5 Best Mutual Funds to Invest for Retirement Planning

A good retirement plan is indeed necessary for a stress-free and financially independent old age. However, very few people start planning for their retirement at an early age. Ideally, one should start planning for their retirement right from their 20s to have sufficient corpus after retirement.

Why Choose the Best Mutual Funds for Retirement Planning?

Mutual funds are a very smart tool one can use when planning for various financial requirements such as child’s education, big purchases, world tour, etc. These instruments are signed to serve various purposes as per the investors’ requirements. Investors can choose from a wide pool of equity, debt, and hybrid funds. Recently the Security and Exchange Board of India launched a new category known as ‘Solution Oriented Schemes’ which majorly includes schemes for child’s education and retirement. This separate category has been introduced to make retirement planning more convenient for investors. These schemes either come with a fixed tenure of five years or till retirement. Investors who are interested in exploring some of the best mutual funds for their retirement can refer to Scripbox for some great financial advice in this regard.

Best Mutual Funds to Invest for Retirement Planning

Here is a list of some of the best mutual funds available for retirement planning:

Fund NameAUM (in crores)1 Year Returns (in %)3 Year Returns (in %)5 Year Returns (in %)
Mirae Asset Emerging Bluechip FundRs. 8,839-
Axis Long Term Equity FundRs. 19,632-10.363.515.72
SBI Small Cap FundRs. 3,280-13.490.218.04
ICICI Prudential Balanced Advantage FundRs. 24,834-10.351.645.41
Kotak Standard Multicap FundRs. 26,049-19.09-1.685.31

Mirae Asset Emerging Bluechip Fund

  • Since its inception, this fund has delivered 17.70 (direct plan). This fund has invested 42.19% and 53.7% of its assets in mid-caps and large caps respectively, thus giving its fund manager leeway to shift between companies as per the market conditions
  • This fund has outperformed the benchmark over the past one, three, and five years
  • Investors who have a horizon of long term find Mirae Asset Emerging Bluechip Fund a good starting point into a well-managed fund

Axis Long Term Equity Fund

  • Axis Long Term Equity Fund is an Equity Linked Savings Scheme which has the potential to generate long term capital appreciation as it invests in companies with a sustainable business model
  • This fund has outperformed the benchmark fund over one, three, and five years
  • The portfolio consists of 36 stocks in its portfolio and the primary investments are in Finance, Services, Automobile, and Technological sector
  • The manager of this scheme has invested in large-cap firm thus pacifying the degree of risk involved in the scheme
  • Another feature of this fund is that it provides tax exemption up to INR 1.5 lakh. Individuals who can lock their funds for three years can choose this option

SBI Small Cap Fund

  • Along with a chance to invest in a diverse portfolio of equity stocks, the SBI Small Cap Fund also provides long term capital growth and liquidity of an open-ended scheme to its investors
  • Individuals who are ready to take the risk and believe in high returns from high risks can consider this fund as one of the best mutual funds for retirement planning
  • This fund has outperformed the returns by its benchmark by a huge number over the past one, three, and five years
  • This fund has a huge part of its investments in small-cal firms thus establishing an aggressive investment position. Fund managers have adopted a bottom-up approach while selecting the stocks from several small-cap companies
  • Some top sectors where the assets are allocated are engineering, FMCG, cons durables, and finance
  • It is advisable to keep the funds for at least 5 years to get good returns from this fund

ICICI Prudential Balanced Advantage Fund

  • Though a balanced fund is considered as an equity fund for tax purposes, derivatives are used to decrease the actual equity exposure under the 67.9% threshold that is required for an equity fund allowing investors to enjoy benefits of equity taxation
  • This fund has delivered annual returns of 5.41% over the past five years thus doubling the amount invested 5 years back
  • The managers of this fund have successfully reduced the effective exposure of equity thus cutting down on investor risk in an election year. Besides, they have also reduced the risk of increasing interest rates

Kotak Standard Multicap Fund

  • Earlier called Kotak Select Focus, this fund has been a veteran of the industry. It has outperformed the benchmark over five years and seven years by a magnificent margin
  • This is a megafund, with AUM of INR 26049. This is the best mutual fund for retirement with its long-established track record
  • Its fund manager has lately moved into large-cap funds to safeguard from election-related volatility. However, he can swerve in the alternate direction based on the market conditions

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