Your trusty ‘ol #EPFO (Employees' Provident Fund Organisation) has decided that they need more #equity in their investment #portfolio. This matters because of the sheer size of the corpus at EPFO’s disposal. (1/6)
Increasing allocation to equities will allow EPFO subscribers to participate in the #stockmarket materially. The large corpus under the EPFO will also raise the demand for equity and bring in added #liquidity. This is good for #Indian investors’ equity wealth. (2/6)
Currently, the EPFO can invest between 5% to 15% of their investible deposits in equity or equity-related instruments. They want to bring this number up to 20%. (3/6)
The EPFO began investing in equity in 2015, with 5% of its investible fund. The exposure was raised to 15 % for this year. The investment vehicle of choice for the EPFO has been Index Linked ETFs. (4/6)
The estimated return on the EPFO’s equity-related investments was 8.29% between Feb 2019 to April 2020. It was affected by the impact of COVID-19 on the equity market. As of March 2022, the latest from EPFO’s equity investments was 16.27%. (5/6)
So, if the EPFO is choosing to focus more on equity, that’s something to consider. After all, they are one of India's biggest investors in the long game. (6/6)
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