Reliance Capital was ranked the topmost retirement fund manager overall by the EPFO for providing good returns and investing money in quality assets, while State-run SBI finished at the bottom
ADAG-promoted Reliance Capital Ltd was ranked the topmost retirement fund manager overall by the Employees' Provident Fund Organisation (EPFO) for providing good returns and investing money in quality assets, while State-run State Bank of India (SBI) finished at the bottom.
HSBC Asset Management (India) Pvt Ltd and ICICI Prudential Asset Management Co Ltd, which are the two other retirement fund managers, have been ranked second and third respectively for their performance during the nine-month period ending December 2009, as per EPFO analysis, said a labour ministry source.
The analysis placed before EPFO's key advisory body, the Finance and Investment Committee, last week, pointed out that HSBC AMC churned out the highest yield (return) of 8.43% followed closely by Reliance Capital at 8.41%.
Interestingly, the country's largest public sector lender SBI has been placed at the lowest position on all parameters including yield, maturity profile and asset quality profile.
On the basis of the maturity profile, Reliance Capital AMC continues to perform the best on the said parameter followed by ICICI Pru AMC, HSBC AMC and SBI in that order. On asset quality profile, ICICI Pru AMC is ahead followed by Reliance Capital, HSBC AMC and SBI.
However, among all fund managers appointed in July 2008, ICICI Pru has been ranked first on an overall basis for managing funds since 17 September 2008 till 31 December 2009 followed by HSBC AMC, Reliance Capital and SBI.
A major chunk of EPFO's funds are invested in government schemes and securities having poor yields—less than 8%. Hence, the government brought in four fund managers to churn out better returns.
The EPFO manages PF deposits of over 4.71 crore subscribers with a corpus of around Rs2.57 lakh crore. Its incremental deposits every year are close to Rs25,000 crore.
EPFO is maintaining an interest rate of 8.5% for depositors since 2005-06 because of low return of government securities, schemes and instruments. Before that it was 9.5% for the three consecutive fiscals from 2002-03.
It gave 11% and 11.25% interest on PF deposits in 2000-01 and 2001-02, respectively. It maintained an interest rate as high as 12% for 10 years between 1989-90 and 1999-2000.