To offset the declining interest rate regime and to provide better returns to its investors, the retirement fund body is considering offloading more funds in the state-government securities as well as AA+ rated instruments.
VP Joy who is the CPFC and heads the body's corpus amounting to a sum of Rs. 10 lakh crore says that the body always looks for ways to increase investor's wealth by working on ways within the government's guidelines.
"When interest rates are falling, we also look for opportunities where we get higher returns. That is why EPFO put some money in equities. We increased equity investments (ETF) to 15% from 10% in an incremental way ," Joy told one of the leading dailies.
The development draws the fact that after receiving approval from the CBT or Central Board of Trustees, the retirement fund body shall invest heavily in ETFs to the tune of Rs. 22500 crore so as to increase its holdings in equity linked schemes. So far the body has invested as much as Rs 23000 crore and the annualized yield from the account has been at 12%.
"EPFO has signed an MoU with Hudco for its members. If individual members take housing loans, such loans can be repaid from instalments of EPF."
The body's mix of investment comprises govt. securities, corporate bonds, state loans as well as other Special deposit scheme.