The Employees’ Provident Fund Organisation (EPFO) has earned ₹67,619.72 crore from its entry into exchange-traded funds (ETFs), Business Standard reported.
The pension fund body had invested a sum of ₹1.59 trillion, which is now worth ₹2.27 trillion, according to the data shared in Parliament recently.
Equity ETFs usually look to closely track the returns of benchmark indices. They do not seek to actively buy and sell their holdings to generate higher returns like an actively managed fund.
They are considered a low-cost alternative to more expensive active funds, and do not have the same risk of underperforming the benchmark index.
The EPFO began to invest in equity ETFs in August 2015. The latest Lok Sabha (LS) reply provided data over recent years. It revealed that around ₹1.2 trillion of the overall ₹1.59 trillion worth of ETF investments have come since 2019-20.
The EPFO has invested an average of nearly ₹36,000 crore every year in ETFs. It has already invested ₹12,199.26 crore in the first three months of 2022-23.
Wealth advisors suggest higher allocations amid pushback since it would result in a more sustainable savings model for the retirement body.