Is it true that the provident fund has sold its equity holdings to pay interest?
Answer
Answer
That is part of the portfolio churn by the EPFO. In fact, the Employees Provident Fund Organisation (EPFO) sold Rs.12,785 crore of equity ETF investments and earned capital gains of Rs.5,529 crore. These gains will be used to pay FY22 EPF interest. EPFO sold the equity outlays made in 2017.
The current norm is that EPFO invests 85% of annual accruals in debt and 15% in equity ETFs. This is the 4th equity ETF redemption by EPFO since they started investing in euqities. Capital gains were lower than originally anticipated.