Don't let past year's return guide you while deciding on asset allocation

Government and corporate bond schemes of NPS are unlikely to beat equity schemes over the long term

Government bond and corporate bond schemes of the National Pension System (NPS) have outperformed equity schemes over the past year. Experts say the new entrants should take a longer-term view, and not be unduly influenced by one-year returns, while deciding their asset allocation in NPS.

Interest rates have been coming down. The 10-year government bond yield has fallen from 6.51 per cent a year ago to 5.9 per cent now. When interest rates fall, prices of existing bonds rally. On the equity side, the market saw a massive tumble in March. It has rallied since and is now close to