Page 23 - BANKING FINANCE JANUARY 2016 ONLINE

MUTUAL FUND

MUTUAL FUND

NEWS

EPFO rethinks on investing Rs 6,000 crore in ETFS Tata Balanced Fund and

Retirement fund body EPFO will rethink body, reviewed the performance of in- L&T Prudence Fund are
its move to invest Rs 6,000 crore in vestments in ETFs since August 2015,
exchange traded funds (ETFs) this fis- when the EPFO started investing its flavours of the season
cal in the view of concerns expressed money in the stock markets. After de-
by the trustees over the lower-than- liberations on the EPFO's investments Balanced funds such as ICICI Pruden-
expected returns. The Em- tial Balanced Advantage Fund, Tata
ployees Provident Fund in ETFs and returns earned Balanced Fund and L&T Prudence
Organisation invested Rs. so far, the FAIC will put up Fund, which make monthly dividend
2,322.10 crore in ETFs dur- its view for consideration payments, have caught the atten-
ing August-October on of the CBT for further ac- tion of investors in recent times.
which it earned an tion.
annualised return of 1.52 per cent. With investors putting more money
The EPFO has paid 8.75 per into such schemes, these fund houses
During a meeting of the Central Board cent rate on PF deposits in 2013-14 and have garnered huge assets over the
of Trustees (CBT), headed by labour 2014-15. The main purpose of the past one year. ICICI Prudential Bal-
minister Bandaru Dattatreya, the trust- fund's decision to start investments in anced Advantage Fund, for instance,
ees, particularly trade unions, raised the equity and equity-related schemes has seen its assets under manage-
their concerns over meagre returns. was to maximise returns. On the ment (AUM) surge by Rs 5,439 crore,
"Trade unions have raised their con- lower-than-expected returns, Jalan while Tata Balanced Fund's AUM has
cerns on low returns and the issue will said, "It will be inappropriate to assess jumped by Rs 3,600 crore, and L&T
be discussed at the finance audit and return on equity on a monthly basis. India Prudence Fund's by Rs 944
investment committee (FAIC) to be con- These are long-term investments and crore over the past year.
vened shortly," EPFO's central provident we should not assess returns month-
fund commissioner K.K. Jalan said. on-month. We should see the returns "The regular monthly payout op-
in ETFs or equity for a period of not less tions, low volatility and attractive
The CBT, EPFO's apex decision making than five years," he said. returns from these funds have at-
tracted many investors who need a
You don't need a demat account for your mutual funds monthly cash flow," said Anup
Bhaiya, MD and CEO, Money Honey
Dematerialisation is holding financial securities in an electronic form in a demat Financial Services.
account. There are two central depositories in India-Central Depository Ser-
vices (India) Ltd (CDSL) and National Securities Depository Ltd (NSDL)-that is- Investors in the high-tax bracket
sue and maintain all demat accounts. They operate through depository partici- gain as these funds are treated as
pants (DPs), which can be an entity like your bank or broker. While stocks sold equity funds from a taxation perspec-
via exchanges need to be held compulsorily in the demat format, for mutual tive and the debt component auto-
funds (MFs), this is not so. matically becomes tax-free.

BANKING FINANCE | JANUARY | 2016 | 23

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