EPFO gets negative returns on ETF investments worth Rs 1 lakh crore: Report

The Employees' Provident Fund Organisation (EPFO) has received negative returns on its investments of slightly over Rs 1 lakh crore in exchange-traded funds (ETFs).

EPFO's total returns on five years of investments worth Rs 1.03 lakh crore is -8.3 percent, according to a Mint report citing official documents.

The retirement fund manager's investments in Central Public Sector Enterprises (CPSE) ETF has yielded a -24.36 percent return, the report added.

Moneycontrol could not independently verify the story.

The matter is expected to be discussed at the central board meeting of the EPFO later this week, said the report.

The negative returns could have implications for subscriber payout, since interest rate might be impacted.

EPFO’s return on investments in the Bharat 22 ETF is -19.73 percent, the report added.

Two more ETFs - managed by SBI Asset Management and UTI Asset Management - have generated negative returns of -6.19 percent and -10.06 percent, respectively.

"Investments to achieve goals of government have their shortcomings. The retirement fund body needs to realize there is a difference between educated investors investing by choice, and uninformed workers’ money getting invested by default through avoidable ETFs," a member of the EPFO board said as per the report.

Out of its annual deposits, the EPFO invests 85 percent in debt instruments and 15 percent in ETFs, the report said.