SBI Retirement Benefit Fund NFO Review

SBI Retirement Benefit Fund NFO (4 Plans) – Should you invest?

SBI Retirement Benefit Fund NFO ReviewSBI Retirement Benefit Fund NFO – A Review


SBI Mutual Fund has launched Retirement Benefit Fund. SBI Retirement Benefit Fund NFO would open for subscription on 20th January, 2021. SBI MF has come up in 4 different investment plans in this fund category which would be Aggressive, Aggressive Hybrid, Conservative Hybrid and Conservations plans. Should you invest in SBI Retirement Benefit Fund NFO or avoid? Are there any hidden risk factors which an investor should know before investing in such retirement solution based mutual fund schemes?

Also Read: 15 Best Mutual Funds to invest in 2021

Investment Plans in SBI Retirement Benefit Fund

SBI MF offers 4 different plans in this retirement MF scheme.

1) SBI Retirement Benefit Fund – Aggressive Plan

2) SBI Retirement Benefit Fund – Aggressive Hybrid Plan

3) SBI Retirement Benefit Fund – Conservative Hybrid Plan

4) SBI Retirement Benefit Fund – Conservative Plan

SBI Retirement Benefit Fund NFO Issue Details

This is an open-ended mutual fund equity scheme. Here are the NFO issue details.

SBI Retirement Benefit Fund – NFO Issue Details
Scheme Opens 20-Jan-21
Scheme Closes 03-Feb-21
Scheme reopens for continous purchase/sale Within 5 days from closure
Minimum investment (Lumpsump) Rs 5,000
Minimum investment (SIP) Rs 1,000 for 6 months
NAV of the fund Rs 10 during NFO period
Entry Load Nil
Exit Load Nil
Risk Moderately to High Risk depending on plan
Max Total expense Ratio (TER) Upto 2.25%
Fund Manager Mr. Dinesh Ahuja (Debt)
Mr. Gaurav Mehta (Equity)
Mr. Mohit Jain (Overseas investments)

Download SBI Retirement Benefit Fund NFO SID (Aggressive plan link)

 

What is the investment objective and strategy of SBI Retirement Benefit Fund NFO?

The investment objective of the scheme is to provide a comprehensive retirement saving solution that serves the variable needs of the investors through long term diversified investments in the major asset classes.

However, there can be no assurance that the investment objective of the scheme will be achieved. The Scheme does not guarantee/ indicate any returns.

What is the allocation pattern in this mutual fund scheme?

This fund investment pattern is as follows:

Aggressive Plan
Type of instruments Min % Max % Risk Profile
Equity & Equity Related Instruments 80% 100% High
Debt and Money Market Instruments 0% 20% Low to Moderate
Units of REITs and InvITs 0% 10% Medium to High
Gold ETFs 0% 20% Medium to High
Aggressive Hybrid Plan
Type of instruments Min % Max % Risk Profile
Equity & Equity Related Instruments 65% 80% High
Debt and Money Market Instruments 0% 35% Low to Moderate
Units of REITs and InvITs 0% 10% Medium to High
Gold ETFs 0% 20% Medium to High
Conservative Hybrid Plan
Type of instruments Min % Max % Risk Profile
Equity & Equity Related Instruments 10% 40% High
Debt and Money Market Instruments 60% 90% Low to Moderate
Units of REITs and InvITs 0% 10% Medium to High
Gold ETFs 0% 20% Medium to High
Conservative  Plan
Type of instruments Min % Max % Risk Profile
Equity & Equity Related Instruments 0% 20% High
Debt and Money Market Instruments 80% 100% Low to Moderate
Units of REITs and InvITs 0% 10% Medium to High
Gold ETFs 0% 20% Medium to High

Can NRI invest in this MF scheme?

Yes, they can invest in this scheme. They can invest on repatriation or non repatriation basis.

Why should you invest in such Mutual Funds?

Here are a few reasons to invest in such schemes.

1) The SBI retirement benefit fund provides 4 plans to choose. Such plans can be chosen by high risk, moderate risk and low risk investors depending on their risk appetite and tenure of investment.

2) These funds would invest in equity, hybrid and debt instruments based on investment plans chosen. Investors have different choices to choose from. They can chose 1 fund or multiple funds too.

Some key risk factors you should consider before you invest in such funds

One should consider some of these risk factors / negative factors before investing.

1) These retirement benefit funds have lock-in period of 5 years. While it is good that the investment would get locked and such investment would grow, in case of emergency, one cannot withdraw the money.

2) SBI Retirement Benefit fund aggressive plan, invest up to 100% in equity which is high risk.

3) The conservative plan invests in debt instruments. These days, even debt instruments have become risky due to downgrade of credit rating of corporates or wherever MFs have invested in commercial papers of corporates, such companies are defaulting when due.

4) This fund invests in overseas investment options too, where there is forex conversion risk and geopolitical risks.

5) These funds would invest in derivatives, which are high risk.

6) Since it is a new mutual fund scheme, there is no past performance, hence we would not know, how the fund would perform in the future.

7) For complete risk factors, one can refer SID / KIM / Prospectus of the mutual fund schemes.

How is the Performance of Retirement Benefit Funds?

Currently there are existing retirement benefit funds. Here is the performance of these funds in the last 3 to 10 years tenure. The annualized returns ranging between -0.5% to 15.7%.

Equity Category
Fund Name 3 Year 5 Year 10 Year
Tata Retirement Savings Fund – Progressive Plan 7.0% 15.7%
Nippon India Retirement Fund – Wealth Creation Scheme -0.5% 8.3%
HDFC Retirement Savings Fund Equity Plan 6.0%
Hybrid category
Fund Name 3 Year 5 Year 10 Year
Tata Retirement Savings Fund – Moderate Plan 7.1% 14.3%
Tata Retirement Savings Fund – Conservative Plan 6.8% 9.7%
UTI Retirement Benefit Pension Fund 3.6% 8.4% 8.3%
Nippon India Retirement Fund – Income Generation Scheme 7.7% 8.4%
HDFC Retirement Savings Fund – Hybrid Equity Plan 7.8%
HDFC Retirement Savings Fund – Hybrid Debt Plan 6.1%

Also Read: Best Balanced Mutual Funds to invest in 2021

Should you invest in SBI Retirement Benefit Fund NFO?

SBI MF Retirement Benefit Fund comes with 4 different plans. High risk, moderate risk and low risk investors can choose the plan depending on their risk appetite and tenure of investment.  However, one should be aware of the lock-in period of 5 years. Investors cannot withdraw till 5 years even in case of emergency. If you want to lock your money for 5+ years, willing to take risks and also want to test with new mutual fund schemes, you can invest in these funds. Otherwise, you should stay away from such schemes.

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Suresh KP

12 thoughts on “SBI Retirement Benefit Fund NFO (4 Plans) – Should you invest?”

  1. Sir I am 43 Years old I am interested to invest Retirement solution schemes .This SBI MF is best ? If best what scheme to select
    Thanks

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