The Employees’ Provident Fund Organisation has seen tremendous growth in its investment corpus over the past five years. Official data indicate that the total amount in EPFO’s investment corpus more than doubled and stands at Rs 24.75 lakh crore for the fiscal year 2023-2024 as compared with Rs 11.1 lakh crore for 2019-2020.
The investments of EPFO are managed as per the investment pattern that has been outlined by the Department of Financial Services under the Ministry of Finance. The majority of these investments are done in debt securities and ETFs. The Central Board of Trustees approved the induction of ETFs in the investment policy of EPFO in its meeting held on March 31, 2015. Therefore, the EPFO started investing in ETFs from August 2015.
The total investment corpus in EPFO is Rs 24.75 lakh crore as of 31 March 2024, according to Shobha Karandlaje, Union Minister of State for Labour and Employment who spoke in the Lok Sabha.
Investment In Equity Markets
A large percentage of the investment by EPFO is channeled through ETFs in equity markets. These ETFs follow the major indices like BSE-SENSEX and NIFTY-50, thus having broad-based market exposure. EPFO has also been investing smartly in the ETFs designed for the disinvestment of the Government of India’s equity in public sector undertaking. This is through ETF tracking Bharat 22 and CPSE Indices.
As per details shared by the Minister, it has invested an impressive Rs 34,207.93 crore in ETFs within the 2024-2025 financial year ending October 2024 thereby strengthening its investment portfolio significantly.
In a bid to ensure more returns for its subscribers, the EPFO Central Board of Trustees headed by Labour and Employment Minister Mansukh Mandaviya cleared a new Redemption Policy for its ETF investments. The policy, adopted at a meeting held on November 30, 2024, focuses on ensuring higher income for the ‘Interest Account’ of the EPF Scheme.
The important features of the new policy include:
- A minimum holding period of five years for ETF investments.
- A mandate for returns higher than government securities.
- Performance benchmarking better than the CPSE and Bharat 22 indices.
Investments In Infrastructure And Real Estate
Beyond investments in equities, it further diversified its investments, getting approval for investments in units issued by PSU-sponsors Infrastructure Investment Trusts or InvITs and also in Real Estate Investment Trusts or REITs. These investment platforms fall under the purview of SEBI and present enormous returns, thereby propelling the long-term growth in the EPFO corpus.
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