India’s pension regulator has revised investment norms, introducing greater flexibility and wider asset diversification for pension funds — a move analysts believe will benefit midcap stocks more than smallcaps.
The Pension Fund Regulatory and Development Authority (PFRDA) announced on December 10 that private pension funds can now invest in the top 250 listed stocks by market capitalisation, expanding the previous limit of 200 approved stocks under the National Pension Scheme (NPS) trust.
In a significant diversification boost, the PFRDA has also allowed pension funds to invest in gold and silver ETFs, both of which have delivered strong returns this year.
These changes, released through a circular and implemented with immediate effect, aim to enhance the attractiveness of pension funds by offering subscribers a broader investment universe and better return potential.
