ten% | Ten% | – |
| Tata Retirement Savings Fund – Direct Plan – Conservative Plan | 8% | 9% | Ten% |
| Japan India Retirement Fund – Income Generation Scheme | 8% | 9% | – |
| ICICI Prudential Retirement Fund – Pure Debt Plan | 6% | 8% | – |
| Aditya Birla Sun Life Retirement Fund – 50s Plan | 7% | 7% | – |
| Aditya Birla Sun Life Retirement Fund – 50s Plus – Debt Plan | Five% | Five% | – |
| Axis Retirement Savings Fund – Aggressive Planning | 13% | – | – |
| Axis Retirement Savings Fund – Conservative Plan | Ten% | – | – |
| Axis Retirement Savings Fund – Dynamic Plan | 15% | – | – |
| SBI Retirement Fund – Aggressive Hybrid Plan | 20% | – | – |
| SBI Retirement Fund – Aggressive Plan | twenty three% | – | – |
| SBI Retirement Benefit Fund – Conservative Hybrid Plan | 12% | – | – |
| SBI Retirement Benefit Fund Conservative Plan | 9% | – | – |
Baroda BNP Paribas Retirement Fund NFO – Should I invest?
This retirement benefit has a fixed period of five years or your retirement age, whichever is earlier. There is nothing great about such schemes except that they have a lock-in period during which investors cannot redeem their funds and this leads to compounding of growth.
However, the lock-in period is the biggest negative factor in such schemes. Money cannot be withdrawn in case of emergency. Instead of investing in these retirement funds, investors can invest in aggressive hybrid or balanced advantage funds that are liquid and provide higher returns if invested for five years or more. As you can see, aggressive hybrid funds invest in similar mutual funds and have returned between 12% and 26% annually over the past five years. Similarly, Balanced Advantage funds have generated annualized returns of 10% to 19% over the past five years. I think these are an alternative option to retirement benefits.
Suresh KP is the founder of Myinvestmentideas. He is a NISM Certified Investment Advisor and he is a NISM Certified Research Analyst. He has been analyzing financial markets for the past 20 years. He can be contacted at suresh@myinvestmentideas.com.
