The Pension Fund Regulatory and Development Authority (PFRDA) has made major changes to investment rules.
With the new regulations, pension funds can now invest in a wider range of assets, including more stocks, gold ETFs, and silver ETFs.
This move aims to offer better diversification and potentially higher returns for investors saving for retirement.
Expanded Investment Rules for Pension Funds
PFRDA has amended its investment regulations to give private pension funds more flexibility and help increase their popularity.
Under the updated rules, pension funds can now invest in 250 market-cap stocks, instead of the earlier limit. They can also invest in gold and silver ETFs, which track these commodities easily.
Why These Changes Were Made
The new guidelines aim to strengthen retirement funds by offering more investment options. Over the past year, gold prices have risen by more than 60% and silver by over 80%.
At the same time, the number of ETF investors has been growing. With the inclusion of gold and silver ETFs, pension funds can now diversify into commodities.
This means NPS and other pension fund investors will also benefit from these additional options.
What Were the Previous Rules?
Earlier, according to PFRDA regulations, pension funds were allowed to invest only in the top 100 company stocks. Now, they can invest in stocks of more than 250 companies. These changes have been implemented immediately.
The regulator had already allowed pension funds to launch schemes based on clients’ risk profiles. Currently, the private pension fund industry manages assets worth ₹15.78 trillion for nearly 80 million clients.
With the latest changes, PFRDA aims to further expand the client base.
The updated guidelines will help pension funds create more balanced portfolios, combining the stability of ETF investments with the growth potential of equity investments.
