Looking For the Top Performing Hybrid Debt Oriented Funds for Retirement Planning? Here Are the Options

Looking For the Top Performing Hybrid Debt Oriented Funds for Retirement Planning? Here Are the Options

Feb 16, 2018

Most of us are so engrossed in our present that we remain oblivious of the future. Now, this future doesn’t just mean getting married and having kids, this also means retirement. While getting married and having kids are plans that you are going to execute while still in service, your retirement is a more worrisome subject considering the fact that it is going to come at an age when you won’t probably be able to take up any active profession. And because with retirement, your steady source of income comes to a sudden stop, life becomes quite difficult.

If you don’t want post retirement miseries to plague you, it’s high time you made retirement plans. And the earlier you start the better it is.

For instance, if you turn 30 today and you embark on your saving mission today, then you will have around INR 75 lakh in your kitty by the time you retire, considering you save INR 5000 a month, at an annually compounded growth of 8 percent.

If however, you start saving from the age of 40, you will have only INR 30 lakh to take care of your post retirement needs. So, a delay of 10 years can have significant impact on the amount of corpus you make.

So, it’s not just retirement planning that’s important; planning early is also equally important.

If, however, you are not the imprudent kind, and do care to save for your post-retirement life, then here are some mutual fund plans that might be of interest to you.

Source: Swaraj Wealth Research

This table above enlists the 7 top performing hybrid debt oriented funds for retirement planning since inception. If we have a closer look at this table, we will see that although all of the plans have performed well, HDFC Retirement Savings Fund – Hybrid – Equity Plan – Regular Plan outperforms all the remaining schemes in the list with a since-launch return percentage of 30.92.

Tata Retirement Savings Fund Moderate -Regular Plan (Growth) clinches the second position with a return percentage of 19.71.

The third best performing plan is HDFC Retirement Savings Fund – Hybrid – Debt Plan – Regular Plan that has its return percentage pegged at 14.46.

Next to it is the Franklin India Pension Plan-Growth with 12.86% of return since its inception.

The remaining three plans viz. Tata Retirement Savings Fund Regular Plan-Conservative Plan (Growth); UTI – Retirement Benefit Pension Fund; and Reliance Retirement Fund- Income Generation Scheme-Growth Plan – Growth Option, secure the fifth, sixth and seventh position in the list with return percentages of 11.41, 10.07 and 8.25 respectively. If you have noticed, the plans are already in their order of performance in the above table.

In case, you are specifically interested in any one of these plans, the following info might help you.

HDFC Retirement Savings Fund – Hybrid – Equity Plan – Regular Plan -

The objective of this investment growth plan that was launched in February 25, 2016 is the generation of income that is regular. The investments are mostly made in government securities and money market instruments. The minimum investment amount for this scheme is INR 5000.

The table below shows that the since-launch return percentage of the scheme as compared to the average of other hybrid debt oriented funds for retirement is 30.92, which is pretty impressive considering the short duration for which it has been in the market.

Source: Swaraj Wealth Research

Tata Retirement Savings Fund Moderate - Regular Plan (Growth) -

The minimum investment amount for this open-ended growth scheme is INR 5000. It acts as a financial planning tool to offer financial security on a long-term basis depending on the investor’s financial goals. This scheme, launched in November 1, 2011, has recorded an impressive return percentage of 19.71 since its launch (look at the chart below). Since the market average is 15.38, the returns may be considered impressive.

Source: Swaraj Wealth Research

HDFC Retirement Savings Fund – Hybrid – Debt Plan – Regular Plan -

You can invest in this fund with a minimum amount of INR 5000. HDFC Retirement Savings Fund – Hybrid – Debt Plan – Regular Plan is an open-ended growth fund that came into existence in February 25, 2016. The objective of this fund is to generate a steady flow of income through investments in debt funds or money market instruments and government securities maturing on or before the date slated for the maturity of the fund. Since, it’s a relatively new scheme, its return percentages for the 3rd, 5th and 10th years are not available, but it’s since-launch returns are evident enough of its great performance. It is pegged at 14.46% as against 15.38% market average. Although, the value is on the lower side, it’s still comparable.

