A stock market surge has delivered to the Employees’ Provident Fund Organisation (EPFO) an annualised return of 14.6 percent on its Rs 1.23 trillion cumulative investment in equities.
That would cheer the over 60 million salaried individuals who contributed to the government’s retirement savings manager, although the return has been dragged down by dismal yields on its exposure to the Bharat 22 and central public enterprise sector (CPSE) exchange-traded funds (ETFs).
Bharat 22 was launched to fulfil the government’s target of divestment from public sector companies. CPSE ETF tracks the performance of select CPSEs.
Exposure to Bharat 22 has fetched the EPFO an annualised return of just 2.1 percent in the year that ended in March; its investment in CPSE ETF gave it a negative return (-1.7 percent) by the end of financial year 2021, according to data and details accessed by Moneycontrol.
Experts say the better equity yield will enhance the EPFO’s interest paying capacity, but its exposure to some of the ETFs needs to be pared to curb losses on investments of employees’ statutory savings.
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