New Delhi: India’s pension regulator has broadened the scope of permitted investments, allowing deeper participation in equities, bonds and alternative assets in a sweeping update.
Under the revised guidelines issued on Wednesday, National Pension System (NPS) funds may buy into more stocks and debt securities, as well as some gold and silver funds and more real estate vehicles.
The move is expected to improve diversification and liquidity across portfolios as assets under management surge.
It’s also part of a broader move toward more risk tolerance by India’s pension authorities.
Embracing riskier assets may boost returns, while also exposing investors to more market volatility – the classic judgement call for such programmes globally that must serve investors with varied levels of sophistication.
Indians are embracing the NPS, which was introduced over two decades ago and oversees about US$177bil, as salaried individuals seek tax-efficient retirement savings. — Bloomberg
