1. Goldman Sachs launches CENTRAL PUBLIC SECTOR ENTERPRISES ETF ( CPSE ETF ) at 18 March 2014 and NFO closes at 21 March 2014.
2. Goldman Sachs central public sector enterprises ETF ( CPSE ETF ) is based on CPSE index which contains India largest 10 public sector companies.
3. Before we continue here are the detail constitution of CPSE index
Coal india 17.75%
Reral electrification corporation ltd 7.16%
Oil india ltd 7.04 %
Indian oil corporation ltd 6.82 %
Power finance corporation ltd 6.49%
Container corporation of india ltd 6.40%
Bharat electronics ltd 2%
Engeniers india ltd 1.13%
4. Government plan to rise 3000 crore from this ETF this is a new style of disinvestment because in currant scenario of Indian political corruption no one like to buy a stake in public sector companies.
5. For attracting funds govt declare 5 % flat discount for all investors it means unit allocated you at discount of 5% from reference market price of underlying CPSE index.
6. Other new concept is loyalty bonus which is a new concept for Indian markets in loyalty bonus if you hold this ETF units from allocation date to one year then government may give 1 extra loyalty bonus unit for every 15 units held.
7. Currant dividend yeild for CPSE indiex is near 3.77%
8. So if we invest in this ETF we get
5 % immidiate discount
3.77 % dividend yeild
6.67 % loyalty bonus
That’s great because generally I do not sell stocks below 1 year so if we hold it and sell after getting loyalty bonus of 6.67% then we may get income tax free return ( capital gain tax after one year holding is nil )
9. Generally I do not like public sector companies but my view is positive for this CPSE ETF because it may be diversified my portfolio in navaratna nad miniratna govt companies because my currant holding in govt companies is nil and if any nationalist party win this election and if our economy feel good after a new nationalist govt then returns in this fund are unbelievable.
Sunday, March 16, 2014
CENTRAL PUBLIC SECTOR ENTERPRISES ETF ( CPSE ETF ) REVIEW
- ▼ March (2)