Investors in the National Pension Scheme (NPS) have reason to smile: the government-favoured, low-cost retirement scheme has turned out a tidy performance — across major asset classes, time periods and fund managers.
Healthy returns
In the equity category, NPS funds invest mostly in large-cap stocks. The seven Tier I funds that have been in existence for more than a year delivered 22-26 per cent returns last year. This is at par with or higher than returns from the Nifty 50 (21 per cent) and Nifty 100 (23 per cent).
In corporate debt, the 10.5-11.5 returns offered by NPS funds over the past year are better than the 10 per cent average returns of debt mutual fund (income) schemes. Similarly, the 10.5-13 per cent returns last year of NPS funds in government bonds are comparable with the average 12 per cent returns of mutual fund gilt schemes.
