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‘No plan to hike EPFO investment in ETFs’

As on 30 June, the total amount invested by EPFO in ETFs is Rs 7,468 crore

Policy Pulse
Publish Date: Jul 18 2016 11:12PM | Updated Date: Jul 18 2016 11:12PM

‘No plan to hike EPFO investment in ETFs’

 EPFO is not considering any suggestion to increase investments in Exchange Trade Funds (ETFs), Parliament was informed on Monday.

 
"The Central Board of Trustees (CBT), Employees' Provident Fund (EPF) has approved investment of only 5% in ETFs. At present, there is no proposal under consideration of the government to enhance this limit," Labour Minister Bandaru Dattatreya said in a written reply to Lok Sabha.
 
As on 30 June, the total amount invested by EPFO in ETFs is Rs 7,468 crore and the absolute return on the investment so far is 7.45%.
 
He had earlier said that there will be a CBT meeting before July 22. 
 
"We may take a decision on the quantum of investments to be made in ETF. We are in discussions with Bombay and National Stock Exchanges also. The investment will certainly increase (over last year),'' said Dattatreya
 
"The Finance Ministry gave us clearance to invest from 5 to 15%. It is a long term investment. It may be up to 10 to 12% depending upon the market conditions. We expect the markets would be stabilised in the long run. Markets also need money."
 
The retirement fund body had started investing ETFs in August last year. Trade Unions have been unhappy with the decision of the EPFO to invest ETFs in view of volatility in the stock markets.
 
Dattatreya told the House that as per the outline of Investment notified by Ministry of Labour & Employment on April 23, 2015, investment in equity and related investments is allowable from 5 to 15 percent.