What is CPSE ETF?
Central
public sector enterprise are those companies in which the direct holding of the
central government is 51% or more
How many CPSE ETF issue came till
date?
Total
issue came 5
March
2014 4363 cr
Jan
17. 6000 cr
March
17. 2500 cr
Nov
18. 17000 cr
March
19. 3500 cr
Which stock are in CPSE index.
ONGC
20.43%
NTPC
19.54%
Coal
India 19.09%
IOC
18.64%
REC. 6.72%
PFC.
5.49%
Bharat
electronics. 4.94%
Oil India. 2.84%
NBCC. 1.84%
NLC. 0.86%
Sector
includes.....
Energy
Oil
PSU
Infra
and engineering and
PSU
financial
Four reason why CPSE unit gain
popularity.....
Better liquidity.....
As
low rate unit provide everyone to participate in trading as well as investment.
So, flow of demand and supply comes excellent huge in number.
Low cost transaction.....
As
there is no hidden cost or any kind of entry or exit load like mutual fund is,
so cost of transaction is same like stock everyone trade.
Better yield.....
It
has given positive return since its inception from 2014. It run from 17.4 to 27
in 2014-19 period.
Basket of safe PSUs.....
It
gives indirect exposure of 10-12 PSUs of government where in few generate
profit and few in loss. Moreover dividend payment of such company is highest
compare to every other listed company.
CPSE ETF came in following manner .....
CPSE
NFO 18/3/2014 came at 17.45 with 5% discount after completion of 1 year
Second
came at 25.21 with upfront discount of 5% Jan 2017
Third
came at 3.5 % front discount on
march 17 @ 26.85
Fourth
4.5 % up front discount on Nov 18
around 25
Last
at 25.4840 with 4% discount on march 2019
The
initial offering came with promise of holding ETF at least for 1 year to get 5%
discount while this time discount is up fronted , so medium to short term view
you should take as most of investor do for benefit of discount
Why nifty ETF got popularity much.....
Nifty
ETF turned largest due to employee provident fund organization invest only in
that fund as low cost mechanism
Because
It is investing in large cap stocks nifty is reflecting same through ETF.
Moreover
investor should invest with short to medium term view. Even upfront discount is
net gain for investor if we assume market remain stable.
Is ETF pay dividend?
Most
of company included in CPSE ETF Is known for dividend paying company where few
company pay 8-9% yield based on its current market price.
There
are two ways to pay dividend.....
First,
company or fund management declare
advance date for dividend like record date which can be 30-60 days' advance
to the actual dividend payment date.
Second,
fund manager buys additional amount of
unit and distribute proportion wise to everyone as dividend.
Even
dividend is actually net zero sum game
for investor as on ex date of dividend stock
price reduce by amount of dividend declare.
Conclusion:
Subscribed
ETF if there is upfront discount of more
than 3%
Look
at market condition like it has
reach at such level where margin of safety is not favorable
Look
at the price of all included stock in the ETF fund, this days almost all stock middle to low price.
Moreover
and most important need the stable
government to decide the future of all PSU company for divestment smoothly.
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