EPFO investments in ETFs to be raised beyond 5%: Dattatreya

Hyderabad, Aug 21 (PTI) Union Labour Minister BandaruDattatreya today said that EPFO will raise proportion of itsinvestments in exchange traded funds (ETFs) from the present5 per cent and a final decision on the quantum for currentfiscal would be taken very soon. SBI Mutual Fund and UTI Mutual Fund will manage thecorpus of the retirement fund in ETFs, he said. As on July 31 this year, amount invested in ETF byEmployees’ Provident Fund Organisation (EPFO) is Rs 7,468crore and the market value of this as on date is Rs 8,372crore, which shows a positive return of 12.10 per cent, theminister said. "An emergency meeting of Central Board of Trustees(CBT) of EPFO will be convened soon and a final decision onhow much (increase in quantum of investments in ETF)percentage will be taken after taking opinion. Earlier, wehad gone for 5 per cent. Now, how much we have to increase Iwill take a decision after the emergency meeting," Dattatreyatold PTI. "Anyhow the increase will be there and how muchincrease…within next 15 days we will decide," he added. The Finance Ministry had last year notified a newinvestment pattern for EPFO, allowing the body to invest aminimum of 5 per cent and up to 15 per cent of its funds inequity or equity-related schemes. EPFO had started investingup to five per cent of its investible deposits in ETFs inAugust last year. Reacting to a query on opposition by labour unions onthe proposal (to increase quantum of investments in ETFs), hesaid, "They (unions) are saying government should giveguarantee. Things are in positive direction and in prevailingmarket situation it will further more increase. World overinvestments of social security funds (are) in same pattern(ETFs)." Dattatreya further said the tenure of SBI Mutual Fundas ETF manufacturer for EPFO lapsed on June 30 and selectionof SBI Mutual Fund and UTI Mutual Fund has been done by CBT,adding new investments will restart in ETFs. "We have not stopped investments in ETFs during thelapsed period and taken care of investment pattern. In themeanwhile, (the period after it expired) funds amounting to Rs900 crore have been parked/invested in Liquid Mutual funds andsuch funds earned around 7 per cent approximately. "Thisamount will be withdrawn and invested in ETFs by both SBIMutual Fund and UTI Mutual Fund," the minister added. PTI VVKNPMKJSDM