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Investment Choices

Investment Choices

NPS offers two types of investment choices Active Choice and or (Auto Choice).

Under Active choice, subscriber can choose to invest in below mentioned asset classes upto the maximum(%) mentioned against.

Asset classes (Funds) under NPSMaximum exposure allowed in the asset classInvestments
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Under Auto Choice (in both Tier I and Tier II), funds are invested across Equity, Corporate bonds and Government securities, as per age of the subscriber. It is also called as Lifecycle Fund. It is further divided as per equity exposure: LC 25 – Low (5E/55Y), LC 50 – Moderate (10E/55Y), LC 75 – High (15E/55Y), and LC – Aggressive (35E/55Y).

In LC 25 – Low, LC 50 – Moderate, and LC 75 - High, maximum equity exposure is allowed till the subscriber is 35 years old. On subscriber’s 36th birthday, there is an auto alignment of asset allocation and funds are moved from equity to debt till the subscriber attains the age of 55 years. After 55, asset allocation under the respective lifecycle fund shall remain constant till subscriber exercises the option to change the investment pattern.

In LC – Aggressive, maximum equity exposure is allowed till the subscriber is 45 years old. On subscriber’s 46th birthday, there is an auto alignment of asset allocation and funds are moved from equity to debt till the subscriber attains the age of 55 years. After 55, asset allocation shall remain constant till subscriber exercises the option to change the investment pattern.

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    You can pick between four lifecycle options:

    • LC-25 Low
    • LC-50 Moderate
    • LC-75 High
    • LC - Aggressive

    Depending on your choice, your money will be invested in different classes as shown below:

    AgeLC-75 HighLC-50 ModerateLC-25 LowLC- Aggressive
    ECGECGECGECG
    <=35 years75%10%15%50%30%20%25%45%30%50%30%20%
    36 years71%11%18%48%29%23%24%43%33%50%30%20%
    37 years67%12%21%46%28%26%23%41%36%50%30%20%
    38 years63%13%24%44%27%29%22%39%39%50%30%20%
    39 years59%14%27%42%26%32%21%37%42%50%30%20%
    40 years55%15%30%40%25%35%20%35%45%50%30%20%
    41 years51%16%33%38%24%38%19%33%48%50%30%20%
    42 years47%17%36%36%23%41%18%31%51%50%30%20%
    43 years43%18%39%34%22%44%17%29%54%50%30%20%
    44 years39%19%42%32%21%47%16%27%57%50%30%20%
    45 years35%20%45%30%20%50%15%25%60%50%30%20%
    46 years32%20%48%28%19%53%14%23%63%48%28%24%
    47 years29%20%51%26%18%56%13%21%66%46%26%28%
    48 years26%20%54%24%17%59%12%19%69%44%24%32%
    49 years23%20%57%22%16%62%11%17%72%42%22%36%
    50 years20%20%60%20%15%65%10%15%75%40%20%40%
    51 years19%18%63%18%14%68%9%13%78%39%18%43%
    52 years18%16%66%16%13%71%8%11%81%38%16%46%
    53 years17%14%69%14%12%74%7%9%84%37%14%49%
    54 years16%12%72%12%11%77%6%7%87%36%12%52%
    >=55 years15%10%75%10%10%80%5%5%90%35%10%55%

    Things to keep in mind:

    • Every year on your birthday, there will be a reallocation among the asset classes.
    • Only twice can you alter your preference at any point throughout the financial year.
    Subscribers can change their Pension Fund Manager once and the composition of their assets four times in a financial year.
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