Investments by the Employees' Provident Fund Organisation (EPFO) are not backed by any government guarantees as these are subject to market movements, parliament was informed on Wednesday.
"The government has not provided any guarantee for such investments in the stock market, as investment in such instruments are subject to market movements," Labour Minister Bandaru Dattatreya told the Rajya Sabha in a written reply.
"Some of the trade unions have expressed reservations over the decision to invest in equity as they are concerned about the risk associated with the investments in stock market," he said.
The minister also said that the EPFO's Central Board of Trustees has approved the proposal for investing in Exchange Traded Funds (ETFs) "after considering the possible risk associated with the investments".
EPFO started investing in ETFs from August this year, and the retirement fund organisation plans to invest 5 percent of its incremental deposits into ETFs during the current fiscal.
