EPFO earns only a small return on its first ever investment in equities

Much to the disappointment of trade unions and labour ministry, the Employee Provident Fund Organsiation ( EPFO) has earned only a small return on its first ever investment in equities, but defends the decision saying such investments need longer time to deliver.

Return on investment from Exchange Traded Fund ( ETF) is just 1.52% in the period August-October, the organization that manages the retirement savings of organised sector said on Tuesday after a meeting of the trustees of the board.

"Trade unions have raised their concerns on the low returns and the issue will be discussed at the Finance Audit and Investment Committee to be convened shortly," Jalan told media after the central board of trustees meeting on Tuesday but added that such investments cannot be assessed on short term basis.

"These are long term investments and hence we should not assess returns month after month," he added.

EPFO has invested Rs 2330 crore in ETF since August.

In August it had chosen SBI-ETF Nifty and SBI Sensex ETF for routing its investment in stock markets.

EPFO has in the last two years delivered return of 8.75% for its subscribers. The organization has been under tremendous pressure to invest in equities, like in the case of the National Pension System (NPS), to generate higher returns for its subscribers.