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ICICI Pru EPFO`s top fund manager; provides 8.77% returns

Last Updated: Sunday, October 11, 2009 - 11:42

New Delhi: ICICI Prudential has retained the top position among the Employees` Provident Fund Organisation`s (EPFO) fund managers giving 8.77 percent return during the one-year period ending September 2009.

ICICI Prudential was followed by the asset management entities of
HSBC AMC, SBI AMC and Reliance Capital AMC, said a performance
analysis conducted by rating agency Crisil on behalf of EPFO.

HSBC AMC and State Bank of India earned returns of 8.74
and 8.73 percent during the one- year period on the investment of EPFO`s funds. Reliance Capital AMC provided a return of 8.65 percent.

Earlier, ICICI had also emerged as the top earner giving 8.73 percent return on EPFO funds during the nine-month period ended June 30.

The State Bank of India is at the second spot providing
8.70 percent returns to EPFO during the nine-month period
(September 2008 to June 2009).

The other two fund managers HSBC AMC and Reliance AMC
ranked third and fourth having recorded investment yields of
8.67 and 8.52 percent, respectively during the said period
of nine month.

The EPFO had appointed the four fund managers in July
2008 to manage its funds with an idea of improving returns on
its funds. A major chunk of its funds are invested in
government schemes and securities having yields of less than 8

EPFO manages PF deposits of about 4.5 crore subscribers
with a corpus of around 2.57 lakh crore. Its incremental
deposits every year is close to Rs 25,000 crore. It had also
appointed CRISIL for evaluating the performance of fund

EPFO is maintaining interest rate of 8.5 percent for depositors since 2005-06 because of low return of government securities, schemes and instruments. Before that it remained 9.5 percent for the three consecutive fiscals from 2002-03.

It gave 11 percent and 11.25 percent interest on PF deposits in 2000-01 and 2001-02, respectively. It maintained an interest rate as high as 12 percent for 10 years during 1989-90 to 1999-2000.

"Considering the bank deposit rates of various bank which
are below 7 percent for a period of one year, the performance
of the four fund managers is good. They earned returns of over
8 percent on invested EPFO funds given to them," Secretary of
Hind Mazdoor Sabha A D Nagpal said.

Nagpal, who is also member of the Central Board of
Trustees, said, "Though the returns are better than banks`
deposit rates, these should be in double digit."

"EPFO needs to do more vigilant monitoring of these fund
managers for improving returns. Besides the EPFO should take
very strict action against the under performing fund managers"
he added.

Bureau Report

First Published: Sunday, October 11, 2009 - 11:42
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