EPFO
EPFO mulls increasing equity investment to 25 pc
New Delhi: The Employers' Provident Fund Organisation (EPFO) is considering a proposal to increase its investment in equities from 15 percent to 25 percent in order to cover the gap in the shortfall in returns with investment in debt securities, media reports said.
The matter was discussed by the Finance Investment and Audit Committee in a meeting two weeks ago.
The proposal is expected to be taken up by the EPFO Central Board of Trustees in the last week of June.
According to the proposal, the equity exposure will be raised and investment guidelines will be revised to diversify the portfolio between equity and debt proportionately.
After the meeting, the recommendations will be sent to labour and finance ministries for final approval.
If the recommendation is approved, the EPFO will invest nearly Rs 3,000 crore in the equity market every month.
The EPFO CBT is weighing the proposal to raise exposure in the stock market as the 85:15 debt to equity exposure doesn't leave the portfolio managers with many options and a higher return cannot be obtained.
At present, EPFO invests in equity via exchange traded funds (ETFs).
Its earning can go up to 9-10 percent with its increased investment in equity whereas debt investments would give only 6-7 percent, according to a Mint report.
At present, EPFO has a corpus of about Rs 17 trillion with Rs 14.46 trillion invested in debt and equity investments, where exposure is comparitively recent, are worth Rs 1.23 trillion.
Support Our Journalism
We cannot do without you.. your contribution supports unbiased journalism
IBNS is not driven by any ism- not wokeism, not racism, not skewed secularism, not hyper right-wing or left liberal ideals, nor by any hardline religious beliefs or hyper nationalism. We want to serve you good old objective news, as they are. We do not judge or preach. We let people decide for themselves. We only try to present factual and well-sourced news.
