PFRDA Expands NPS & UPS Investment Universe: Gold–Silver ETFs, Top 250 Stocks, and Broader Debt Options to Boost Returns

In a major step toward enhancing long‑term wealth creation for India’s retirement savers, the Pension Fund Regulatory and Development Authority (PFRDA) has introduced sweeping reforms to expand investment avenues under the National Pension System (NPS) and Unified Pension System (UPS).

The revised guidelines—effective for both government and non‑government subscribers—are aimed at improving portfolio returns while balancing risk, diversification, and regulatory prudence. With NPS assets under management (AUM) standing at ₹16.46 lakh crore as of November 30, 2025, these changes mark one of the most significant overhauls in India’s retirement investment framework.

Key Reform 1: Gold & Silver ETFs Now Allowed

To diversify portfolios and improve long‑term returns, PFRDA has permitted pension fund managers (PFMs) to invest in SEBI‑regulated Gold and Silver Exchange Traded Funds (ETFs).

For Government Sector (NPS/UPS/APY)

A new investment subcategory has been introduced under Asset‑Backed, Trust‑Structured & Miscellaneous Investments (Category V).

• Investment allowed: Up to 1% of scheme AUM

• ETF types allowed: Gold ETFs, Silver ETFs

For Non-Government (Private) Sector

Gold and silver ETFs can now be part of the investment mix under the alternative asset bucket.

• Combined ceiling: Maximum 5% across
   REITs
   Equity‑oriented AIFs
   Gold & Silver ETFs

This comes at a time when both gold and silver ETFs have delivered 50%+ returns over the past year, supported by a global rally in precious metals.

 Key Reform 2: Equity Universe Expanded to Top 250 Listed Companies

Earlier, NPS equity investments were restricted to the top 200 companies.

Under the new norms:

• PFMs can now invest in top 250 listed companies (BSE/NSE rankings)

• This widens the investable universe and helps:

  • Capture growth in emerging large‑caps

  • Improve diversification

  • Enhance long‑term return potential

The move reflects PFRDA’s intent to reduce concentration risk and align NPS equity exposure with India’s expanding capital markets.

 Key Reform 3: Simplified Debt Norms—Greater Access to High‑Quality Bonds

To improve yield opportunities within the debt portfolio, PFRDA has relaxed norms for government sector subscribers:

Expanded Eligibility for Listed Basel‑III Tier‑1 Bonds

Earlier: Investment restricted to bonds issued only by Scheduled Commercial Banks.
Now allowed:

• All‑India Financial Institutions (AIFIs)
  – NABARD
  – SIDBI
  – EXIM Bank
  – NHB

• Government‑owned NBFCs
  – PFC
  – IRFC
  – IREDA
  – HUDCO

This widens the fixed‑income opportunity set while maintaining credit quality and regulatory oversight.

 Why These Reforms Matter

 Higher Return Potential

By expanding equity exposure and adding precious metals, PFMs can build more robust portfolios aligned with global best practices.

 Better Diversification

Exposure to gold, silver, REITs, InvITs, and a broader stock universe reduces volatility and strengthens long‑term stability.

 Enhanced Retirement Security

NPS and UPS subscribers—especially government employees—stand to benefit through:

• Reduced concentration risk

• Access to more modern asset classes

• Increased potential for inflation‑beating returns

 Support for India’s Capital Markets

The move aligns retirement savings with:

• Infrastructure growth

• Real estate monetization

• Deepening of bond markets

• Alternative investment ecosystem

 The Bigger Picture

The PFRDA’s new guidelines reflect a structural shift in India’s retirement investment philosophy—from conservative, G‑Sec‑heavy allocations to more diversified, globally aligned portfolios.

With these reforms, India moves closer to advanced pension systems such as those in:

• Canada

• Australia

• Singapore

• Europe

These markets benefit from multi‑asset retirement portfolios that combine stability with superior long‑term performance.

 Explore More Insights

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