These funds can invest up to 15% in equities but most have only 8-10% allocated to stocks. Playing safe has also helped NPS funds for government employees. On the other hand, ultra-safe investors who stayed away from stocks or conservative investors who put only 20% in equity funds have earned good returns, not only in the short-term but also in the long-term (see tables).
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The average return in the past one year is 2.95%.
![best investment returns 2017 index funds best investment returns 2017 index funds](https://occaminvesting.co.uk/wp-content/uploads/2020/07/Vanguard-equity-fund-performance-comparison.png)
While bond prices have risen smartly, the 50% allocated to equities has dragged down returns. The Nifty, which was till recently mirrored by equity funds of the NPS, has declined nearly 4% since. The past 9-12 months have not been very kind to aggressive investors. Lastly, the ultra-safe investor would not invest in equities, put 40% in corporate bond fund and the balance 60% in the gilt fund. A conservative investor would follow the allocation of MIP funds, putting only 20% in stocks, 30% in corporate bonds and 50% in gilts. A balanced allocation would put 33.3% in each of the three classes of funds. We have, therefore, looked at blended returns of four different combinations of the equity, corporate debt and gilt funds.Ĭhandnani, for instance, is an aggressive investor, with the maximum 50% of his corpus in the equity fund, 30% in the corporate bond fund and 20% in the gilt fund.
![best investment returns 2017 index funds best investment returns 2017 index funds](https://kti.fi/wp-content/uploads/post/KI2017_tiedote_kuva2_EN.png)
For instance, one can put a maximum 50% in equity funds so the overall returns for the investor should take into account the performance of the balance 50%. It is not enough to go by the performance of individual schemes because an investor puts money in a combination of funds. It examines the performance of Tier I funds of the NPS and identifies the best pension funds. This week’s cover story is aimed at investors like Chandnani and others who plan to invest in the NPS. “I also came to know that I can’t switch to another pension fund before a year,” he says.
![best investment returns 2017 index funds best investment returns 2017 index funds](http://4.bp.blogspot.com/-V7MazMAE3kA/Tcp2kJmMzOI/AAAAAAAAAns/ASXR7heNIRg/s1600/BlackRock+2010.jpg)
But when he was putting the second tranche of Rs 10,000 in another fund, Chandnani realised that NPS investors can’t opt for two pension fund managers. “The staff at the brokerage house had no idea which fund was doing well so I decided to diversify my investment across five pension funds,” says the Bengaluru-based marketing professional. When Avinash Chandnani invested in the National Pension System (NPS) last year, he had planned to put money in five different pension funds.
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