NPS Tier 1 Corporate Scheme (C) Performance – Oct 2016

NPS Tier 1 and Tier 2 plans have a corporate scheme (C) which has a mandate to invest in bonds issued by public sector undertakings (PSUs), public financial institutions (PFIs), infrastructure bonds, private corporate bonds and bank deposits.

This is like a short-term diversified debt fund with about 50% of a banking and PSU fund and 50% of a corporate bond fund. However, the credit quality is typically much higher.

Portfolio of SBI Tier 1 C-scheme

Portfolio of ICICI Tier C-scheme

In this post, I compare the performance of ICICI Tier 1 Scheme C with S&P BSE Corporate Bond Index. I cannot claim that it is an apple-to-apple comparison but it is close enough in terms of the average maturity  and modified duration(~ 3-5 years)

Three-year rolling returns

nps_icici-t1-corporate-3y

Pretty volatile in this period with a strong spike after the bond crash in July 2013.

Five-year rolling returns

nps_icici-t1-corporate-5y

Above 10% return over 5 years is pretty decent!

ICICI Tier I Scheme C vs UTI Tier 1 Scheme C

nps-icici-t1-c-vs-uti-t1-c

The ICICI fund has edged out the UTI fund. Will soon get data for all pension fund managers.

Since the investment duration in NPS is typically long term, subscribers can consider an asset allocation of 50% C and 50% G schemes. As seen before, NPS Tier 1 Equity Scheme (E) Performance is nothing to shout about. So one can avoid equity exposure in NPS and get it via stocks or mutual funds.

Read more:  A Guide to investing in the National Pension System (NPS)

Want to conduct a sales-free "basics of money management" session in your office?
I conduct free seminars to employees or societies. Only the very basics and getting-started steps are discussed (no scary math):For example: How to define financial goals, how to save tax with a clear goal in mind; How to use a credit card for maximum benefit; When to buy a house; How to start investing; where to invest; how to invest for and after retirement etc. depending on the audience. If you are interested, you can contact me: freefincal [at] Gmail [dot] com. I can do the talk via conferencing software, so there is no cost for your company. If you want me to travel, you need to cover my airfare (I live in Chennai)

Connect with us on social media


Do check out my books


You Can Be Rich Too with Goal-Based InvestingYou can be rich too with goal based investing

My first book is meant to help you ask the right questions, seek the right answers and since it comes with nine online calculators, you can also create customg solutions for your lifestye!Get it now.  It is also available in Kindle format.

Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want

Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you want My second book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a youngearner

The ultimate guide to travel by Pranav Surya

Travel-Training-Kit-Cover This is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step.  Get the pdf for ₹199 (instant download)

Create a "from start to finish" financial plan with this free robo advisory software template


Free Apps for your Android Phone

All calculators from our book, “You can be Rich Too” are now available on Google Play!
Install Financial Freedom App! (Google Play Store)
Install Freefincal Retirement Planner App! (Google Play Store)
Find out if you have enough to say "FU" to your employer (Google Play Store)

About Freefincal

Freefincal has open-source, comprehensive Excel spreadsheets, tools, analysis and unbiased, conflict of interest-free commentary on different aspects of personal finance and investing. If you find the content useful, please consider supporting us by (1) sharing our articles and (2) disabling ad-blockers for our site if you are using one. We do not accept sponsored posts, links or guest posts request from content writers and agencies.

Blog Comment Policy

Your thoughts are vital to the health of this blog and are the driving force behind the analysis and calculators that you see here. We welcome criticism and differing opinions. I will do my very best to respond to all comments asap. Please do not include hyperlinks or email ids in the comment body. Such comments will be moderated and I reserve the right to delete the entire comment or remove the links before approving them.