LIC, HDFC Pension Funds deliver the highest returns on g-sec schemes
All pension fund managers beat mutual fund peers and benchmark over three years
November 26, 2021 / 11:07 AM IST
National Pension System (NPS) allows subscribers to choose between active and auto choices. Under active choice, you can decide the asset allocation between equity, corporate debt and government securities. Under auto choice, you leave the decision to the rules and the pension fund manager. The asset allocation in this case is decided on the basis your age and pre-decided grid put in place by the NPS regulations.
Under auto choice, the allocation towards government securities asset class increases as you grow older. After the age of 55, it ranges from 75-90 percent, depending on the lifecycle fund you have chosen. The objective is to safeguard your hard-earned corpus built over the long-term against market volatility. NPS schemes G – or G-sec funds – have consistently turned in good performance over the last one year in particular.
As on November 17, 2021, all seven pension fund managers delivered returns between 10.52 percent and 11.71 percent over three years. LIC Pension Fund, a consistent performer in this category, topped the list with 11.71 percent, followed by HDFC Pension Fund with 11.21 percent. UTI Retirement Solutions brought up the rear with 10.52 percent – and even this was higher compared to the benchmark returns. All pension fund managers beat their gilt mutual fund peers (8.91 percent) as also the benchmark CCIL All Sovereign Bond TRI (10.51 percent).
Even over a five-year period, NPS Schemes G outperformed gilt mutual funds by a distance. Six out of seven pension fund managers outscored the benchmark as well. Both LIC Pension Fund (8.67 percent) and HDFC Pension Fund (7.7 percent) yielded the best returns in the five-year category as well. UTI Retirement Solutions was the laggard with 7.16 percent. It was the only pension fund manager to fall just short of benchmark returns of 7.26 percent.