Retirement fund body EPFO is not considering any proposal to increase investments in Exchange Trade Funds (ETFs), Parliament was informed today.
“The Central Board of Trustees (CBT), Employees’ Provident Fund (EPF) has approved investment of only 5 per cent 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 per cent.
Separately, the minister had earlier said: “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).
“The Finance Ministry gave us clearance to invest from 5 to 15 per cent. It is a long term investment. It may be up to 10 to 12 per cent depending upon the market conditions. We expect the markets would be stabilised in the long run. Markets also need money.”
EPFO had started investing ETFs in August last year. Trade Unions have been opposing the decision of the EPFO to invest ETFs in view of volatility in the stock markets.
The minister told the House that as per the pattern of Investment notified by Ministry of Labour & Employment on April 23, 2015, investment in equity and related investments is permitted from 5 to 15 per cent.