I read the CPSE ETF will open up for subscription soon, can someone let me know the issue details and how can I invest?
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The third Further Fund Offer (FFO) of the CPSE Exchange Traded Fund (ETF) open on November 28th and closes on November 30th. The CPSE ETF and Bharath 22 ETFs were created to carry out the govt’s divestment program. Rs 11,500 crores have been raised from the 4 tranches of CPSE ETF so far.
The govt is hoping to raise Rs 8,500 crores from this issue but depending on the response it may raise up to Rs 14,500 crores. A discount of 4.5% is being offered to all investors.
About CPSE ETF
The CPSE ETF tracks the CPSE index and consists of 11 Central Public Sector Enterprises (CPSEs). Here are the constituents and their weightages.
| Company | Sector | Weightage |
|---|---|---|
| NTPC | Power | 19.55% |
| Coal India | Mineral/Mining | 19.13% |
| Indian Oil Corp | Petroleum Products | 18.94% |
| ONGC | Oil | 18.89% |
| REC Ltd | Finance | 6.18% |
| Power Finance Corp | Finance | 5.49% |
| BEL | Capital Goods | 4.94% |
| Oil India Ltd | Oil | 3.45% |
| NBCC | Construction | 1.66% |
| NLC India Ltd | Power | 0.95% |
| SJVN Ltd | Power | 0.64% |
Sectoral composition
| Industry | Weightage |
|---|---|
| Oil | 22.34% |
| Power | 21.14% |
| Minerals/Mining | 19.13% |
| Petroleum Products | 18.94% |
| Finance | 11.67% |
| Capital Goods | 4.94% |
| Construction | 1.66% |
Interestingly the basket of stocks have a combined dividend yield of 5.25% vs 1.27% of Nifty 50.
The ETF has an expense ratio of 0.07%
Here’s how the discount on the ETF is calculated:
How to apply?
We will open up the order collection page starting November 28th here CPSE ETF - Zerodha and you can place order by logging in with your Kite credentials. Units will be credited with 15 working days if you receive an allotment.
You need to have sufficient funds in your trading account in order to apply for this issue.
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So it is like mutual fund or else. is it close ended fund? what will be tax implications and exit load for this scheme can you please through some light
It is an exchange traded fund (ETF). Think of it as a mutual fund which trades on the exchange.
Same as equity.
No exit loads are applicable for ETFs.
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Thank you for replying
Hi,
Are there any charges from Zerodha for applying this ETF ?
Thanks
No charges, Praveen.
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When will this etf will get listed on nse??
Stay away from PSU ETFs guys. The govt plans to take your money to put in the sick companies basically due to poor management. You won’t get that growth in these ETFs. Check the status of Bharat22 ETF since its launch a year back. Better to invest in Nifty50 ETF if you invest in ETF.
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Fully agree…always invest in junior nifty / nifty etf
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Can you please tell which one are junior nifty
Within 15 days of the issue close.
CPSE ETF has been a laggard look at the performance for over last 3year 4.25% without dividend, as it’s only available with “GROWTH” option - Any dividend payed-out is (added) shown in NAV.
Reference for Performance https://www.valueresearchonline.com/funds/fundperformance.asp?schemecode=25711
JUNIORBEES is available as ETF. There are index funds (MF) as well…
Junior bees has dividend distribution tax. Not cool. Index funds are far more better.
Index fund and etf are similar na
no taxes on ETF…negligible STT & transaction cost as
How do I confirm if I have received an allotment? The Kite interface stills hows my funds intact, and does not show any deductions.
If the order is being processed, is there a way to cancel it?
We upload the orders on Nov 30th and the fund will be deducted from your trading account. You’ll receive an email from us with the confirmation.
Will we get allotment today?
Will we get interest on money paid from 30th nov till the day of crediting units to demat?