Bandhan Mutual Fund on Thursday launched a new fund offer for its Bandhan Retirement Fund, aimed at providing long-term capital appreciation to help meet the investors’ retirement goals.

The fund will invest in a mix of equity, debt, and other assets based on a “dynamic allocation strategy” that provides investors with an opportunity to participate in the equity market when it is on the upside while “cushioning the potential downside” during a market fall.

The new fund offer (NFO) will run from September 28 to October 12, 2023. Interested customers can investment in the fund through the licensed mutual fund distributors, online platforms, or directly on https://bandhanmutual.com/nfo/bandhanretirement-fund/.

Highlighting the importance of retirement planning, Bandhan AMC CEO Vishal Kapoor said, “Higher life expectancy, rising cost of living, and soaring healthcare inflation could squeeze investor savings, making it pertinent to plan for retirement.”

Kapoor adds that “Investors with a conservative approach to building a retirement plan grapple to beat inflation, facing a shortage of funds to meet their expenses. While maintaining the same standard of living post-retirement is imperative, the lack of preparedness could derail the journey to create a sizeable retirement corpus.”

Highlighting why investors could consider investing in the Bandhan Retirement Fund, Viraj Kulkarni, fund manager of Bandhan AMC, added, “Bandhan Retirement Fund follows a model-based approach for dynamic allocation across equity and debt to participate in the market upside while cushioning the potential downside during a market fall. This quantitative model has a robust combination of valuation, fundamental, and technical parameters to make the allocation effective for investors. The fund also allows investors to choose the Systematic Withdrawal Plan (SWP) route to meet their cash flow needs post-retirement.”

Key Features Of The Fund

The fund’s five-year lock-in would encourage investors to remain invested for a long period and reap the compounding benefit. According to Bandhan AMC, the fund’s equity investment framework would “focus on quality companies with a long-term growth trajectory and justified valuations”.

It will maintain a minimum equity holding requirement of 65 per cent with investments “in hedged equity allocation to ensure that equity taxation eligibility is met”. It will also diversify its debt portfolio with instruments like government securities (G-Secs), state development loans (SDL), Corporate Bonds, and money market instruments.

Mutual funds are considered an effective vehicle for retirement planning, as they provide the flexibility to invest through the Systematic Investment Plan (SIP) and the lumpsum route, besides a higher growth potential. Thus, mutual funds offer diversification, tax efficiency, and a potential inflation- beating returns over the long term.