3 Years Returns Of NPS Equity Schemes That Have Outperformed MFs

3 Years Returns Of NPS Equity Schemes That Have Underperformed MFs

In accordance with the previous resurgence in equity markets that witnessed historic highs for Sensex and Nifty, the fund managers of the National Pension System (NPS) have also strengthened their efficiency. Since October, the returns provided by the seven pension fund managers under scheme E (equity) have improved significantly. This is apparent from the yields for NPS Tier-I accounts generated over three and five-year periods (see table).

Pension Fund Managers 3 Year Returns in % 5 Year Returns in %
HDFC Pension Fund 8.05 12.08
Birla Sun Life Pension Scheme 7.54
ICICI Prudential Pension Fund 7.18 10.83
SBI Pension Fund 6.93 10.92
Kotak Pension Fund 6.82 11.16
UTI Retirement Solutions 6.54 11.02
LIC Pension Fund 4.90 8.33
Equity Large Cap 7.33 10.89
NIFTY 50 TRI 9.30 12.25

Only two of the seven funds, HDFC Pension Fund and Birla Sun Life Pension, continued to surpass their large-cap mutual fund peers, nevertheless. Over the last three years, they generated annualised returns of 8.05 percent and 7.54 percent respectively, compared to the average of 7.33 percent for the large-cap mutual fund category. They could not, indeed, smash their Nifty 50 TRI benchmark, which reported returns of 9.3 percent. In comparison, mutual funds and the benchmark Nifty underachieved all other pension funds, generating returns in the span of 4.9 percent to 7.18 percent. With returns of 4.9 per cent, the LIC Pension Fund was the lowest competitor in this category. Pension funds’ output was somewhat higher over the five-year period. The equity large-cap mutual fund category average (10.89 percent) surpassed four out of six pension funds that had completed at least six years of services. The HDFC Pension Fund was also the top competitor in this classification, with average returns of 12.08 percent over five years. It’s also the only pension fund in the span that was within hitting range of the Nifty 50 TRI (12.25 percent) benchmark. The other funds in the five-year return segment generated returns between 9.33 percent and 11.16 percent. After HDFC Pension Fund, Kotak Pension Fund (11.16%) and UTI Retirement Solutions (11.02%) were next on the list, with LIC Pension Fund taking up the back with 9.33% returns.


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