Bandhan Mutual Fund has unveiled the Bandhan Retirement Fund, a new offering designed to assist investors in achieving their retirement objectives by aiming for long-term capital appreciation through a combination of equity, debt, and other instruments. The fund’s dynamic asset allocation strategy is intended to provide investors with exposure to potential equity market gains while safeguarding against potential downturns during market declines.
The New Fund Offer for the Bandhan Retirement Fund is set to open on September 28, 2023, and will close on October 12, 2023. Investors can access the fund through licensed mutual fund distributors, online platforms, or directly via the Bandhan Mutual Fund website.
Vishal Kapoor, CEO of Bandhan AMC Limited (Bandhan AMC), highlighted the importance of planning for retirement, especially given factors like rising life expectancy, increasing living costs, and surging healthcare inflation. He explained that conservative investors often struggle to beat inflation, potentially leading to insufficient funds to cover post-retirement expenses. Mutual funds can offer a flexible retirement planning option, allowing investors to use systematic investment plans (SIPs) and lump-sum investments to benefit from relatively higher growth potential.
The Bandhan Retirement Fund will adopt a model-based approach for dynamic asset allocation between equity and debt, designed to participate in market upswings while providing a cushion against market downturns. The fund also offers a systematic withdrawal plan (SWP) option to meet investors’ cash flow needs post-retirement. To encourage long-term investment and take advantage of compounding benefits, the fund will have a lock-in period of five years.
The equity component of the retirement fund will focus on high-quality companies with strong long-term growth potential and reasonable valuations. It will maintain a minimum equity holding of 65% and use hedged equity allocation to ensure eligibility for equity taxation. The debt portfolio will be diversified across various quality instruments, including government securities (GSec), state development loans (SDL), corporate bonds, and money market instruments.
