SBI MF to manage EPFO's equity investments till June 30
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SBI MF to manage EPFO's equity investments till June 30

"The proposal was listed for discussion and consideration for last meeting of the EPFO's apex decision making body the CBT held on March 29. But it could not be taken up."

 PTI   
  • Mumbai,  April 14, 2016  
  • |  
  • UPDATED   08:33 IST
SBI MF to manage EPFO's equity investments till June 30
Photo: Reuters

Retirement fund body EPFO is likely to extend the tenure of SBI Mutual Fund by three months till June 30 for managing its stock market investments.

"The proposal to give extension to SBI Mutual Fund for managing Employees' Provident Fund Organisation's (EPFO) equity market investment for three months till June end is likely to be approved by the Central Board of Trustees' (CBT)," a source said.

"The proposal was listed for discussion and consideration for last meeting of the EPFO's apex decision making body the CBT held on March 29. But it could not be taken up. However, the advisory body Finance, Audit and Investment Committee (FAIC) has already recommended to extend the term of SBI Mutual Fund till June 30," the source added.

Earlier, the EPFO had constituted a committee for tendering the job of managing its equity market investments, which will finalise the bid document and conduct the entire auction for the purpose.

Once the auction is complete, the panel will recommend the names of asset management companies to the EPFO's main decision making body CBT for final approval.

Following Finance Ministry's approval for investing minimum of 5 per cent and maximum of 15 per cent in equity or equity related schemes earlier last year, EPFO had decided to invest 5 per cent of its investible deposits in exchange traded funds (ETF) in 2015-16.

The EPFO engaged SBI Mutual Fund for managing its equity market investments for the entire fiscal of 2015-16. EPFO entered the stock market on August 6, 2015.

Even after the close of financial year, the EPFO could not appoint fund manager for its equity investments after March 31, 2016. Now EPFO wants SBI Mutual Fund to continue till June. SBI Mutual Fund's term ended on March 31, 2016.

The source said that during the extension period, SBI Mutual Fund would charge the same fees of 0.07 per cent per annum on net assets.

According to latest EPFO estimates, it had invested Rs 5,920 crore in ETFs till February end which earned a negative yield of 9.54 per cent and the total investments eroded to Rs 5,355 crore.