Even amid the boom, investments in government stocks hit EPFO ​​hard


MUMBAI: The current rally in the stock market has given the Employees Provident Fund Organization (EPFO) an annual return of 18.50 per cent on its gross equity investment of Rs 1.5 trillion. If the organization had been a little more pragmatic in its equity investments, the return rate might have been even higher. The fund's investment was valued at Rs 1.50 trillion.

India: EPFO ​​returns on ETFs and Central Public Enterprise Sector (CPSE) Exchange Traded Funds (ETFs) have been weak or negative.

An estimated 20 million salaried employees of the country contribute to the EPFO. The EPFO's central board meeting on November 30 is expected to shed more light on the fund's equity investments.

India 3 was launched with the aim of achieving the disinvestment target of public sector undertakings from public sector undertakings, while CPSE ETF tracks the performance of specific government undertakings.

In FY 2021, EPFO ​​has received a negative return of only 2.10 per cent year-on-year on its investments in India 5 and 1.50 per cent on its investment in CPSE ETFs. Thus, the overall return on EPFO ​​has declined, according to a study by a research firm.

With good returns, EPFO ​​would have been able to provide higher interest to its members, said one analyst. EPFOs invest in the stock market through ETFs.

As on March 31, 2021, the organization had invested Rs.10,000 crore in CPSE and Bharat ETFs.

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