New Delhi: A report states that retirement mutual fund assets under management (AUM) have increased by 256 per cent in the past five years due to growing awareness of financial planning. An ICRA Analytics report stated that factors like increasing nuclear families, rising healthcare costs, and longer life expectancy are expected to contribute to continued growth in this sector. It was stated that the funds' Assets under Management (AUM) have increased by more than 256 pc over the past five years, climbing to Rs 29,903 crore in July 2024 from Rs 8395 crore in July 2019.
ICRA stated that the increased awareness resulted in a rise in folio numbers, growing by 17.44% in the past five years to 29.36 lakh in July 2024, compared to 25 lakh in July 2019. The total number of schemes has risen from 21 in 2019 to 29 in 2024.
A retirement mutual fund is specifically created to ensure a safe and comfortable life after retirement. These funds invest in a combination of stocks and bonds to achieve a mix of wealth growth and protection, providing a steady income in retirement with a usual lock-in period of five years or until retirement. The analysis discovered that the funds had average compound annualised returns of 26.21 per cent, 12.97 per cent, and 14.09 per cent over one, three, and five years.
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