KK Jalan, chief of Employees' Provident Fund Organisation (EPFO) says it has "no option" but to change its rules and put money into riskier investments by buying stocks for the first time to seek higher returns. To get better returns, the fund with about $125 billion in assets needs to diversify investments, the bulk of which are in government debt.
Employees' Provident Fund Organisation (EPFO), world's ninth largest by assets, may change rules and buy stocks for the first time.
- It invests about 5 per cent of its assets in AAA-rated corporate debt and a quarter in paper issued by state-run companies.
- EPFO, funded by payroll contributions, holds 69 per cent of its assets in its provident fund. Another 29 per cent is invested in its $33 billion pension fund and the rest in a life insurance fund.
- The fund now invests nearly 70 per cent of its annual accruals of about Rs 70000 crore ($11.5 billion) in central and state government bonds, through the State Bank of India , ICICI Securities, HSBC and Reliance Capital as its portfolio managers.
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