As the stock market hits fresh highs, Scheme E (equity scheme) under National Pension Scheme (NPS) soars. Scheme E Tier I Account of NPS has given an average one year return of 13.20% in 2020. HDFC Pension Management has been the top performer with 14.87% returns in Scheme E Tier I. Debt schemes under NPS continue their wonderful performance as shown earlier during the year. Scheme G of NPS which invests in government bonds and related securities, has topped the charts with double-digit returns throughout the year.
Scheme G Tier I has given 14.72% average one-year return, with HDFC Pension as the topper with 15.60% returns. Government bond scheme of NPS Tier I holds assets worth ₹14,421 crore.
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Scheme E holds an AUM of ₹15,996 crore.
Another debt scheme, Scheme C, which invests in corporate bonds and related securities has also delivered double-digit returns to NPS investors in the last one year.
The current year’s performance is pushing returns for the longer term horizon as well. Recent data shows double digit returns for five- and seven-year periods under Scheme E and Scheme G.
Here’s how NPS Tier I schemes performed:
Don’t get swayed
Your fundamental reason to invest in NPS should not be governed by the recent returns. NPS is a long term investment instrument to save for your retirement.It is a market-linked product. The returns in NPS schemes will be volatile. The returns could be lower or even higher that those offered currently.
Focus on your goal and do not get carried away by the short term volatility. NPS offers various investment options- equity, corporate bond, government securities and alternative investment funds. It also allows to invest in a mix of asset class. While deciding to invest in NPS, apart from looking at the performance of various schemes, match your risk profile with the schemes on offer.