If you are bullish on government-owned companies, and want to have an exposure to them, the Central Public Sector Enterprises (CPSE) Exchange-Traded Fund (ETF) will be a nice way of doing so.
The government has given its go-ahead to the CPSE ETF comprising stocks of 11 large government-owned companies with a view to expedite disinvestment in these companies. The government is looking to collect Rs 3,000 crore through this ETF in the ongoing financial year.
Companies such as Oil and Natural Gas Corp , Coal India, GAIL (India), Power Grid Corporation of India , Rural Electrification Corporation, Oil India, Container Corporation of India, Power Finance Corporation, Indian Oil Corporation, Engineers India and McNally Bharat Engineering are likely to be part the ETF. The ETF will be launched in February. Goldman Sachs Mutual Fund is acting as the fund manager.
The composition of the ETF and weight of the shares of individual PSU in the index have been decided by the government. ONGC would have the highest weight of 25%, while Coal India would have a weight of 17.21% in the proposed ETF.
Vineet Arora, head, product and distribution, ICICI Securities, says, "The ETF will offer diversification by virtue of investment across different sectors. One can also expect good dividend during the period."