Types Of Investment Choices In NPS - Active Choice And Auto Choice

26 Jun 2023|

1 min read |

by ICICI Securities Team

The National Pension Scheme, or NPS, is a popular retirement investment option in India. It allows subscribers to select different asset classes and investment options. So, today let us understand the different NPS investment options in detail.

NPS asset classes

Before selecting the type of NPS investment choices, it is important for the subscribers to select the available asset classes. These classes define the maximum allocation percentage of the funds to the different fund managers. Given below are the top four NPS asset classes:

Asset Class - A

It includes instruments like InvITs, REITS, or MBS, and other alternative investment funds. It has a maximum allocation of 5%.

Asset Class - G

It includes government bonds and related instruments. It has a maximum allocation limit of 100%.

Asset Class - C

It includes corporate debt and other related instruments. It has a maximum allocation limit of 100%.

Asset Class-E

It includes equity and other related instruments with a maximum allocation of 75%.

Pension Fund Managers or PFM in NPS

After selecting the asset class, the next step for the NPS subscribers is to select the PFM in NPS. These Pension Fund Managers invest the collected funds into asset classes based on the investment objective and guidelines. Further, PFMs conduct periodic reviews to check the performance of the underlying assets.

ICICI Prudential Pension Fund Management Co. Ltd
Aditya Birla Sun Life Pension Management Ltd
HDFC Pension Management Co. Ltd
UTI Retirement Solutions Ltd
LIC Pension Fund Ltd
SBI Pension Funds Pvt. Ltd
Kotak Mahindra Pension Fund Ltd
Axis Pension Fund Management Ltd
Max Life Pension Fund Management Ltd
Tata Pension Management Ltd

Takeaway

The active choice is the individual fund, while the auto choice is the lifecycle fund. NPS subscribers can go through all details and the four asset classes, i.e., Asset Class-E, Asset Class-C, Asset Class-G, and Asset Class-A.

Disclaimer

ICICI Securities Limited has its registered office at ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025, India, Tel No:- 022 - 2288 2460, 022 - 2288 2470. The non-broking products / services like iLearn and Financial Learning are not exchange traded products / services and ICICI Securities Ltd. is just acting as a distributor/ referral Agent of such products / services and all disputes with respect to the distribution activity would not have access to Exchange investor redressal or Arbitration mechanism. iLearn is not an exchange traded product/service of ICICI Securities Ltd. All disputes with respect to the activity on the platform would not have access to Exchange investor redressal or Arbitration mechanism.

ICICI Securities Ltd. is a Member of National Stock Exchange of India Ltd (Member Code :07730), BSE Ltd (Member Code :103) and Member of Multi Commodity Exchange of India Ltd. (Member Code: 56250) and having SEBI registration no. INZ000183631. ICICI Securities Ltd. is a SEBI registered with SEBI as a Research Analyst vide registration no. INH000000990. Name of the Compliance officer (broking): Mr. Atul Agrawal, Contact number: 022-40701022, E-mail address: complianceofficer@icicisecurities.com Investments in securities markets are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. ICICI Securities Ltd. and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Such representations are not indicative of future results. The securities quoted are exemplary and are not recommendatory. AMFI Regn. No.: ARN-0845. PFRDA registration numbers: POP no -05092018. ICICI Securities Ltd. acts as a Composite Corporate agent having registration number -CA0113. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. Please note, Mutual Fund, Corporate Fixed Deposits, Bonds, Alternate investment funds, Tax planning, Succession planning, NPS, IPO, Investment Advisory and Loans related services are not Exchange traded products and ICICI Securities Ltd. is acting as a distributor to solicit these products. Please note, Insurance related services are not Exchange traded products and ICICI Securities Ltd. is acting as a corporate agent to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The non-broking products / services like Research, etc. are not exchange traded products / services and all disputes with respect to such activities would not have access to Exchange investor redressal or Arbitration mechanism. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investors should consult their financial advisers whether the product is suitable for them before taking any decision. The contents herein mentioned are solely for informational and educational purpose.