ETF keeps its asset base intact
View(s):The Employees’ Trust Fund (ETF), a non-contributory benefit scheme where only the employer makes a contribution on behalf of the employee, has made investments in government securities thereby stabilising the money market at 7 per cent interest rate on a government directive, official sources said.
The asset base of the fund is intact as it has invested in Treasury Bonds and Bills only in accordance with the government’s directive issued in March this year, a senior ETF official told the Business Times.
The ETF recorded an improvement in its asset base, the number of members and the total contributions last year, he said adding that there was a slight delay in the process due to a grace period given to employers owing to the COVID-19 crisis.
The total assets of the ETF increased by 10.5 per cent and reached Rs. 343.3 billion at end December 2019, official data indicated.
Its investment improved to Rs. 324.9 billion, which is an increase of 11.6 per cent compared to the year 2018.
Out of these investments 76.9 per cent was invested in government securities in 2019, a marginal increase from the 75.2 per cent recorded in 2018.
The share of investments in fixed deposits has slightly decreased to 17.2 per cent in 2019 compared to 18.3 per cent in 2018.
The existing risk management framework of the investment activities was further strengthened in 2019 with a view of enhancing the accountability and transparency of such activities.
Accordingly, the Investment Policy Statement was revised and updated to be in line with updated market requirements, to improve the existing work procedures.
The aim is to provide greater independence over the investment decision making process while maintaining an adequate level of internal controls, an ETF performance report revealed.
Out of 15.3 million member accounts of the ETF, only 2.6 million accounts were active in 2019. The number of employers contributing to the fund slightly declined to 82,375 at end-December 2019 from 82,416 at end-December 2018.
Total member balance of the ETF increased by 10.5 per cent to reach Rs. 338.6 billion at end-December 2019 compared to Rs. 306.5 billion at end-December 2018.
The total contribution of the ETF increased by 8.7 per cent and reached Rs. 27.5 billion, while total refunds increased by 8.3 per cent and reached Rs. 19.8 billion which resulted in an increase of 9.7 per cent net inflow of funds during the year 2019, official data showed.
(BS)