Source: Swaraj Wealth Research

Franklin India Pension Plan - Growth -

If you want to invest in this scheme, you can start as low as INR 500. So, it’s best suited to people from the lower income group. Franklin India Pension Plan-Growth was launched in March 31, 1997. Since it is pretty old as compared to the others in the list, there is a trust factor associated with the scheme. It’s an open ended scheme best for the purpose of tax saving. Its dividend plan can offer investors a source of regular income; whereas its growth plan offers capital appreciation opportunity.

Below, you find the scheme performance table for this plan, a look at which will tell you that it has performed quite consistently over the years. It’s overall return ever since its inception is at 12.86% which is around 2.52% lower than the average market value i.e. 15.38%.

Source: Swaraj Wealth Research

Tata Retirement Savings Fund Regular Plan - Conservative Plan (Growth) -

INR 5000 is the minimum amount with which you can start investing in this fund. It’s an open-ended growth fund that came into being in November 1, 2011. The main aim of this fund is to act as a financial planning tool for investors, which would offer them long-term financial security. And the investments are made according to the kind of financial goals investors have.

The scheme performance chart for this fund that you see below illustrates how it showed a consistent performance over the years. While it recorded a return percentage of 12.86 in the first year of its inception, the value dipped to 11.64 in the third year. With a slight hike in the fifth year, the plan offered a satisfactory return of 11.41 % since its launch. Although the value is lower than the market average i.e. 15.38, it’s not alarmingly low.

Source: Swaraj Wealth Research

UTI – Retirement Benefit Pension Fund -

This scheme, which started in the year 1994 on the 26th of December, has a minimum investment value of INR 500. So, it’s perfect for people who can’t save a lot of money for retirement every month. The aim of this scheme is to provide periodical cash-flow to investors to the extent of their holding’s redemption value, after they turn 58. The fund achieves this objective by investing around sixty percent of the funds in fixed income securities such as debt and money market instruments having low to medium risks, and non-convertible debentures. Only forty percent of the total, remains invested in equities and equity related instruments such as convertible preference shares, partly or fully convertible debentures etc.

The table below reflects the fund’s performance since its inception. While the fund offered an impressive 12.64% return in the first year of its launch, it dipped to 10.64% in the third year. Its fifth year’s performance was better than the third year’s but failed to match up to the first year’s returns, although by a small margin. The tenth year’s performance was the lowest and is pegged at 9.53%. So, the overall return since inception remains at 10.07, which is good in itself but certainly not as good as the average market return.

Source: Swaraj Wealth Research

Reliance Retirement Fund - Income Generation Scheme - Growth Plan – Growth Option -

This hybrid debt oriented fund came into existence in the year 2015 on the 11th of February. With a minimum investment allowance of INR 5000, it can really help you build a good corpus by the time you retire. Effectively, it’s an open ended growth fund with the objective to offer capital appreciation opportunity to its investors. In addition, it offers a consistent flow of income in sync with the financial goals of its investors. The investments are made in a mix of securities consisting of fixed income funds, and equity and equity linked securities.

Given below is the scheme performance chart for the fund. Since the fund is comparatively new, we don’t have return values for the third, fifth and tenth years of the inception of the fund. The value for the first year is 8.69% which makes the total return figure since inception to be at 8.25%. This figure is certainly not impressive considering the market average of 15.38. But because it’s a new scheme, the value doesn’t reflect the true potential of the fund.

Source: Swaraj Wealth Research

If you haven’t started saving for your post-retirement life, it’s high time you did. Living a happy and independent post retirement life is important to keep your dignity intact. For desirable results, you can choose any of these top-performing Hybrid Debt Oriented Funds.

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