How good is the investment in CPSE ETF?

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How good is the investment in CPSE ETF?
CPSE ETF launched to mop up funds from the public and promote investor's stake in public sector undertakings has listed on the bourses today. Goldman Sachs- managed CPSE ETF, tracking the CPSE index, now available for trading on the exchange opened the day with gains on the NSE at a issue price of Rs. 17.45 and was seen trading with gains of 10.89% at Rs. 19.35 at 3:20 pm.

In today's trade, the CPSE ETF on the National Stock Exchange has reached a high of 19.43.

So, how good is the investment in CPSE-ETF?

Before, knowing how good is the CPSE-ETF investment, look what the new investment basket offers. The CPSE-ETF issue opened to the public through a NFO garnered huge flavour and succeeding in mobilizing a total of approximately Rs. 4,300 crores. The benefits provided during the new fund offer, including the bonus in the ratio of 1:15 over a one year term and a 5% discount offer, provided momentum and fetched a whopping amount.

But, as now even through the bourses, you can put your bet on CPSE-ETF, how good shall be the bet is the question?

As the CPSE-ETF no longer offers the advantages available during the NFO, investors who now park their funds would surely be at loss in comparison. Moreover, the price of the ETF has risen relatively. Also, the investment in the ETF is perhaps a plunge in the stocks which has government as a promoter.

More so, investment in CPSE-ETF is an investment in a thematic fund. Know about how risky are the thematic funds and what returns they can fetch.

Nonetheless, seeing the huge response that the CPSE-ETF resulted in, government may come with new ETFs in coming times.

GoodReturns.in

Story first published: Friday, April 4, 2014, 16:25 [IST]
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