Hi there, Welcome to ETMarkets special podcast. I am Tanisha Sharma and I will be talking about a brand new investment option for you.
The government will sell the sixth tranche of the CPSE ETF this week, aiming to raise around Rs 10,000 crore. The non-retail portion will be sold on July 18 and the retail portion the very next day.
For the uninitiated, an ETF or exchange-traded fund is a mutual fund, but it behaves more like a stock than a fund. It tracks an index and is traded on stock exchanges. It means when you invest in it, you actually buy shares or units of an ETF.
The CPSE ETF invests in a portfolio of 11 top-rung PSUs --- ONGC, NTPC, Coal India, IOC, REC, PFC, Bharat Electronics, Oil India, NBCC India, NLC India and SJVN. Five tranches of the ETF have been sold so far, whereby the government offloaded portions of its own holdings.
But weak macro-economic fundamentals, a proposal to increase public float of listed companies and the overall depressed sentiment of the market put a large question mark on the timing and suitability of this product at this juncture.
So will you be investing in this round of the CPSE ETF? Or rather, should you ?
We caught up with Vishal Jain, the man who manages the money at CPSE ETF as Head of ETFs of Reliance Mutual Fund.
Hello Sir, a warm welcome to the show
>>Analyst outlook for PSU stocks is not very strong in the medium and long term. What’s your brief to potential investors of the CPSE ETF?
>>The announcement for raising public float and the entire disinvestment policy are big overhangs over the PSU pack. Isn’t it
>>How has been the performance of the CPSE ETF vis-a-vis the equity benchmarks in recent times? >>ETFs are relatively new for Indian investors. Can you tell us the distinctive advantages that an ETF offers vis-a-vis any other mutual fund? >>Lastly, what’s your general outlook for Indian equities as an asset class for this year?
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