CPSE ETF only for high risk takers
CPSE ETF only for high risk takers
Goldman Sachs Mutual Fund - Central Public Sector Enterprises (CPSE) exchange-traded fund (ETF) listed last week.
On the first day of trade, the fund rose 10.88% against its issue price (Rs 17.45). According to data from the National Stock Exchange's (NSE) website, CPSE ETF units' closing price on April 4 was Rs 19.35.
On April 7, it opened higher at Rs 19.45 and closed at Rs 19.36. And on April 9 it opened at Rs 19.40 and closed at Rs 19.69. Thus, returning close to 13% (against the issue price) in less than a week.Goldman Sachs Mutual Fund - Central Public Sector Enterprises (CPSE) exchange-traded fund (ETF) listed last week. On the first day of trade, the fund rose 10.88% against its issue price (Rs 17.45). According to data from the National Stock Exchange's (NSE) website, CPSE ETF units' closing price on April 4 was Rs 19.35.
The CPSE ETF basket consists of shares of ten big public sector units (PSUs) --- Oil & Natural Gas Corp (ONGC), GAIL India, Coal India, Indian Oil, Oil India, Power Finance Corporation (PFC), Rural Electrification Corpoartion (REC), Container Corp, Engineers India and Bharat Electronics.
This is a great way to add some PSU flavour to your portfolio if you don't have any. "It's a good idea to invest in CPSE ETF even now. It has good PSU stocks. If there is a stable government at the Centre, then there will be good appreciation in these stocks. Plus, PSU stocks give high dividend yield," says certified financial planner Pankaj Mathpal. He adds that the stocks included in CPSE have price-to-earning (PE) ratios lower than the markets'.
However, some others beg to differ. Reason: The index has higher exposure to only ten stocks and few sectors --- oil & gas and energy. This makes it a concentrated index. Gas explorer ONGC has the maximum weightage of 27.6% in the index, followed by another energy company GAIL India. Nearly 60% of the index comprises of energy companies.
"The portfolio is highly skewed towards energy, oil & gas sectors --- stocks that the Government wants to divest --- making CPSE ETF a risky bet for retail customers. Most won't understand the dynamics of how these sectors function and hence will never be able to understand take advantage of it," says a chief investment officer of a mutual fund house. Despite being inexpensive, these stocks can prive to be volatile because they are policy-heavy and cyclical stocks.
A diversified index would be ideal to invest for individuals. As per mutual fund rating agency Value Research, equity diversified funds have returned 24% in the last one year (as on April 9). The CPSE ETF does not have anyrepresentation from defensives.
And now even the 5% discount to the market price won't be available for retail investors.
As compared to the NFO period (March 18-21), the units are expensive now. If you didn't buy the units less than a month back, there is no reason for you to buy them now, say experts, because there has been no change in the markets.
Business Standard
Thanking you
Regards,
Rajesh Kumar Kathpalia ¤ SMC Global
17,Netaji Subhash Marg,Daryaganj,
New Delhi-110002 Mobile No 9891645052
Email Id: rajesh.ipo@smcindiaonline.com
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Goldman Sachs Mutual Fund - Central Public Sector Enterprises (CPSE) exchange-traded fund (ETF) listed last week.
On the first day of trade, the fund rose 10.88% against its issue price (Rs 17.45). According to data from the National Stock Exchange's (NSE) website, CPSE ETF units' closing price on April 4 was Rs 19.35.
On April 7, it opened higher at Rs 19.45 and closed at Rs 19.36. And on April 9 it opened at Rs 19.40 and closed at Rs 19.69. Thus, returning close to 13% (against the issue price) in less than a week.Goldman Sachs Mutual Fund - Central Public Sector Enterprises (CPSE) exchange-traded fund (ETF) listed last week. On the first day of trade, the fund rose 10.88% against its issue price (Rs 17.45). According to data from the National Stock Exchange's (NSE) website, CPSE ETF units' closing price on April 4 was Rs 19.35.
The CPSE ETF basket consists of shares of ten big public sector units (PSUs) --- Oil & Natural Gas Corp (ONGC), GAIL India, Coal India, Indian Oil, Oil India, Power Finance Corporation (PFC), Rural Electrification Corpoartion (REC), Container Corp, Engineers India and Bharat Electronics.
This is a great way to add some PSU flavour to your portfolio if you don't have any. "It's a good idea to invest in CPSE ETF even now. It has good PSU stocks. If there is a stable government at the Centre, then there will be good appreciation in these stocks. Plus, PSU stocks give high dividend yield," says certified financial planner Pankaj Mathpal. He adds that the stocks included in CPSE have price-to-earning (PE) ratios lower than the markets'.
However, some others beg to differ. Reason: The index has higher exposure to only ten stocks and few sectors --- oil & gas and energy. This makes it a concentrated index. Gas explorer ONGC has the maximum weightage of 27.6% in the index, followed by another energy company GAIL India. Nearly 60% of the index comprises of energy companies.
"The portfolio is highly skewed towards energy, oil & gas sectors --- stocks that the Government wants to divest --- making CPSE ETF a risky bet for retail customers. Most won't understand the dynamics of how these sectors function and hence will never be able to understand take advantage of it," says a chief investment officer of a mutual fund house. Despite being inexpensive, these stocks can prive to be volatile because they are policy-heavy and cyclical stocks.
A diversified index would be ideal to invest for individuals. As per mutual fund rating agency Value Research, equity diversified funds have returned 24% in the last one year (as on April 9). The CPSE ETF does not have anyrepresentation from defensives.
And now even the 5% discount to the market price won't be available for retail investors.
As compared to the NFO period (March 18-21), the units are expensive now. If you didn't buy the units less than a month back, there is no reason for you to buy them now, say experts, because there has been no change in the markets.
Business Standard
Thanking you
Regards,
Rajesh Kumar Kathpalia ¤ SMC Global
17,Netaji Subhash Marg,Daryaganj,
New Delhi-110002 Mobile No 9891645052
Email Id: rajesh.ipo@smcindiaonline.com
--
You received this message because you are subscribed to the Google Groups "Product Updates for AMC" group.
To unsubscribe from this group and stop receiving emails from it, send an email to Productupdatesforamc+unsubscribe@googlegroups.com.
For more options, visit https://groups.google.com/d/optout.
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