The Employees’ Provident Fund Organisation (EPFO) has made a total of Rs 67,619.72 crore from investing in exchange-traded funds (ETFs). The retirement fund body invested Rs 1,59,299.46 crore till March 31 in ETFs, which grew into a notional market value of Rs 2,26,919.18 crore, Minister of State for Labour and Employment Rameswar Teli said in Parliament.
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How Much of PF Corpus Is Invested In Stock Market?
The EPFO invests 85 per cent of its corpus in debt instruments and 15 per cent in ETFs, as per the investment pattern notified by the government. The investment in exchange-traded funds is made based on Nifty, Sensex, central public sector enterprises (CPSEs) and Bharat-22 indices.
In the current financial year up to June, a total of Rs 12,199.26 crore has been invested in ETFs, out of the total investment (debt and equity combined) of Rs 84,477.67 crore. In 2021-22, Rs 43,568.02 crore was investment in ETFs, out of the total investment of Rs 2,89,930.79 crore, Teli said on Monday in a written reply to a query in the Lok Sabha.
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In the financial year 2020-21, the EPFO had made a total investment of Rs 2,18,533.89 crore, out of which Rs 32,070.84 crore was invested in ETFs. In 2019-20, the retirement fund body had invested a total of Rs 2,20,236.47 crore, out of which Rs 31,501.09 crore was invested in exchange-traded funds.
Does Govt Plan To Raise The Equity Exposure?
Yes. Currently, the government is planning to raise the equity exposure limit from 15 per cent to 20 per cent, which may be further increased to 25 per cent later. The proposal was to be taken up for discussion in the last meeting of the Central Board of Trustees in July, which could not be taken up as it was opposed by employees’ representatives in the executive committee meeting of the EPFO earlier.
EPFO trustee Harbhajan Singh Sidhu has said that there should be more detailed deliberation on the proposal before going ahead to amend the Employees’ Provident Fund Organisation’s investment pattern to increase the allocation of investible funds in equity-related instruments to 20 per cent from the existing 15 per cent in view of its volatile nature of the stock markets.
The proposal to revise the limit to 20 per cent has already been vetted and approved by the EPFO advisory body Finance Audit and Investment Committee (FAIC).
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How Much Interest Does EPFO Offer To Subscribers?
In June, the government approved a four-decade-low interest rate of 8.1 per cent on employee provident fund deposits for 2021-22. The decision impacts about five crore subscribers of the EPFO. In March, it had decided to pay an interest rate of 8.1 per cent on EPF (employee provident fund) amount for 2021-22, compared with 8.5 per cent earlier. The 8.1 per cent EPF interest rate is the lowest since 1977-78, when it had stood at 8 per cent.
