Nps is risky simply because it is almost always run by people who have no skin in the game. If a fund manager manages a portfolio badly, he may lose a few crores of aum…but his reputation is not at stake.

I am just telling you why I will never ever invest in a fund run by somebody who has NOTHING to lose. No loss of reputation. No loss of anything.

So a few years ago 2 mutual fund houses who were managing NPS money put the money into their own Index funds. So a Subra Pension Fund invests in Subra Index fund. How does Subra make money..? well he gets .01% which this fund is allowed to charge and Subra makes money in the Index fund where he charges 1.49% (max in an index fund).

Shocked? well do not be.

When I spoke to the trustee he said “this should not happen Subra”. I said go to the meeting.

He said “I was told that the law allows it”.

I told him “the most important thing I have learnt in life is that ETHICS cannot be Regulated”.

Then we find one fund house investing in direct plans of other fund houses. God, it sucks!

Then there are people who ask me “they have still performed very well….” so what is wrong?

I actually do not know what is wrong…but I know 2 people who started creating this ruckus in May 2018..and tagging the regulator (PFRDA)…

AT LAST THERE is a circular which says “nps cannot invest more than 5% in a mutual fund”. Well congrats guys you deserve the kudos…Congrats.

http://www.pfrda.org.in//MyAuth/Admin/showimg.cshtml?ID=1435