Favouring increase in EPFO investment in the equity market to 15 per cent, Minister of State for Finance, Jayant Sinha on Thursday said the benefit of average costing must be available to the people saving for their retirement.
Citing global empirical studies, Jayant Sinha said that it has been established that systematic investment plans and average costing approach generate the best returns for long-term investors. “As you know there is an ability for EPFO to go up to 15 per cent in the equity markets (investment). The benefit of average costing should be available to people saving for retirement because the equity markets will go through ups and downs,” he said.
Sinha was talking to the reporters on the sidelines of PFRDA’s Pension Conclave. “There will be bull markets and there will be bear markets but if you follow an average costing approach, you will be building your own position in the market at appropriately low cost when the market is down,” Sinha said.