Labour Minister Bandaru Dattatreya on Monday said the board of retirement fund body EPFO will deliberate on raising investment limit in exchange traded funds (ETFs) to 15 per cent at its meeting later this month.
“The proposal to increase investment in ETFs to 15 per cent from 10 per cent in on the agenda of the Employees Provident Fund Organisation’s (EPFO) Central Board of Trustees meet scheduled on May 27,” Dattatreya told reporters here.
“We will deliberate on the proposal and take a decision in this regard. The EPFO has investment ₹17,000 crore so far in the ETFs and earned an encouraging returns of over 13 per cent,” he said.EPFO had started investing in ETFs from August 2015 by putting in 5 per cent of its investible deposits of around ₹1 lakh crore. In 2016-17, the proportion of these investments was raised to 10 per cent. It is likely to be raised further to 15 per cent in the current fiscal.
The proposal was deferred at the CBT meet held on April 12, 2017 because some unions had sought an exit policy for liquidating investment in ETFs, securities and state loans to maximise returns before raising the proportion of equity linked investments.
On this issue, Dattatreya said: “Our investment in ETFs is for the long term because there would be more returns. We don’t want to take the risk (by selling ETF investment in short term). Long term means 10 years or 15 years. We have appointed CRISIL for these investment.”