EPFO Considers to Invest Beyond 5% in Equity

NEW DELHI: Employee Provident Fund Organisation abbreviated as EPFO, is thinking over carefully increasing its exposure to equity beyond 5% since its last year’s investment has begun to yield returns. Although the proposal was not listed on the agenda of the scheduled EPFO’s Central Board of Trustees (CBT) meeting on Friday, the chairman of CBT, the labour minister Bandaru Dattatreya, could move the proposal.

The equity exposure could be increased in the range of 7-10% of the fund that will be translated into an annual investment of more than Rs 10,000 crore in equity. In the last financial year over Rs 6,000 crore was invested in the equity. The finance ministry in a new investment pattern for the EPFO last year had allowed the body to make a minimum of 5% and up to 15% of investment of its funds in equity or equity-related schemes.

“It invested Rs 6,577 crore, or 5% of the investible surplus, inequities through exchange-traded funds in 2015-16. The investments in ETFs are done on the NSE and BSE in the ratio of 75% and 25% of the funds invested, respectively.” Since the move has been opposed by trade unions the ministry, though upbeat about the investment in equity is treading cautiously.