NFO Alert: SBI Mutual Fund Brings SBI BSE PSU Bank Index Fund, SBI BSE PSU Bank ETF, All You Need To Know

NFO Alert: SBI Mutual Fund has brought two new open ended schemes for stock market investors who are looking to invest in public sector banks. The new fund offer (NFO) for SBI BSE PSU Bank Index Fund and SBI BSE PSU Bank ETF will be open till March 20, Thursday.

The two SBI Mutual Fund NFOs opened on Monday. They will track BSE PSU Bank Index, helping investors in providing exposure to leading public sector banks.
BSE PSU Bank Index is a part of larger BSE 500 index, which primarily is a reflection of how the top public sector lenders are performing on the stock market.

Despite market correction, S&P BSE PSU Index has grown up to 2.83% in last one month. However, the index's value has declined over 10.38% year to date. If you are willing to add PSU stocks in your portfolio or are planning to increase their presence in your portfolio with SBI Mutual Fund's new NFOs, here are all the details you need to know about them.

What is SBI BSE PSU Bank Index Fund?

SBI BSE PSU Bank Index Fund is an open-ended scheme which will help investors track the growth of BSE PSU Bank Index. Opened on 17 March, Monday, the NFO will be available till 20 March, 2025. People can invest in this scheme under regular and direct plans. They can start investment in this scheme with a minimum amount of Rs 5,000. The fund is managed by Viral Chhadva.

Investment in this index fund will allow passive investors to replicate the growth of public sector bank stocks and get its benefit on their own portfolio. However, the index fund may not completely track the BSE PSU Index as there might be chances of tracking errors.

What is SBI BSE PSU Bank ETF?

The SBI BSE PSU Bank ETF is an exchange traded fund and it will be listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). Hence, it would be easier to trade ETF units on NSE and BSE. The release of two options offers diverse pathways to investors to put their money into public sector bank stocks. t

Who should invest in SBI BSE PSU Bank Index Fund, SBI BSE PSU Bank ETF?

Investors looking to appreciate wealth on long term by tracking the market growth can consider investment in this index fund. However, investment in this fund may not help investors beat the stock market performance.

The two SBI Mutual Fund NFOs will invest maximum amount of their portfolio (ie 95%) in securities that are part of the BSE PSU Bank Index. Rest of the 5% securities will be diverted for investment to other instruments like government securities, triparty repos, etc.

Public sector banks have showcased a strong performance over the past few months as many of them witnessed a significant surge in their profits. Several banks have also showcased a massive improvement in their non performing assets (NPAs) and increment in government backed initiatives.

Investors who want to invest in banking sector stocks whole mitigating the market risk can consider investing in these SBI Mutual Fund NFOs to get the direct benefit of BSE PSU Index. In most of the cases, index funds charge lower maintenance fees compared to other mutual funds schemes.