In a historic move, retirement fund body Employees' Provident Fund
Organisation (EPFO) on Thursday kick-started its investment in the stock
markets for the first time.
Here is a 10-Point Cheat-Sheet
1) The provident fund body plans to invest Rs 5,000 crore this fiscal year.
2) Labour Minister Bandaru Dattatreya told NDTV that EPFO plans to gradually increase its investment in stock markets. The initiative to invest in stock markets was started to provide better returns for subscribers, he added. Currently, the rate of interest on provident fund deposits is 8.75 per cent.
3) The Labour Ministry had notified new investment pattern for EPFO in April, allowing the body to invest minimum of 5 per cent and up to 15 per cent of its funds in equity or equity related schemes. However, the EPFO management has decided to only invest 5 per cent of its incremental deposits in stock market during the current fiscal.
4) EPFO has Rs 8.5 lakh crore under its management, most of it invested in government bonds. It has a base of around 6 crore subscribers.
5) EPFO will invest in stock markets through exchange traded funds (ETF) that track the country's two main share indices - Sensex and Nifty. An ETF comprises a basket of stocks and it trades on an exchange like a stock and tracks an index.
6) EPFO's equity investment will be run by State Bank of India's asset management unit.
7) Analysts have welcomed the pension fund's decision to buying stocks. They hope that like state-run Life Insurance Corp of India, EPFO can be a steady source of funds especially in times of market turbulence.
8) But some analysts were disappointed at the initial amount. "The government needs to increase its investment into equities," said G Chokkalingam, founder of Equinomics, a research and fund advisory firm.
9) EPFO's initial amount of Rs 5,000 crore is only a fraction of the Rs 47,000 crore that Life Insurance Corp invested in stocks in the year to March 2015.
10) Indian shares were Asia's second-best performers in dollar terms last year but have retreated after hitting record highs in March. (With Agency Inputs)
Here is a 10-Point Cheat-Sheet
1) The provident fund body plans to invest Rs 5,000 crore this fiscal year.
2) Labour Minister Bandaru Dattatreya told NDTV that EPFO plans to gradually increase its investment in stock markets. The initiative to invest in stock markets was started to provide better returns for subscribers, he added. Currently, the rate of interest on provident fund deposits is 8.75 per cent.
3) The Labour Ministry had notified new investment pattern for EPFO in April, allowing the body to invest minimum of 5 per cent and up to 15 per cent of its funds in equity or equity related schemes. However, the EPFO management has decided to only invest 5 per cent of its incremental deposits in stock market during the current fiscal.
4) EPFO has Rs 8.5 lakh crore under its management, most of it invested in government bonds. It has a base of around 6 crore subscribers.
5) EPFO will invest in stock markets through exchange traded funds (ETF) that track the country's two main share indices - Sensex and Nifty. An ETF comprises a basket of stocks and it trades on an exchange like a stock and tracks an index.
6) EPFO's equity investment will be run by State Bank of India's asset management unit.
7) Analysts have welcomed the pension fund's decision to buying stocks. They hope that like state-run Life Insurance Corp of India, EPFO can be a steady source of funds especially in times of market turbulence.
8) But some analysts were disappointed at the initial amount. "The government needs to increase its investment into equities," said G Chokkalingam, founder of Equinomics, a research and fund advisory firm.
9) EPFO's initial amount of Rs 5,000 crore is only a fraction of the Rs 47,000 crore that Life Insurance Corp invested in stocks in the year to March 2015.
10) Indian shares were Asia's second-best performers in dollar terms last year but have retreated after hitting record highs in March. (With Agency Inputs)
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