Increasing Embrace of the National Pension System
In a significant development, the National Pension System (NPS) funds managed by 10 pension fund managers have shown consistent growth and competitive performance over the past decade.
The journey of the NPS funds, detailed on August 5, 2025, reveals that the total assets under management (AUM) increased from ₹2,064 crore in June 2015 to a substantial ₹2.63 lakh crore in June 2025. This growth trend is a testament to the strategic investments made by the fund managers, who have categorised the funds into Equity, Government Bond, Corporate Bond, and Alternative categories.
Each of these categories has shown promising results, with returns either matching or exceeding their respective benchmarks. For instance, Equity funds, a significant portion of which are allocated to equities in U.S. public pension funds, have grown steadily, accounting for about 25% of pension fund AUM in the U.S. by 2023.
Government bonds, a strategic part of the investment portfolio for stability, accounted for around 20% of pension funds' total AUM in the U.S. in 2023. Corporate bonds, included within fixed income, and Alternative investments, such as private equity and real assets, form a smaller but growing part of portfolios.
However, it's important to note that these gains have been moderated by challenging market conditions such as subdued economic growth and higher interest rates, which have weighed on both equity and bond markets, particularly in Europe. As a result, the average investment return for state and local pension plans in 2025 was estimated around 5.41%, below historical averages, indicating pressure on fund managers to meet benchmarks amid volatile markets.
The growth in total pension fund AUM is expected to continue through 2025 and beyond, with a projection of global public pension fund assets reaching $35.4 trillion by 2030.
In the case of the NPS funds, they were compared not only with their respective benchmarks but also with comparable mutual fund schemes. This comparison highlights a shift toward passive investment products, which affects the competitive landscape for pension fund managers. However, detailed performance-by-performance comparison data is limited in the available resources.
Meanwhile, SAP, a leading multinational software company, has also made strides in India. In 2015, SAP opened a Devanahalli campus with an investment of €194 million, and the campus expansion is planned to be completed in phase two by 2028.
In summary, the NPS funds have demonstrated a steady growth trend and competitive performance, making them an attractive investment option for many. However, for detailed, manager-specific AUM growth and benchmark-relative performance data, consulting specialized pension fund industry reports or proprietary databases would be necessary.
- The consistent growth and competitive performance of NPS funds over the past decade have made them an appealing choice for investors in the business and finance world.
- The strategic decisions made by the fund managers, such as the categorization of funds into Equity, Government Bond, Corporate Bond, and Alternative categories, have contributed to the impressive growth of NPS funds.
- As stated in the analysis, the average investment return for state and local pension plans in 2025 was estimated at around 5.41%, a figure lower than historical averages, highlighting the pressure on fund managers to meet benchmarks in volatile markets.
- To gain a deeper understanding of the growth and performance of individual pension fund managers, one might need to consult specialized pension fund industry reports or proprietary databases.
- In addition to NPS funds, other entities like SAP, a prominent multinational software company, have also made significant strides in various markets, such as India, demonstrating a growth trend in the broader economy and investment landscape.
