INR 5000 crore can be invested in EPFO through Exchange Traded Funds

Q.  As announced by EPFO on 6th Aug’15, what amount of money would be invest by EPFO via Exchange Traded Funds (ETF)?
- Published on 27 Aug 15

a. 200 Crore
b. 980 Crore
c. 2400 Crore
d. 5000 Crore

ANSWER: 5000 Crore
 
The Employment Provident Fund Organisation - EPFO will invest around Rs 5,000 crore this fiscal through SBI Mutual Fund's two index linked ETFs, one to the BSE's Sensex and the other to NSE's Nifty. The decision comes after the labour ministry allowed EPFO to invest 5 to 15 % of its incremental corpus in equities through ETFs. Asked why EPFO was starting off with just 5% of the corpus when it has the mandate for 15%, EPFO Commissioner K.K. Jalan said that the organisation had decided to go slow. Adding that investing through ETF route reduces risk, Mr. Jalan said fund allocation could increase to as much as Rs 70 billion to Rs 80 billion next year and that the organisation will also consider investing in other ETFs. Currently, EPFO has 8.5 trillion rupees under management, most of it invested in government bonds.

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