Thursday, January 3, 2013

EPF equity portfolio gains Rs. 2.8bn in 2012

The equity portfolio of the Employees’ Provident Fund (EPF) managed by the Central Bank yielded Rs. 2,774 million in 2012, the bank’s governor Ajith Nivard Cabraal said yesterday.

The fund grew 13 percent in 2012 to Rs. 1.15 trillion of which Rs. 301 billion was invested in government securities, "to benefit from high interest rates," Cabraal said.

Despite the controversy the EPF management continues to fuel, Cabraal said dividends and capital gains from investments in the country’s equities market amounted to nearly Rs. 2.8 billion.

He said with government securities yields expected to decline in future, the bank would continue to invest in the stock exchange, private equities and corporate debt.

Interest paid on member balances for 2011 was 11.5 percent, Central Bank data showed.

Cabraal said the EPF would implement innovative fund management strategies to maximise returns further.

"With fiscal consolidation and the expected further decline in inflation, market interest rates are expected to decline in future, thereby providing a challenging environment for the EPF to generate higher returns in the medium to long term," Cabraal said yesterday (02) releasing the ‘ Road Map for Montary and Financial Sector Policies for 2013 and Beyond’.

"The EPF will systematically continue its investment portfolio diversification policy, to provide better returns. Such a strategy would cover: equity investments that would provide long term growth and income; private equity investments that would yield higher long term returns; investments in debt securities such as corporate debentures, trust certificates and commercial paper which would provide higher annual incomes," Cabraal said.

The last published annual report of the EPF was for 2010.

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