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

Published: October 20, 2016 at 12:01 pm

Last Updated on

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.

Join our 1200+ Facebook Group on Portfolio Management! Want to know how to reduce fear, doubt and uncertainty while investing for financial goals? Sign up for our lectures on goal-based portfolio management and join our exclusive Facebook Community

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)

Do share if you found this useful
Join our 1200+ Facebook Group on Portfolio Management! Want to know how to reduce fear, doubt and uncertainty while investing for financial goals? Sign up for our lectures on goal-based portfolio management and join our exclusive Facebook Community

Hate ads but would like to support the site? Subscribe to our ad-free newsletter and get beautifully formatted full articles delivered to your inbox!

About the Author

Pattabiraman editor freefincalM. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman has co-authored two print-books, You can be rich too with goal-based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management. He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice.
He conducts free money management sessions for corporates and associations on the basis of money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association. For speaking engagements write to pattu [at] freefincal [dot] com

About freefincal & its content policy

Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on developments in mutual funds, stocks, investing, retirement and personal finance. We do so without conflict of interest and bias. We operate in a non-profit manner. All revenue is used only for expenses and for the future growth of the site. Follow us on Google News
Freefincal serves more than one million readers a year (2.5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication. Freefincal does not publish any kind of paid articles, promotions or PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)

Connect with us on social media

Our Publications


You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingThis 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 custom solutions for your lifestyle! 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 wantThis 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 young earner

Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new

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

Free Apps for your Android Phone

Comment Policy

Your thoughts are the driving force behind our work. We welcome criticism and differing opinions.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.

Leave a Reply

Your email address will not be published. Required fields are marked *