“Giving subscribers the choice of investment for their provident fund money will make the EPFO scheme more lucrative,” the official added.The finance ministry had in 2015 directed EPFO to invest 5-15% of its incremental income into equities. Following this, in the first year itself, EPFO invested 5% in ETFs and this was raised to 10% and 15% in the subsequent years. The cumulative return on EPFO’s investment in equity was 13.72% until May in the two years since it began putting money in ETFs. Its investment in FY16 was Rs 6,577 crore, rising to Rs 14,982 crore or 10% of its incremental corpus in the following year.This year, the investment limit has been raised to 15% of the estimated Rs 1.4 lakh crore incremental corpus, which translates into about Rs 20,000 crore being invested in ETFs. “This will help subscribers to stay put while no members will come into its fold,” the official added.

Source: Economic Times October 05, 2017 18:22 UTC