A suitable investment option, the National Pension System or NPS (Tier I) comes with strong merits like extra low expenses, additional tax benefits, and so on.
Although its long lock-in period is generally seen as a disadvantage, it is a blessing in disguise for investors who find it difficult to be disciplined with their retirement savings.
During this tax-saving season, we bring to you a comprehensive comparison of different NPS plans, shed light on the best ones and share how to build your NPS portfolio.
When it comes to investing in the NPS, an investor can opt for any of the seven pension fund managers [Aditya Birla Sun Life (ABSL), HDFC, ICICI Prudential, Kotak Mahindra, LIC, SBI, and UTI Retirement Solutions) and three plans offered by each (equity, corporate bond, and government bond). We have not considered alternative investments, which can at best get the allocation of 5 percent, in this study.
Best in the equity segment (Scheme E)
According to regulatory-investment guidelines, this scheme mainly sticks to the universe of large- and mid-cap stocks. In terms of their overall portfolio construct, all equity plans of NPS Tier I are conservatively managed, with about 95 percent of the money invested in large-cap stocks. Thus, the portfolio complexion of all these funds remains the same. However, when it comes to performance, one can easily pick the winner.
An evaluation based on rolling five-year returns reveals that the best and the worst plans generally differ by about 2-2.5 percent per annum. And it can make a big difference to your overall wealth in the long term.
Diese Geschichte stammt aus der March 2022-Ausgabe von Mutual Fund Insight.
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Diese Geschichte stammt aus der March 2022-Ausgabe von Mutual Fund Insight.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent? Anmelden
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