In India, the benefit of the National Pension System (NPS) was extended to cover all the citizens (w-e-f-2009) to create an opportunity for the aging population to enjoy pensions in their old age. Like NPS, MF schemes are also available to achieve the desired retirement plans. Investment in various schemes is susceptible to risk among other factors, hence investors must hedge risk properly at the time of quantifying the returns. It is interesting to note that the basic features of both the NPS and MF as investment avenues are more or less the same and that creates apprehension whether the performance of the two investment avenues in terms of return is indifferent or not for the choice of a better investment option as a part of retirement plan. In the present study, an attempt has been made to provide a comparative performance analysis of NPS and MF schemes based on risk-adjusted trailing return i.e. Sharpe’s index. The analysis will facilitate the choice of a better investment instrument as a part of a retirement plan.

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Keywords: Retirement, Pension, National Pension Scheme (NPS), Mutual Fund (MF).