PF Trust Fund

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Bhavesh Mehta (Querist)
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20 August 2009 The PF Trust Fund has to invest its monies as per certain rules. Can any body please provide the details of the same?
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CA Ravi Kumar Murugesh

CA Ravi Kumar Murugesh (Expert)
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20 August 2009 The government has allowed all non-government provident funds, superannuation funds and gratuity funds to invest in equity markets.
As per the revised guidelines on the investment pattern to be followed, these funds can now invest up to five per cent of their total portfolio in shares of companies that have an investment grade debt rating from at least two credit rating agencies.
These funds have also been permitted to invest in Term Deposit Receipts (TDRs) of the public sector banks up to three years as against the existing limit of less than a year.

The new guidelines further allows these funds to invest in the bonds of the public financial institutions and public sector companies if these are rated as investment grade by two credit rating agencies.

It further allows an investment of up to 10 per cent in the debt instruments bearing investment grade rating and or equity-linked scheme of mutual funds regulated by SEBI. The maximum exposure of any fund to investment in any gilt fund has been restricted to 5 per cent of its portfolio at any point of time.