PGIM India MF launches Retirement Fund with 5-year lock-in period: Should you invest?

However, it's essential to note that while the scheme endeavours to meet its investment objective, there is no guaranteed return, PGIM India Mutual Fund said.

The benchmark index for the PGIM India Retirement Fund is the S&P BSE 500 Index (TRI).

With a diversified portfolio expected to allocate a minimum of 25% towards large-cap, mid-cap, and small-cap segments, the fund aims to capture opportunities across different market segments.

The fund management approach combines both bottom-up and top-down strategies.

Fund managers will prioritise companies with stable or high growth potential, assessing factors such as management quality, financial condition, valuation metrics, and corporate governance practices, the fund house said.

Furthermore, the scheme may also explore investments in turn-around companies based on the fund manager's outlook, subject to regulatory limits for stock and sector weightages.

This flexibility in investment strategy allows for adaptation to evolving market conditions while maintaining a focus on long-term wealth creation.

In terms of investment eligibility, the PGIM India Retirement Fund requires a minimum subscription amount of ₹5,000, with subsequent investments in multiples of ₹1.

While the PGIM India Retirement Fund presents an opportunity for investors seeking a structured approach to retirement planning, it's crucial to conduct thorough due diligence and consult with financial advisors to determine suitability based on individual financial circumstances.

Retirement funds are specifically designed to help individuals save for their retirement years.

So, if the financial goal includes building a nest egg for retirement, investing in retirement funds can be a suitable option.

Retirement funds typically offer diversified investment portfolios, which may include a mix of equities, bonds, and other assets.

Diversification helps spread risk and may provide more stable returns over the long term.

Some retirement funds may come with lock-in periods, during which investors cannot withdraw their funds without penalties.

While this may limit liquidity, it also encourages long-term investing and helps prevent investors from making impulsive decisions during market downturns.

Like any investment, retirement funds carry inherent risks, including market risk, interest rate risk, and credit risk.

Investors should assess their risk tolerance and understand the risks associated with different types of retirement funds before investing.