EPFO has invested Rs 9,723 cr in ETF's till Oct 31

The Dollar Business Bureau

The government on Monday announced the Employees' Provident Fund Organisation (EPFO) has invested Rs.9,723 crore in exchange traded funds till October 31 this year, while the absolute returns till the same period stood at 9.17%.

"The total corpus of EPFO was Rs 7.49 lakh crore as on March 31, 2016. The total amount invested by EPFO in ETFs is Rs 9,723 crore as on October 31, 2016 and the absolute return was 9.17 per cent as on October 31, 2016," Labour and Employment Minister Bandaru Dattatreya said replying to a question in the Lok Sabha.

Dattatreya said EPFO's investment in exchange traded funds (ETFs) will be raised to 10% from its current level of 5% within the scope of investment pattern, as notified by the Finance Ministry. EPFO is investing only in Nifty and Sensex ETFs as a precautionary measure, he added.

"The returns from investment made in ETF are generally more than the returns from other investments. Therefore, the subscribers are benefitted due to higher returns," he said.

He also said the dividend yield is a part of the net asset value of the ETF, and it would be added to the account of EPF of the employees wherever applicable.

Referring to the EPFO's decision to invest in capital market, he said the decision was vehemently opposed by various stakeholders. "Employees' representatives of the Central Board of Trustees (CBT) opposed the move to invest in capital market," he said.