Goldman Sachs’ CPSE ETF joins bull party

Suresh P Iyengar Mumbai | Updated on May 27, 2014

Investors in the Goldman Sachs Asset Management Co’s Central Public Sector Enterprise Exchange Traded Fund have gained around 48 per cent in less than two months.

The Goldman Sach Mutual Fund CPSE ETF hit a 52-week high of ₹27.10 on Monday before closing at ₹26.69 on profit-booking. On Tuesday, it dropped 0.92 per cent to close at ₹24.84. The ETF has beaten the BSE PSU index, which gained 15 per cent between April 4 and May 26. The fund has been trading with ample liquidity on both the BSE and the NSE.

In a first of its kind, the Government offloaded its stake in 10 public sector companies to offer them as ETFs. It received overwhelming response collecting ₹4,400 crore against the targeted ₹3,000 crore. Goldman Sachs allotted units at ₹17.45 each and it was listed on April 4.

Paras Bothra, Vice-President (Equity), Ashika Stock Broking, said there is more steam left in this ETF, as some of the public sector companies in this fund have a monopoly in their area of operations. He added that the inefficiency that has crept into the functioning of most public sector companies would be dealt with by the new Government.

Companies such as BHEL, Container Corporation, MOIL and NMDC may do well with the expected economic recovery and their scope for expansion.

The CPSE ETF is a passively managed scheme that invests its entire corpus in all the 10-scrips and in the same proportion as they are represented in its benchmark index, CPSE index.

To make the offering more attractive, the Government promised to offer a 5 per cent discount to all investors who had invested during the new fund offer (March 18-21), and hold their investment for a year.

Published on May 27, 2014

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