Retirement Mutual Funds' AUM Grows 226% in 5 Years: Top Performing Schemes Revealed

India’s retirement mutual fund sector has experienced remarkable growth over the past 5 years, with Assets under Management (AUM) rising 226% from ₹9,800 crore in June 2020 to ₹31,973 crore in June 2025, driven by increasing investor trust and digital ease.

AUM Surge and Top Retirement Mutual Funds 

Retirement mutual funds, designed for long-term wealth creation, have witnessed stellar growth, both in AUM and investor participation. Total folios rose from 25.46 lakh in June 2020 to 30.09 lakh by June 2025. These funds typically feature a balanced investment approach, diversifying across equity for growth and debt for capital stability. With 29 schemes now available, investors are choosing from a broader range of options aimed at securing post-retirement income.

Top Retirement Mutual Funds by 5-Year Returns

ICICI Prudential Retirement Fund - Pure Equity Plan leads with a 5-year return of 30.32%, followed by HDFC Retirement Savings Fund - Equity Plan at 27.46%. Other notable performers include Nippon India Retirement Fund - Wealth Creation Scheme at 23.01% and ICICI Prudential Retirement Fund - Hybrid Aggressive Plan at 22.71%.

Read More: Investor Addition in Mutual Funds Slows to 5.2% in H1 2025 as Volatility Weighs!

Return Statistics and Growing Popularity

As of March 31, 2025, the average return across all retirement mutual funds stood at 6.79% for 1 year, 15.72% for 3 years, and 14.64% over 5 years. Digital tools like robo-advisors have contributed to the sector’s expansion by offering tailored portfolio suggestions, bringing in younger investors preparing early for retirement.

Retirement Planning and Long-Term Investment Discipline

With a mandatory lock-in period of 5 years or until retirement, these funds support disciplined investing. Rising inflation, increased life expectancy, and higher healthcare costs further highlight the importance of timely retirement planning. Reviewing fund performance periodically can keep investment plans aligned with financial goals.

Conclusion

The 226% increase in AUM underscores a shift in investor mindset toward structured retirement planning through mutual funds. Among the available 29 schemes, equity-oriented plans have led in returns, while hybrid options offer balanced risk and steady growth. Long-term commitment and periodic monitoring remain vital for successful retirement corpus accumulation.

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in securities are subject to market risks. Read all related documents carefully before investing.