Labour Ministry in favour of raising EPFO’s investment in ETFs 

By: |
New Delhi | July 07, 2016 8:27 PM

Labour Ministry is of the opinion that the retirement fund body EPFO should increase investments in the stock markets through ETFs, as the exercise has started giving returns.

Union labour ministry, EPFO, ETFSThe EPFO had started investing in ETFs last August. It had started investing 5 per cent of its investible deposits in ETFs last fiscal. Now, there is a move to increase the proportion of such investments this fiscal.

Labour Ministry is of the opinion that the retirement fund body EPFO should increase investments in the stock markets through ETFs, as the exercise has started giving returns.

“We see the possibility of it increasing, but we want to discuss it with the Central Board of Trustees (CBT). I believe the investment in ETFs should rise,” Labour Minister Bandaru Dattatreya told reporters here when asked about the issue of increasing EPFO’s investment in Exchange Traded Funds (ETFs).

A meeting of Employees’ Provident Fund Organisation (EPFO) apex decision making body, CBT, is scheduled for tomorrow, where the issue of increasing investments in ETFs is expected to be taken up.

CBT is headed by the Labour Minister.

Dattatreya, however, said the government will take the issue of investments in the stock markets “step by step” and maintain a “cautious approach”. The issue will also be discussed with the CBT.

“See ETFs are performing now. The returns are now positive and so we feel we can increase the investments, but this have to be a step-by-step process,” he added.

As on March 31, 2016 the amount invested was Rs 6,577 crore which gave a return of Rs 6,601 crore, up by 0.37 per cent. As on April 30, 2016 the amount invested was Rs 6,674 crore and this gave a return of Rs 6,786 crore, which is up by 1.68 per cent.

“As Chairman I will discuss it with CBT members. Last year, It was 5 per cent and it can go up to 15 per cent as per Finance Ministry investment pattern,” the minister said.

An ETF trades like an individual stock in the market and is generally a basket of various securities such as shares, bonds, commodities and indices.

The EPFO had started investing in ETFs last August. It had started investing 5 per cent of its investible deposits in ETFs last fiscal. Now, there is a move to increase the proportion of such investments this fiscal.

“We are always looking at protecting the interests of the EPFO, if you look at the investments, we have increased investment in Centre and State government PSUs,” the minister said.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Amid stuttering loan demand, ICICI Bank to offer holistic solutions to corporates
2Uniform rule for MFIs may lead to competitive loan pricing
3HDFC Bank mobile app down for 1 hour; issues resolved