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Two years after it launched a successful CPSE exchange traded fund (ETF), the Centre has now set its sights on creation of yet another ETF — primarily based on listed central public sector enterprise (CPSE) shares.
The Department of Investment and Public Asset Management (DIPAM) has invited expression of interest for being appointed “advisor” to the government for the entire process.
Merchant bankers, investment bankers, consulting firms, financial institutions and asset management companies can submit their bids by July 11, either singly or as a consortium, it said.
ETFs are innovative products that provide exposure to an index or a basket of securities that trade on the exchange like a single stock. These are basically an innovation to traditional mutual funds.
In recent years, ETFs, which offer flexibility of a stock and protection of a fund, have been a big draw among retail investors. This is more so after retail investors understood the primary benefits of diversification, risk control and lower transaction costs provided by ETF.
An equity ETF invests in stocks that comprise an index. The CPSE ETF – launched in 2014 — mirrored the returns of the NSE’s CPSE index. It held exactly the same stocks that make up the CPSE index and in the same proportions.
Koel Ghosh, Director — Business Development, South Asia, S&P Dow Jones Indices, told BusinessLine : “It would be a great platform to work with the government and showcase the breadth and depth of our capabilities.”
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