Currently, EPFO invests up to 15 per cent of the fund in the equity market.
New Delhi: Employees’ Provident Fund Organisation (EPFO), which manages Public Provident Fund (PPF), is planning to allow subscribers to select the percentage of the fund that they want to invest in equities.
As of now, EPFO subscribers don’t have any such facility. The state-owned organisation currently invests up to 15 per cent of the fund through its fund managers in the equity market.
The decision could be taken on the backdrop of rising investors’ interest in the National Pension Scheme (NPS) investments, according to a report by ZeeBusiness. Currently, NPS allows investors to select the percentage of funds that they want to invest in equities.
As a result, investors are getting impressive returns in the NPS as compared to PPF. NPS also private and government employees to fix the investment limit on equities to protect them from market movements.
Currently, investors are receiving about 12% interest from their investments in the National Pension scheme. On the other hand, EPF investments are providing a return of about 8.5% for the fiscal year 2020-21.
So, to improve the returns on the investments made by its subscribers, EPFO could soon allow investors to select the percentage of funds that they want to invest in equities. Fund managers will take care of the rest.
However, investments in equities are likely to be capped at 50% of the total contribution in the PPF. The maximum limit could be even lower. The final decision will be taken in a meeting of the Central Board of Trustees in the coming days.
