Retirement investing is not about chasing momentum, it’s about holding on through dull phases and volatile cycles. That’s what the best-performing retirement funds have quietly done over the past decade. These schemes are built for consistency. They combine equity growth with a dash of stability from debt, keeping portfolios balanced even when markets turn unpredictable.
While the past year has seen uneven returns across categories, long-term numbers tell a different story. Over the last ten years, a handful of retirement-focused mutual funds have compounded between 13% and 15% annually, outpacing both their benchmarks and category averages. Designed to help investors build a retirement corpus through disciplined investing, these funds have proved that patience pays.
What are retirement mutual funds?
Retirement mutual funds fall under SEBI’s solution-oriented category. Their purpose is singular i.e., to build a corpus for post-retirement years. These schemes typically carry a mandatory lock-in until the age of 60, encouraging investors to stay invested for the long haul.
They invest across equity, debt, and money market instruments in varying proportions depending on the fund’s risk profile. Some take an equity-heavy approach for long-term growth, while others blend debt to cushion volatility. The idea is to help investors accumulate wealth systematically over time rather than react to market movements.
Unlike flexi-cap or sectoral funds, retirement schemes are goal-tied. They are structured not for tactical gains but for compounding the slow, disciplined kind that builds over years.
How to assess retirement fund performance
These funds are meant to be judged over long horizons. One-year returns only show short-term volatility, but the 10-year CAGR indicates the true power of steady investing. Comparing this long-term growth with the benchmark CAGR helps evaluate how well a manager has navigated different market cycles.
Two other measures matter. The expense ratio, which shows how much investors pay for management, can make a meaningful difference over time. A lower ratio leaves more room for compounding. And the portfolio turnover ratio indicates how actively the fund is managed. Lower turnover signals a patient, buy-and-hold approach; higher turnover suggests tactical repositioning.
Based on data from the Financial Express Mutual Fund Screener, four schemes stood out for maintaining long-term consistency: Tata Retirement Savings Fund – Progressive Plan, Tata Retirement Savings Fund – Moderate Plan, Nippon India Retirement Fund – Wealth Creation Scheme, and UTI Retirement Fund – Direct Plan – Growth.
#1 Tata Retirement Savings Fund – Progressive Plan
Launched in January 2013 by Tata Mutual Fund, the Progressive Plan is the most aggressive of the Tata Retirement series. It carries a Very High Risk tag and manages Rs 2,048 crore in assets with an expense ratio of 0.54%, lower than the category average of 0.96%.
The fund maintains about 95.5% exposure to equities, with allocations of roughly 24.7% to large caps, 16.8% to mid caps, and 24.1% to small caps. It avoids debt almost entirely, keeping the portfolio tilted toward growth.
Over the past year, it delivered a return of 2.97%, but its 10-year CAGR stands at 14.99%, ahead of the category average of 11.19%. Against its benchmark, the Nifty 500 TRI, which compounded around 13.5%, the fund has managed to stay competitive over the decade.
A portfolio turnover ratio of 35.6% indicates moderate activity; the fund manager adjusts positions but largely maintains a long-term stance. This balance between aggression and control has helped the scheme stay resilient through multiple market cycles.
#2 Tata Retirement Savings Fund – Moderate Plan
The Moderate Plan, also from Tata Mutual Fund, offers a more balanced mix between equity and debt. It manages Rs 2,117 crore, with an expense ratio of 0.61% and a turnover ratio of 34.7%, lower than the peer average. The fund is categorised as very high risk.
The fund invests 82.6% in equities, of which 20.9% are large caps, 14.5% mid caps, and 21.6% small caps. It also allocates 14.5% to debt instruments, including government securities, to temper volatility.
In the past year, the fund returned 4.74%, while its 10-year CAGR is 13.94%, just above its benchmark, the CRISIL Hybrid 25+75 – Aggressive Index, which compounded at 13.36% in the decade.
The scheme’s steady allocation across asset classes makes it suitable for investors seeking growth but with a smoother ride. It’s neither as aggressive as a pure equity fund nor as cautious as a conservative hybrid; it sits firmly in the middle, where long-term investors often find comfort.
#3 Nippon India Retirement Fund – Wealth Creation Scheme
Nippon India’s Wealth Creation Scheme, launched in 2015, is a pure equity-oriented retirement plan with a Very High Risk tag. It manages Rs 3,179 crore in assets and charges an expense ratio of 0.98%.
The fund invests 99.5% in domestic equities, with 53.6% in large caps, 13.6% in mid caps, and about 5% in small caps. The rest is held in cash and other assets. Its portfolio turnover ratio is 40%, showing a relatively patient approach compared to the category’s 48% average.
Over the past one year, the scheme returned 4.01%, while its 10-year CAGR is 12.60%. This compares with 11.3% CAGR for the BSE 500 TRI, its benchmark. Over shorter periods, the fund has often outpaced peers due to its large-cap bias, though it can lag slightly when small and mid-caps rally.
Despite its narrow focus, the fund has demonstrated long-term consistency indicating a disciplined style that aligns well with retirement investing goals.
#4 UTI Retirement Fund – Direct Plan – Growth
The UTI Retirement Fund, one of the more conservative retirement schemes, manages Rs 4,659 crore with an expense ratio of 1.09% slightly above the category average. It is tagged High Risk, not Very High, due to its higher debt allocation.
The fund’s portfolio turnover ratio stands at 61.4%, indicating more active rebalancing compared to peers. It invests primarily in equity and debt in roughly a 60:40 hybrid structure, consistent with its benchmark, the CRISIL Short Term Debt Hybrid 60+40 Index. This index was added as benchmark in 2018 and there is no data on its 10 years CAGR.
In the past year, it returned 5.55%, and over 10 years, it has grown at a CAGR of 10.21%.The fund’s equity allocation is tilted toward large caps, while its debt component provides stability, making it a suitable option for conservative savers nearing retirement.
Should you go for retirement plans, flexi-cap, or target-date funds?
Each of these options serves a different purpose. Flexi-cap funds are designed for active wealth creation. They give fund managers the freedom to move across large, mid, and small caps depending on market conditions, ideal for investors who want flexibility and can handle volatility.
Retirement funds, by contrast, are built around a goal. They come with a long-term lock-in and a steady asset mix that discourages frequent switching. They are meant for those who value discipline over dynamism, investors who want their corpus to grow methodically without worrying about timing entries and exits.
Target-date funds, though still rare in India, offer an automatic glide path. They start equity-heavy and gradually shift toward debt as the target year approaches. For investors seeking simplicity and lifecycle-based allocation, they can be an elegant solution.
In practice, younger investors might combine a flexi-cap fund for compounding with a retirement plan for stability. As retirement nears, transitioning toward target-date or hybrid retirement schemes helps reduce risk naturally.
The investor’s takeaway
Retirement funds are not flashy performers; they’re built to endure. The top schemes from Tata, Nippon India, and UTI have shown that slow, steady compounding can still outpace the benchmarks when managed with discipline.
Their expense ratios remain moderate, their turnover restrained, and their performance across a decade steady enough to build confidence. For anyone looking to build a retirement corpus through SIPs or lump-sum investing, these funds remain among the more reliable long-term options available today.
Disclaimer: The above content is for informational purposes only. Mutual Fund investments are subject to market risks. Please consult your financial advisor before investing.