ICICI Pru ranked first for managing EPFO funds

ICICI Prudential AMC has emerged as the top earner by providing a return of 8.73 per cent on the EPFO funds, invested by the private fund house during the nine months period ended June 30.

The State Bank of India was relegated to the second spot by providing 8.70 per cent returns to the Employees’ Provident Fund Organisation (EPFO) during the period, according to the Crisil analysis.

The other two fund managers HSBC AMC and Reliance AMC were ranked third and fourth having recorded investment yields of 8.67 and 8.52 per cent, respectively.

The EPFO had appointed the four fund managers in July last year to manage its funds with an idea of improving returns on its funds. A major chunk of its funds are invested in government schemes and securities having yields of less than 8 per cent.

EPFO manages PF deposits of about 45 million subscribers with a corpus of around Rs 2.57 lakh crore. Its incremental deposits every year is close to Rs 25,000 crore. It had also appointed Crisil for evaluating the performance of fund managers.

According to Crisil’s earlier assessment for the period from September 17, 2008, to March 2009, SBI was providing the best returns at 9.14 per cent.

ICICI Pru AMC, HSBC AMC and Reliance AMC were ranked second, third and fourth with returns of 8.84, 8.72 and 8.68 per cent, respectively, for those six months.

EPFO is maintaining interest rate of 8.5 per cent for depositors since 2005-06 because of low return of government securities, schemes and instruments. Before that it remained 9.5 per cent for the three consecutive fiscals from 2002-03.

It gave 11 per cent and 11.25 per cent interest on PF deposits in 2000-01 and 2001-02, respectively.

“Though yields on the investment done by four appointed managers are commendable, but these are a still not in two digits,” Hind Mazdoor Sabha Secretary A D Nagpal said.

“This is happening because of prevailing low interest rate regime of the central bank. However, it gave some boost to the industry to some level, but it reduced returns on various investments by the institution in the market,” he added.