NPS equity schemes deliver scanty returns, debt makes up for the losses

The National Pension Scheme’s (NPS) tier-I equity schemes have delivered low-to-mid single-digit returns over the past year, and have underperformed their benchmarks. Kotak Pension Fund was the best performer in the equity category, with returns of 6.8 per cent for a one-year period, while LIC Pension Fund, with returns of 2.1 per cent, was the worst.

Active NPS managers follow a multi-cap strategy, with investments restricted to the top 150-200 stocks by market cap.

Five of the seven NPS schemes have underperformed the flagship multi-cap mutual fund (MF) schemes managed by their sister firms. The underperformance ranged from 1.3-6.9 per cent, if