The Employees’ Provident Fund Organisation (EPFO) has more than doubled its investment corpus in the past five years. It reached Rs 24.75 lakh crore in 2023-24, up from Rs 11.1 lakh crore in 2019-20, according to official data.
EPFO ETF Investments
EPFO follows the investment pattern set by the Department of Financial Services, Ministry of Finance. It invests mainly in Debt Securities and Exchange-Traded Funds (ETFs). Since August 2015, EPFO has invested in ETFs after the Central Board of Trustees (CBT) approval. EPFO regularly invests in ETFs replicating the BSE-SENSEX and NSE NIFTY-50 indices. Additionally, EPFO invests in ETFs tracking the Bharat 22 and CPSE indices, aimed at disinvestment of government shareholding in corporates.
As of October 2024, EPFO has invested Rs 34,207.93 crore in ETFs for the 2024-25 financial year.
EPFO Board Approves ETF Redemption Policy
The EPFO Central Board of Trustees, chaired by Labour and Employment Minister Mansukh Mandaviya, approved a new Redemption Policy for ETF investments on November 30. The policy is designed to generate higher income for the EPF Scheme’s ‘Interest Account.’ It mandates a minimum holding period of five years and requires returns to exceed those of government securities and outperformance of the CPSE and Bharat 22 indices.
The CBT also approved guidelines for investing in units issued by PSU-sponsored Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs), regulated by the Securities and Exchange Board of India (SEBI).
These decisions aim to ensure a prudent investment strategy and boost returns for over 70 million EPFO subscribers.
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