In a move to promote investments in exchange-traded funds (ETFs) for this financial year, Government is planning to hold a meeting with Central board of trustees (CBT) soon. “We will soon hold the Central board of trustees (CBT) meeting where the proposal of raising EPFO’s investment in stocks will be discussed. But I am confident that it will go beyond five per cent,” labour Minister Bandaru Dattatreya said at a press meet here on initiatives taken by labour Ministry in the last two years of NDA regime.
Asked about the unions’ protest on this issue, the Minister, however said, “We will listen to the CBT members. They will speak on it whether to increase it or not. But the final decision will be of the labour Ministry. I am the Chairman of CBT and in capacity of Chairman I will take a decision.”
As per the past estimates of the EPFO, it earned a negative return of 9.54 per cent on its Rs5,920 crore investment in ETFs from August 6, 2015 to February 29, 2016. The market value of investments of Rs5,920 crore in the ETFs in 2015-16 was Rs5,355 crore as on February 29, 2016, as per an analysis of equity investment by the EPFO.
However, labour Secretary Shankar Aggarwal that the EPFO invested Rs6,788 crore in ETFs so far since August last year and has got a return or yield of 1.68 per cent on these investment. “At present, the investment is only 5 per cent in ETFs and in long terms it is profitable,” Aggarwal added.
In a bid to see quantum increase of investments of Employees’ Provident Fund Organisation (EPFO) into stock markets, the Minister hinted at increasing EPFO’s investment in exchange-traded funds (ETFs) for this fiscal from 5 per cent currently.
The CBT is the apex decision making body of the EPFO, which is headed by the labour Minister. Trade unions have already lodged their protest against parking EPFO’s funds in stock market and submitted their dissent note on the issue in earlier meetings of the CBT.