Hyderabad: Retirement fund body Employees Provident Fund Organisation (EPFO) will invest Rs20,000 crore in exchange traded funds (ETFs) this fiscal as it has decided to raise the investment limit in ETFs, Union minister Bandaru Dattatreya said on Sunday.
“Yesterday, the EPFO Central Board of Trustees meeting held in Pune agreed on the proposal for raising ETF investments from 10 to 15% of investible deposits. This year we are going to invest Rs20,000 crore in ETF," the Union minister of state for labour and employment told reporters in Hyderabad.
The finance ministry had earlier notified a new investment pattern for EPFO, allowing the body to invest a minimum of 5% and up to 15% of its funds in equity or equity-related schemes. The EPFO had started investing up to 5% of its investible deposits in ETFs in August 2015.
In the first year (2015-16), Rs6,577 crore was invested, while the figure for 2016-17 stood at Rs14,982 crore. The return on investment in ETF was 13.72%, Dattatreya said, adding Rs234.86 crore was earned as dividend on the investment.
“This is encouraging...seeing the returns the entire board also agreed to go ahead for 15%. We are committed for more returns with safety of EPF funds," said Dattatreya.
On the issue of raising the wage ceiling for coverage of employees under the EPFO’s social security net from the existing Rs15,000 per month, Dattatreya said, “It is under examination."