EPFO to consider investments of up to 15% in ETFs on 30 March
EPFO trustees will meet to discuss whether to increase its investments in ETFs to 15% of investible deposits in 2017-18, up from the current 10%
New Delhi: The Employees’ Provident Fund Organisation (EPFO) trustees will meet on 30 March to discuss whether to increase its investments in ETFs to 15% of investible deposits in 2017-18, from the current 10%.
EPFO had entered the stock market by investing 5% in August 2015, which was raised to 10% last year. “Now buoyed by the performance of the stock market and expected good returns on such investments, the EPFO’s apex decision-making body the Central Board of Trustees (CBT) will deliberate on further increasing flow of its funds into ETFs at a meeting scheduled on 30 March 2017,” person aware of the development said.
The person further said the status note on the ETF investments by EPFO is listed on additional agenda of the CBT meeting next Thursday. Earlier in 2015, the finance ministry had allowed private provident funds to invest 5-15% of its investible deposits in equity or equity-linked schemes. In view of the volatile nature of stock markets, the EPFO had then decided to start with investing just 5% of its over Rs1 lakh crore investible amount in ETFs.
“We are proposing to invest up to 15% during the next year. The CBT meeting will be held on 30 March. We will seek its opinion. So far, during the past one-and-a-half year, we invested Rs18,069 crore. We are getting good yield. It is encouraging,” labour minister Bandaru Dattatreya had told PTI last week.
The minister had said that so far in the current year, the PF body invested the amount in the two index linked ETFs—the BSE’s Sensex and the NSE’s Nifty, which yielded a return of 18.13%. According to the statement in the Rajya Sabha on Wednesday, the total amount invested by the EPFO in ETFs as on 18 February 18 is Rs18,609 crore—Nifty 50 and Sensex index based ETFs: Rs17,105 crore and CPSE index based ETF: Rs1,504 crore.