EPFO's Investments In ETFs Surpass Rs 2 Lakh Crore Since 2018-19: Govt Reveals In Rajya Sabha

Total pool of various funds managed by EPFO as of March 2, 2022, was Rs. 18.30 lakh crore, of which 91.3 per cent has been invested in debt instruments and 8.7 per cent in ETFs. 

The minister also said that the EPFO invests funds as per the investment pattern notified by the government and does not invest directly in individual stocks, including those of any blue-chip company.

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The Employees’ Provident Fund Organisation (EPFO) has invested over Rs 2 lakh crore into exchange-traded funds (ETFs) since 2018-19,  Minister of State for Labour Rameswar Teli informed Rajya Sabha on Thursday. The minister, replying to a question, revealed that the total pool of various funds managed by EPFO as of March 2, 2022, was Rs. 18.30 lakh crore, of which 91.3 per cent has been invested in debt instruments and 8.7 per cent in ETFs. 

An ETF is a pooled investment security similar to a mutual fund. It usually follows an index, sector, or asset, and can be bought or sold on a stock exchange like a stock. It can track various things from commodities to securities or investment strategies.

Since 2018-19, the government retirement fund manager's investments in ETFs have shown a consistent upward trend. It began with an investment of Rs 27,974 crore in 2018-19, which then increased to Rs 31,501 crore in 2019-20. Over the subsequent years, this investment amount continued to climb, reaching Rs 53,081 crore in 2022-23. In the ongoing fiscal year up to July, the EPFO – the second largest financial institution in India – has allocated Rs 13,017 crore towards ETFs. The total investment in ETFs by the EPFO from 2018-19 to July 2023 now stands at Rs 2,01,212 crore.

The minister also informed that the EPFO invests in funds as per the investment pattern notified by the government and does not invest directly in individual stocks, including those of any blue-chip company.

"The EPFO invests in equity markets through ETFs, replicating BSE Sensex and Nifty 50 indices. From time to time, EPFO has also invested in ETFs constructed specifically for disinvestment of shareholding of the Government of India in body corporates," he stated.

In a separate response, Teli said that the Code on Social Security, 2020 outlines plans for extending social security benefits to gig and platform workers. These schemes can be executed through the EPFO and the Employees’ State Insurance Corporation, both of which offer social security benefits to workers in the organized sector.