Last month, the Employees Provident Fund Organisation’s (EPFO) apex decision making body had approved the proposal to increase the investments in exchange traded funds from 10 per cent to 15 per cent of the investible deposits.
“The EPFO had invested Rs 1.5 lakh crore 2016-17. The investible deposits are also estimated at Rs 1.5 lakh crore during the current fiscal. Thus the EPFO investments in ETF in 2016-17 would be about Rs 22,500 crore,” EPFO’s Central Provident Fund Commissioner V P Joy told PTI
Joy further said, “The EPFO has invested Rs 23,000 crore in ETFs so far. The annualised return on these investments has been over 12 per cent so far.”
The EPFO has an investment mix of government securities, state loans, corporate bonds and others like Special Deposit Scheme (SDS). The EPFO, however, gets returns even lower than 8 per cent on some of its investments particularly government bonds and schemes.
The EPFO had entered the stock market by investing 5 per cent in the ETFs in August 2015, which was raised to 10 per cent last year.
In 2015, the finance ministry had allowed private provident funds to invest 5-15 per cent of its investible deposits in equity or equity-linked schemes.