Best NPS Fund Managers

1. LIC Pension Fund Limited

1. HDFC Pension Management Co. Limited
2. Kotak Mahindra Pension Fund Limited
3. Tata Pension Management Limited
4. Axis Pension Fund Management Limited
5. SBI Pension Funds Private Limited

1. UTI Retirement Solutions Limited
2. ICICI Prudential Pension Fund Management Co. Limited
3. Aditya Birla Sun Life Pension Management Limited
4. Max Life Pension Fund Management Limited

Duties of NPS Fund Manager 

The role of an NPS fund manager is similar to that of a mutual fund manager. The fund manager invests pension funds gathered from multiple investors in various assets. They categorise them as follows: government securities, corporate bonds, and stocks. It handles the pension funds that each investor invests in. They also perform reviews on the investments to determine how well they are performing.  

A fund manager is paid for the services they provide and this fee is based on the average number of assets they manage. The duties of an NPS fund manager are listed below: 

1. It pools investor funds to make investments in various asset classes with the goal of generating maximum returns at a reasonable risk. 
2. It assesses investment performance on a regular basis to obtain optimum returns. 
3. Investments must be made in the pool of funds based on the investment policy and regulations of the authority.

How to Select NPS Fund Manager 

Before you choose an NPS fund manager, you can select one of two scheme options: auto choice or active choice. On selecting an active choice, you will have to select the fund manager who will implement the asset allocation strategy.

Understanding the past performance of the asset class to which you would like to have a higher exposure is necessary. This way, you can evaluate the NPS fund manager's performance as well as track the record of the fund they have managed. 

In other words, you can examine fund factors such as the Sharpe ratio, consistency of returns, and more. If you want to opt for equity investment, you could select a fund manager who consistently performs well in equity funds.

If you prefer debt funds, you need to pick a fund manager that has a stronger track record in debt funds. Your level of risk tolerance must also be taken into consideration when choosing the fund manager.

The NPS is divided into the following categories depending on the investor's risk tolerance level as well as the allocation of the percentage of assets: 

Through this classification, you can invest in government securities, equities, and corporate bonds. The portfolio must be reviewed on a regular basis to analyse the performance of the funds. Additionally, keep in mind that you will be allocated a default NPS fund manager if you do not select one.  

Factors to Keep in Mind When Selecting the Best NPS Fund Manager 

When choosing the best NPS fund manager, here are some factors to be considered: 

1. Investment Goal: The selection criteria for NPS are comparable to those of mutual funds. The NPS was developed to help you after you retire. Therefore, the pension fund manager must share your investment goals. 

1. Risk Tolerance: You should evaluate your level of risk appetite, which will assist you in choosing the ideal asset allocation category. This way, you will be able to choose an NPS fund manager who matches the desired risk-reward ratio. 
2. Investment Duration: If you are choosing the asset allocation for the NPS scheme, you need to consider your investment horizon. The ratio of fixed income to equity will depend on how close you are to retirement. You can then evaluate the fund manager of your preferred asset class. 
3. Past Performance of Fund Manager: You can also look up the fund manager’s past performance who has been in charge of the fund for a while. This will assist you in selecting a suitable NPS fund manager.  

The NPS rules state that different fund managers can be selected for Tier I and Tier II accounts. However, selecting different fund managers for various asset classes within the same Tier will not be allowed. For example, if you opt for SBI Pension Fund, the equity, government securities, and corporate bonds will be managed solely by SBI.