EPFO invests in ETI
Posted on: 07/Aug/2015 12:14:48 PM
On Thursday the Employees Provident Fund Organization (EPFO) has cautiously kicked off the process of investing in the stock market. Five percent of the incremental funds that the EPFO acquires every year will be invested into equity markets through the SBI-ETF Nifty and SBI-Sensex ETF, which will be managed by SBI Mutual Fund. The Nifty ETF is expected to get 75 percent of the funds while the rest will go to the Sensex ETF. But EPFO officials clarified that these are just thumb rules and if the government comes out with a disinvestment plan by floating a CPSE ETF then the EPFO might consider that option as well.
Traditionally, EPFs have invested in debt instruments, which are considered to be safe assets. But over the years, many studies have shown that equities give higher returns over the longer term. For the last ten years, the Sensex has given a return of 11.65 percent annually, compared with the EPF which has returned 8.75 percent annually.
