Govt backs higher EPFO stock exposure

The government has backed the idea of the Employees Provident Fund (EPFO) investing up to 15% of its assets in equities to stabilise the stock market and lower volatility .

"We are now saying Employees Provident Fund Organisation, which always had the ability to put up to 15% of its assets in equity markets but never did so, has to now do at least 5%.And, hopefully over a period of time they bring it up to 15%," junior finance minister Jayant Sinha told the India Economic Convention. "We are trying to ensure that we stabilise and smoothen out our equity market," he added  Stock Market Trading Tips

Last month the EPFO, the entity that manages the country's pension fund, started investing in the stock market for the first time in its 64-year history , putting token amounts in two index-based exchange-traded funds (ETFs), run by SBI Mutual Fund. Although the EPFO is allowed to invest up to 15% of its incremental inflows in stocks, Bandaru Dattatreya, minister of state for labour and employment, had said that to begin with, it would put in only 5% of its incremental flows, or about Rs 400 crore per month. The move had reflected a cautious approach by first-time equity investor. 

Since 1951, when the organization was set up, the central decision-making body of the fund manager has refrained from investing in stocks because of the higher risks associated with it and had stuck to buying government securities and bonds issued by state-run companies Himanshu Tiwari Astrologer Blog

EPFO, which manages money on behalf of about 4.7 crore subscribers, now plans to put in about Rs 5,000 crore in equities till March 2016 through the ETF route.It manages Rs 8.5 lakh crore investment. While there have been suggestions in the past to step up investment in the stock market for better returns, the pension fund manager has been cautious in its moves. 

Sinha also said the economy was poised to record a healthy growth rate and the government was taking steps to sustain the momentum. "We want to build India's productive capacity so that we can sustain 8-10% non-inflationary GDP growth rate not just for few years, but to be able to achieve that growth steadily through boom and bust cycles Commodity Market Astrology Tips