The stock market slide is a warning to managers of retirement savings that investing in stocks is no short cut to decent returns. Its investment in stocks had brought the Employees' Provident Fund (EPF) much higher rates of return, as compared to investments in government and private debt, whetting an appetite for ever-larger allocation of funds to stocks, right now capped at 15%. But with the equities market on the slide Sensex closed 561 points lower on Tuesday the EPFO reportedly wants to .. play safe, and park more money in safe harbour government bonds. Scurrying to safety is not an ideal response. Alarge corpus of over Rs 10 lakh crore allows the EPF to diversify its portfolio beyond traded stocks and bonds. It should consider private equity and real estate as well. Ditto for the National Pension System (NPS), open to civil servants who joined service from January 2004, and now to voluntary subscribers.
The real debate should be on whether EPF and NPS should under ..
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From India, Varanasi