New Delhi: The Employees Provident Fund
Organisation has started looking for options to park 3-5 per
cent of its huge corpus of Rs 2.57 lakh crore of retirement
fund in stock markets to earn better returns.
"Index based strategy for investment in equities would be
most suitable for EPFO`s need", said an EPFO official in a
presentation before the Finance and Investment Committee (FIC)
The proposal, if accepted, could result an inflow of Rs
13,000 crore into the capital market. The EPFO, managing
retirement fund of about 4.5 crore depositors, has not
invested in stock markets so far.
It was felt at the FIC that alternative avenues are a
must to enhance or maintain overall returns to subscribers as
fixed income products would go down in future as evident in
the developed economies.
Investment in equities provide a good hedge against
inflation, unlike fixed income securities, the official said
in the presentation. That means equities investment is better
than fixed income securities.