NPS equity fell 5–9% in a year while its bond schemes rose

One year of red in the equity option

The National Pension System lets you split a contribution across equity (scheme E), corporate bonds (C) and government securities (G). The NAVs the pension fund managers publish every day are in our database, so we can see how each option behaved. For the year to 2 November 2026 the pattern was stark: equity fell, the two debt options rose.

All figures are for Tier I, regular (POP) schemes. One-year is the NAV on 2 November 2026 against the last NAV on or before 2 November 2025. Three- and five-year figures are annualised.

Scheme E: negative everywhere

Ten managers run scheme E in Tier I. All ten were down over the year, by between 4.8% and 8.6%. The gap between the best and worst one-year result is 3.8 percentage points.

How that compares with mutual funds

NPS equity is mostly large companies, so the natural comparison is large-cap and flexi-cap mutual funds. Using direct-plan growth schemes as of 2 November 2026, the median one-year return was −4.2% for large-cap funds (38 schemes), −2.2% for flexi-cap (49) and −0.4% for multi-cap (37).

So the NPS equity option sat at or below the weakest of those medians over the year. Over three years the picture is closer: large-cap funds had a 10.9% median, flexi-cap 12.0%, and NPS scheme E ranged from 7.7% to 11.2%. The two are not like for like: mutual funds have their own expense ratios and NPS has a much lower charge structure, but NPS pension funds also invest under investment-pattern rules that mutual funds do not follow.

Schemes C and G: positive, modest

Corporate-bond mutual funds had a median 3-year return of 7.0% (34 schemes) and gilt funds 6.2% (39 schemes), so NPS schemes C and G sit almost exactly on those medians. Scheme C was ahead of G for every manager that reports both over three years.

What to take from it

• Equity gives the swings, debt gives the floor. The three options moved in different directions over the same twelve months, which is the argument for holding more than one.
• Asset class mattered more than manager. The spread across managers within scheme E (3.8 points) is small next to the roughly 7-to-12-point gap between scheme E and scheme C over the year.
• Look at the horizon you will actually hold. A contributor at 30 has three decades; a one-year fall is one point on a long line. Someone five years from retirement is the person for whom this volatility matters.

This describes past NAVs. It is not a suggestion to change your allocation. For how auto choice and active choice split your money, see NPS auto choice vs active choice, and for how NPS compares with other retirement saving, EPF vs NPS. Equity fund medians can be explored on /screener.