Saturday, November 17, 2012

Performance of NPS (National Pension Scheme)

National Pension Scheme has been around for a few years now, though it has not been hugely successful as the government would have liked. The government is trying to make few changes in the National Pension Scheme to make it more effective and popular among citizens.

We had written a post more than a year back on the performance of NPS. We wanted to continue tracking the performance of NPS for all fund managers so that it can give more visibility to investors and they can make the right decision.

As everyone must be aware (and if not read this post here!), there are 3 categories:
Scheme E - investments in predominantly equity market instruments
Scheme C - investments in fixed income instruments other than Government securities (like corporate bonds etc)
Scheme G - investments in Government securities

Here are the returns in terms of percentages of NPS for various fund managers:

Fund Manager
1 Year
2 Year
Since Inception
Sch. E
Sch. C
Sch. G
Sch. E
Sch. C
Sch. G
Sch. E
Sch. C
Sch. G
ICICI Pru Pension Fund
-3.4
13.5
10.1
-0.4
11.8
8.2
12.4
18.6
11.8
SBI Pension Fund
-3.8
10.4
13.1
-0.8
9
11.1
2.3
10.8
12.9
Reliance Capital Pension Fund
-5.1
10.7
11.4
-1.2
8.1
8.6
6.5
7
8.3
IDFC Pension Fund
-4.7
1.7
18.6
0.8
7.5
8.4
7.4
6.6
9.6
Kotak Mahindra Pension Fund
-2.5
10.5
13.5
0.1
8.3
10.8
5.6
7.9
12.3
UTI Retirement Solutions
-5.3
9.4
12.5
-1.29
7.6
10
7.4
7.5
9.3

As is obvious from the table above, Scheme E which invests in predominantly equity market instruments has given poor returns for 1 to 2 year perspective. Scheme G which invests in government securities has given best returns, the highest being 18.6% for 1 year from IDFC Pension Fund. Scheme C which invests in corporate bonds has given moderate returns, the highest being 13.5% for 1 year from ICICI Pru Pension Fund.

For all fund managers, the Scheme G which invests in government securities has given more than 10% return which is more than PF, PPF or any other post office fixed deposit schemes. This should be encouraging for investors. The government is also trying to make some changes to NPS so that it is sustainable for fund managers and becomes more effective over all.


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