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UTI Retirement Solution Pension Fund: Know Its NPS Performance And Portfolio

UTI Retirement Solution Pension Fund has outperformed its benchmark in the one- and two-year categories in the National Pension System. Its highest holdings include the banking, energy, and technology sectors

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Outlook Money
January 12, 2024
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UTI Retirement Solution Pension Fund (UTI RSL) is one of the designated fund managers in the National Pension System (NPS). The Pension Fund Regulatory and Development Authority (PFRDA) brought about several changes in the NPS in 2023 to make it flexible and better suited to the subscribers’ retirement fund needs. These changes included giving subscribers the option to choose more than one fund manager for investment options among others.

Hence, it is important to know about different pension funds and their performance, and accordingly select them for your investment.

UTI Retirement Solution Pension Fund is one of the oldest pension funds, launched in May 2009. It manages pension funds for government employees (central and state), as well as the subscribers in the private sector. Out of the four investment schemes (equity, government bonds, corporate debt, and alternative funds) offered under NPS, equity has delivered the highest return overall.

According to data from the NPS trust, as of January 5, 2024, UTI RSL’s return since inception was around 12.8 percent. The pension fund manager surpassed its benchmark’s return in the one- and two-year periods, generating 12.07 percent and 11.80 percent, respectively, compared to the benchmark’s return of 11.21 per cent in one year, and 11.51 percent in two years, according to the latest available data as on November 30, 2023. Here we check more details of UTI Retirement Solution Pension Fund in the equity scheme.

Also Read: 7 Important Things To Keep In Mind While Planning For Your Golden Years

Return In Less Than 12 Months: Out of the 10 pension fund managers, four funds started in 2009, with UTI RSL being one of them. The other three are SBI Pension Fund, ICICI Pension Fund, and Kotak Pension Fund. In the less than 12-month period, Kotak Pension Fund has given the highest return (5.76 per cent in three months and 12.53 per cent in six months), outperforming its peers, but still less than the benchmark returns. UTI RSL offered slightly less (5.40 per cent) than the benchmark return (5.89 per cent) in three months and 11.20 per cent in six months, compared to the 12.62 per cent return in the benchmark.

Return In 1 Year: In terms of one-year return, UTI RSL outperformed the benchmark, giving a 12.07 percent return. However, among the funds launched in 2009, ICICI Pension Fund and Kotak Pension Fund offered returns of more than 14 percent, while Tata Pension Fund offered returns of 12.18 percent. The benchmark return was 11.21 percent for one year.

Return In 5 Years: Experts suggest that equity investment needs time to grow, and being a volatile asset class, one should keep a watch on their performance. Nevertheless, the NPS investment is for the long term, and thus funds remain invested until one retires. In five years, UTI RSL’s return of 13.96 percent was outdone by Kotak Pension Fund (15.19 percent), ICICI Pension Fund (14.93 percent), and HDFC Pension Fund (14.77 percent). The benchmark return was a 15.01 percent return in five years.

Return In 10 Years: NPS was opened for all citizens of India in 2009, with four fund managers on-boarded in the same month and six fund managers coming later to manage funds from all types of subscribers. Return-wise, HDFC Pension Fund generated the highest return (14.18 per cent) in 10 years, followed by Kotak Pension Fund, ICICI Pension Fund, and UTI RSL with 13.95 per cent, 13.87 percent, and 13.79 percent, respectively as against the benchmark return of 14.14 percent.

Should Return Performance Be The Only Criterion For Selecting A Fund?

NPS provides the option to select the ‘auto’ investment option where fund allocation is done in equity and debt schemes based on the defined age slabs, and the ‘active’ investment option, which provides more flexibility. While historical performance and returns are important to get an idea of the fund’s performance, it may not remain the same in the future. So, if you choose the active option, don’t just look at the returns, but also at the pension fund’s portfolio, and fund managers’ credentials, along with their investment philosophy.

As of December 29, 2023, UTI RSL portfolio’s top five holdings consisted of banking, energy, and technology companies, making up around 32 percent of the total portfolio having around 60 stocks. The top five holdings include HDFC Bank, ICICI Bank, AXIS Bank, Reliance Industry, and Infosys Technology.

So, the next time while review the portfolio, don’t bother with short-term performance. As the investment is for the long-term, check long-term performance, or if not sure of managing it yourself, you can also go for the ‘auto’ investment option to ease your burden.

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