NPS subscribers can now select preferred fund managers. How should investors choose one for different asset classes

livemint.com:

National Pension System (NPS) subscribers in the 'All Citizen Model' and 'Corporate Model' categories, allowing them to choose preferred fund managers for equity, corporate debt, and gilts. The National Pension System (NPS) consists of an open architecture that provides flexibility to subscribers to choose across asset classes, Pension Fund Managers (PFMs), and Central Recordkeeping Agencies (CRAs).

“This new facility offered by PFRDA to NPS subscribers to choose their preferred fund managers for different asset classes is a welcome step in the right direction and is an extension of hosts of flexibilities that NPS provides. It allows discerning investors to evaluate the past fund returns of various fund managers across asset classes and select the one best suited for them," said Kurian Jose, CEO, of Tata Pension Management.

We would however caveat that past performance records may not predict future returns and should not be the only yardstick to evaluate PFMs, said Kurian Jose We would further advise subscribers to understand that NPS is a long-term retirement goal product and hence evaluate and choose Fund managers with a long-term view considering the Fund house credentials, pedigree, and investment philosophy along with the potential to generate stable and consistent returns over a long period, added Jose 1)The facility of selection of multiple (maximum of 03) Pension Funds (PF) by the asset classes (except Alternate Asset Class or Scheme A) is available to the existing subscribers under the NPS All Citizen Model (Tier-I), NPS Corporate Model (Tier-1) and Tier-II (all subscribers). 2)For new subscribers (aforesaid category), this option shall be applicable three months after their registration into NPS.