With higher equity cap in NPS, young investors should increase exposure

In active choice, the investor decides how much allocation he would like to have to different asset classes

The Pension Fund Regulatory and Development Authority (PFRDA) chairman, Hemant Contractor, recently announced that the option to invest up to 75 per cent in equities under the active choice option of the National Pension Scheme (NPS) will become available to investors by the end of this month. 

In NPS, investors can spread their investments across four asset classes: C (corporate debt), G (government securities), A (alternate assets) and E (equities). NPS offers them two choices for deciding their allocation across these classes - auto and active choice. Under auto choice, investors can put their money in any of the three