Need insight for NPS scheme selection LICPF Scheme G vs HDFC PF scheme E

[ania]

Been looking at returns at npstrust.

For scheme G LIC PF returns
Since inception are at 11.93%

For HDFC PF scheme E returns since inception is at 12.05%

HDFC has higher returns only in inception last 3 and 6 months from 29/10/2020

HDFC 12.05,4.81 and 18.26 respectively

LICPF 11.93,0.91 and 5.61%

LICPF has had higher returns in 1,2,3,5,7 years have been 13.33,16?44,11.56,11.29,11.99%

While HDFC returns for same duration have been -1.05,6.89,4.43,9.01.10.66% respectively.

From the given data it LICPF Scheme g seems more preferable than hdfc scheme E.

I understand most of portfolio in lic would of gsecs purchased earlier and the returns of further gsecs and may decrease in future.

While HDFC can have much high possible returns.

But looking at the data it appears LICPF has performed quite good wrt to hdfc PF beating it on most of the ocassions with much less fluctuations.

I'm leaning towards LICPF for this reason.

Am I missing something?

 

[readysweatygo]

@ania NPS invests largely in Large caps with a slight exposure towards highly liquid midcap stocks.

The main difference between LIC and HDFC is, LIC is one of the world's biggest value Investors. They chase (often successfully) value, as opposed to growth, investing in beaten down stocks, PSUs, and other quality names. This is reflected across their Mutual fund schemes as well.

Past performance is no guarantee of future performance, but you can't go wrong with a PFM among HDFC Bank/LIC/Kotak/SBI. These are quality names, reasonably efficient and a marginal Expense ratio will deliver you good returns.

 

[ania]

@readysweatygo Yep, but I am confused whether I should go with hdfc with major portion going towards equities it lic with major portion going towards government securities

 

[courtneye92]

@ania Any reason as to why you're comparing G Scheme of one pension fund to E Scheme of another pension fund ?

HDFC has higher returns only in inception last 3 and 6 months from 29/10/2020

Scheme E's returns would closely resemble the Nifty 50 index's returns.

For scheme G LIC PF returns Since inception are at 11.93%

For HDFC PF scheme E returns since inception is at 12.05%

Past performance is not an indicator of future returns. Besides, the difference in returns between the two schemes is very negligible.

G Scheme of all the pension funds have been performing well in recent years because of the falling interest rates.

 

[ania]

@courtneye92

G Scheme of all the pension funds have been performing well in recent years because of the falling interest rates.

That's what I was thinking as they mature, the returns on new g schemes may not be lucrative in the future.

I still have time to risk it with equity allocation.

But it really was surprising to see such performance with lic g securities

 

[courtneye92]

@ania

That's what I was thinking as they mature, the returns on new g schemes may not be lucrative in the future.

That doesn't mean that the returns will be terrible. Interest rate changes are cyclic, so staying invested in Gilts for the long-term can be beneficial.