Your NPS can now invest in gold, silver, REITs, IPOs: Here's why it matters

Under the revised guidelines, pension funds must invest contributions prudently across several regulated asset categories.

If you invest in the National Pension System (NPS), your retirement portfolio is about to look very different—and potentially much stronger. New rules now allow NPS equity funds to invest in gold and silver ETFs, REITs, equity AIFs, and even participate in IPOs. This is the biggest expansion of investment choices in years, and it could meaningfully improve how your pension money grows over time.

 

These updates were disclosed in a master circular on investment guidelines for Unified Pension Scheme/National Pension System/Atal Pension Yojana schemes pertaining to central/ state government (default), corporate CG, NPS Lite, Atal Pension Yojana and APY Fund Scheme options.

 

The master circular, which supersedes many previous investment circulars, sets investment exposure limits for NPS, UPS and APY in equity, debt, short-term instruments, exchange-traded funds (ETFs), including gold and silver, and other schemes.

 

According to the PFRDA circular issued on December 10, 2025, “This Master Circular is being issued in exercise of powers of the Authority conferred under sub-clause (b) of sub-section (2) of Section 14 read with Section 23 of the PFRDA Act, 2013 and sub-regulation (1) of Regulation 14 of PFRDA (Pension Fund) Regulations, 2015 as amended from time to time. This master circular supersedes the earlier circular dated 28.03.2025 and all the circulars/ letters mentioned in the Appendix. This master circular shall be effective immediately.”

 

Why this is a big deal for your future money

 

Until now, NPS equity funds could mostly invest in listed stocks. 

 

With the rule change, up to 5% of your NPS equity portfolio can now go into:

 

• Gold & silver ETFs (great for inflation protection)
• REITs (real-estate exposure without buying property)
• Equity AIFs (specialised equity strategies)
• IPOs listed in the Nifty 250 universe (access to promising new companies)
• At least 90% of the fund will still stay invested in the top 200 stocks of the Nifty 250, so the core equity exposure that drives long-term returns remains intact.

 

Value Research decodes these rules changes and its impact as follows:

 

"Equity-focused pension funds can now have up to 5 per cent combined exposure to real-estate investment trusts (REITs), equity-oriented category I and II alternative investment funds (AIFs), and gold and silver ETFs. This is meant to introduce controlled diversification without shifting focus away from core equity holdings," said Value Research in a note.

 

Funds can take part in IPOs, FPOs and offer-for-sale, but only in relatively large companies. "Any new listing must have a free-float market value at least equal to the 250th company in the Nifty 250 index. If a stock later falls below this threshold, it must be reviewed for exit within a year," noted Value Research.

 

At least 90 per cent of the fund assets must be invested in the top 200 stocks of Nifty 250, with flexibility to include BSE 250 constituents not present in Nifty 250. This is to ensure portfolios remain anchored to large and liquid companies.

 

Funds may invest up to 5 per cent in index mutual funds and ETFs that track major indices like the Nifty 50 and Sensex. This offers a low-cost way to supplement direct stock exposure.

 

Funds can also invest in derivatives, but strictly for risk protection and hedging purposes. Their exposure cannot exceed 5 per cent of the portfolio.

 

Corporate debt funds can now invest in bank issuances, long-term bank deposits, rupee bonds from multilateral agencies and suitable debt mutual funds.The list now covers municipal bonds, debt issued by InvITs (infrastructure investment trust) and REITs, mortgage-backed securities and select debt-oriented AIFs. Banks’ additional Tier-1 bonds will also be permitted, giving room for more diversified fixed-income exposure.

 

What this means for you:

Your NPS money can now handle market ups and downs better.

 

Gold and silver ETFs tend to rise when markets fall.

 

REITs provide rental-like income and behave differently from stocks.

 

Exposure to IPOs helps your portfolio capture fresh growth stories.

 

AIFs allow your pension money to access strategies normally unavailable to retail investors.

 

Put together, these give your retirement corpus a better balance of growth + stability—a combination many investors struggle to build on their own.

 

Should you change anything right now?

 

Not necessarily.

 

If you are in your 20s, 30s or 40s, this change simply means that the money you invest every month can now grow across more asset classes automatically. You don’t have to pick gold or REITs separately—your fund manager can build that mix for you.

 

If you are closer to retirement, the additional diversification may help reduce volatility in the final decade of investing, when large market swings hurt the most.