Live Markets »News & Advice»Market News»Market News Details
Market News Details
Back

EPFO users may get an option to increase or decrease investments in ETFs

Somesh Jha/New Delhi 14 Apr 18 | 01:54 AM

The subscribers to the Employees’ Provident Fund Organisation (EPFO) may soon get an option to increase or decrease investments in exchange-traded funds (ETFs).


The EPFO also approved a plan to create a reserve fund for its equity investments to shield the subscribers from stock market volatility.

Related Stories

    No Related Stories Found
Widgets Magazine


Besides, the EPFO’s Central Board of Trustees (CBT), chaired by Labour and Employment Minister Santosh Kumar Gangwar, met on Friday and approved changes to the accounting policy of investment in equity.

ALSO READ: FinMin raises questions on interest rate of 8.55% proposed by EPFO

The CBT also approved the recommendation of the finance investment and audit committee, the EPFO’s advisory body, which suggested that the subscribers be allocated equity units only for 15 per cent of their contributions and all units over and above this allocation would be held by the EPFO, a statement issued by the EPFO said. 


“A separate reserve fund for smoothening out volatility of equity returns and to provide equitable returns to all the subscribers needs to be created," a statement issued by the EPFO said. EPFO Central Provident Fund Commissioner V P Joy said a committee had been formed to decide the modalities of creating a reserve fund for equity investments. The EPFO invests up to 15 per cent of the subscribers’ incremental deposits in ETFs. The EPFO has been investing in ETFs since August 2015 and has invested around Rs 420 billion in the equity instrument so far, giving a return of 17 per cent till February 28 this year.

ALSO READ: Over 80 mm EPFO accounts have no birth date, 110 mn missing father's name

The EPFO’s decision follows a suggestion by the finance ministry to create a reserve fund for its investments in various instruments such as equity and bonds. For the past few years, the finance ministry has been asking the EPFO to create a reserve fund and offer lower interest rates to ensure it does not suffer losses due to market volatility.


(With inputs from PTI)


Widgets Magazine

Sensex

Company Price Gain (%)
Tata Steel620.553.17
Yes Bank318.002.83
Bharti Airtel394.952.64
Larsen & Toubro1,384.301.74
Power Grid Corpn208.201.61

Poll

Currently No Poll Available.

Online Portfolio

You can create Online Portfolio here using the below button.

Widgets Magazine