Besides, the Employees Provident Fund Organisation’s (EPFO) board will also consider a proposal to give an extension of six more months to its five fund managers SBI, ICICI Securities Primary Dealership, Reliance Capital, HSBC AMC and UTI AMC for managing its corpus, says agenda listed for the trustees meeting scheduled tomorrow.
The five fund managers were appointed for three years from April 1, 2015. They were given extension till June 30, 2018. Now, it has been proposed to give the five fund managers further extension till December 31, 2018, or till the time of the appointment of new fund managers.
The EPFO has been investing in ETFs and now wants to enhance its range to maximise returns on its investments in stock markets. Presently, it has invested in UTI Mutual Fund, SBI Mutual Fund, CPSE ETF and Bharat 22, a senior official said.
The body got the maximum appreciation on its investments in UTI Mutual Fund for which rate of return was 17.01 per cent with a total value at Rs 8,995.04 crore. This was followed by 16.07 per cent return on Rs 34,603.64 crore invested in SBI Mutual Fund.
The CPSE ETF gave a return of 7.94 per cent at an investment of Rs 1,860.81 crore whereas an investment of Rs 2,024.75 crore in Bharat 22 fetched a return of Rs 8.46 per cent.
The EPFO’s overall return on ETF investments of Rs 47,431 crore till May this year. Thus the EPFO wants to look for more rewarding options in equity-linked schemes.
The EPFO had started investing in ETFs in August 2015 with a mandate of investing 5 per cent of its investible deposits in the equity-linked scheme. The proportion was increased to 10 per cent in 2016-17 and 15 per cent subsequently in 2017-18.
The official said the trustees may deliberate to increase the quantum of investment in ETFs from present 15 per cent of the investible deposits. But, that could be done only after an amendment to the investment pattern for private provident funds by the finance ministry.
Source: Money Control