Five-year lock-in facilitates long-term orientation in retirement funds

Investors unlikely to withdraw during market downturns or for other needs may do without them

Retirement funds are in the news as Bandhan Mutual Fund has unveiled its new fund offer. It has joined 26 other funds that collectively have assets under management (AUM) of Rs 21,289 crore. It is imperative for investors to check the suitability of these funds.
 

Retirement funds belong to the solution-oriented funds category. They have diversified portfolios containing both equity and debt. The equity exposure of these funds varies widely.

Five-year lock-in
 

A distinctive feature of these funds is that they come with a lock-in of at least five years or until the investor reaches retirement, whichever is earlier. “Data