EPFO invests Rs 2,909 cr in ETFs till Nov 26: Govt

It will invest only up to 5% of its total investment in ETF during this financial year

Retirement fund body EPFO has invested Rs 2,909 crore in Exchange Trade Funds (ETFs) in nearly four months with an objective to maximise its earnings, Parliament was informed today.

"Investments in ETF started in the month of August 2015 and a total of Rs 2,909 crore has been invested till November 26, 2015," Labour Minister Bandaru Dattatreya said in a written reply to the Rajya Sabha today.

According to the statement, as per the approval of the Central Board of Trustees (CBT), the EPFO would invest only up to 5% of its total investment in ETF during this financial year.

The Employees' Provident Fund Organisation (EPFO) has estimated to receive Rs 1.2 lakh crore as incremental deposits during the current fiscal. Thus, it is likely to invest around Rs 6,000 crore in the ETFs during 2015-16.

During the recent meeting of the EPFO's apex decision making body CBT on November 24, labour unions had expressed their reservations about investments in stock markets in view of an annualised return of 1.52% on such investment during the August-October period.

The EPFO has invested Rs 2,322.10 crore in ETFs during August-October on which it earned an annualised return of 1.52%.

"Trade unions have raised their concerns on low returns and the issue will be discussed at the Finance Audit and Investment Committee (FAIC) to be convened shortly," EPFO's Central Provident Fund Commissioner K K Jalan had told reporters after the CBT meeting here.

Now the issue of investment of EPFO funds in stock markets would be discussed in the meeting FAIC soon. After the advisory body meeting, it will place its recommendation based on the deliberations on the issue before the CBT.