Active Stocks
Fri Apr 19 2024 12:05:39
  1. Tata Steel share price
  2. 159.45 -0.34%
  1. Tata Motors share price
  2. 951.95 -2.00%
  1. Infosys share price
  2. 1,399.45 -1.49%
  1. ITC share price
  2. 422.10 0.75%
  1. NTPC share price
  2. 346.00 -1.54%
Business News/ Money / Personal Finance/  EPFO may reinvest half of ETF redemption proceeds in equity: Report
BackBack

EPFO may reinvest half of ETF redemption proceeds in equity: Report

The Central Board of Trustees will consider another proposal to increase the redemption period for better yields for investments in equities from four years to seven years in the next six years.

The EPF body wants to enhance its equity exposure and earn higher returns for its nearly 65 million subscribersPremium
The EPF body wants to enhance its equity exposure and earn higher returns for its nearly 65 million subscribers

The Employees’ Provident Fund Organisation (EPFO) is contemplating reinvesting 50 per cent of its exchange traded funds (ETFs) redemption proceeds back into equity, reported Business Standard

The PF body plans to do this to enhance its equity exposure and earn higher returns for its nearly 65 million subscribers

Sources close to the development said a proposal regarding this was discussed in the investment committee (IC) meeting in October last year, and the recommendation has been sent to the Central Board of Trustees (CBT), the apex decision-making body of the EPFO for its approval. The next CBT meeting is scheduled to be held on Saturday.

During April-October, FY24 EPFO invested ~27,105 crore in ETFs and the total investments of ETFs in the last seven years have crossed ~2.5 trillion. 

Raising the redemption period

The CBT will also consider another proposal to increase the redemption period for better yields for investments in equities from four years to seven years in the next six years. 

ALSO READ: Employees' Provident Fund Organization (EPFO) removes Aadhaar as valid date of birth proof. Here's what you can do

Currently, the EPFO redeems ETF units periodically for around four years and the capital gains realised from this exercise is then treated as income and distributed to EPF subscribers as income.

The committee also recommended framing guidelines for investment in the units of Infrastructure Investment Trusts and Real Estate Investment Trusts sponsored by public sector undertakings up to 3 per cent of EPFO’s total portfolio. 

“The committee discussed and recommended to the CBT that it amend the investment management manual by removing REITs and InvITs from the restricted category and allow investment in such REITs and InvITs which would be sponsored by the units of public sector undertaking (PSU)," sources said.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 08 Feb 2024, 04:06 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App