Do read Post by Kabir on 18th Jan forimportant positive aspect & also post by Sonam ,pointing out negative aspect of this ETF.
Solid Response from Angel investors :
The further fund offer (FFO) of CPSE (Central Public Sector Enterprises) ETF (exchange traded fund), has been oversubscribed four times by anchor investors when the issue opened for subscription for them on Tuesday. Anchor investors put in Rs 6,000 crore against Rs 1,500 crore reserved for them in CPSE ETF
Grey market Premium : on 18 Jan 2017 at 11.00 am, Rs. 3500 for Rs. 2 lac form
The government is all set to raise up to Rs6,000 crores from sale of the second tranche of central public sector enterprise (CPSE) exchange traded fund (ETF), to be launched on 17 January.This further fund offer (FFO) is part of the government’s overall disinvestment programme.
Opens on 17 January 2017
Closes on : 20th January 2017
Issue size of the fund will be Rs 4,500 crores, with the option of raising another Rs1,500 crores,
How much one can invest ?
Individual investors can invest a minimum of Rs5,000 in the CPSE ETF, while the maximum is Rs10 lakh. Non-institutional investors and qualified institutional buyers can invest a minimum amount of Rs10 lakh.
The further fund offer is open for all category of investors, including anchor, retail, retirement funds, QIBs, non-institutional investors and foreign portfolio investors (FPIs). An upfront discount of 5 per cent is being offered to all category of investors.
ETF is a good instrument to diversify risk yet it does not have reach because small investors do not understand the concept.
The CPSE ETF ( first Tranche) was launched by Goldman Sachs Asset Management India on 18 March 2014, and comprises 10 firms: Oil and Natural Gas Corp. Ltd, GAIL (India) Ltd, Coal India Ltd, Rural Electrification Corp. Ltd, Oil India Ltd, Indian Oil Corp. Ltd, Power Finance Corp. Ltd, Container Corp. of India Ltd, Bharat Electronics Ltd and Engineers India Ltd.Currently, Reliance Mutual Fund manages the CPSE ETF;II after Goldman Sachs exited the mutual fund business in India.
Central Public Sector Enterprises Exchange ETF, which functions like a mutual fund scheme, comprises the scrips of 10 PSUs — ONGC, Coal India, IOC, GAIL (India), Oil India, PFC, Bharat Electronics, REC, Engineers India and Container Corporation of India.
Expense Ratio:CPSE ETF has an expense ratio of 6.5 bps, which is much lower than the other non-ETF that have an expense as high as up to 200 bps.
How CPSE -I has fared ?
First tranche of CPSE which was launched in March 2014 is now quoted at Rs.26.59 ( as on 11.01.2016)
Considering portfolio of second Tranche, it is also expected to give impressive returns in the long term.
Forum is open for discussion.