CPSE ETF (WITH 80CCG BENEFIT)
Invest in CPSE ETF for availing benefit under section 80CCG of Income Tax Act, which is over and above the tax deduction under section 80C.
An opportunity to invest in 10 Maharatnas of Central Government and that too at a discount.
The first Central Public Sector Enterprises – Exchange Traded Fund (CPSE ETF) scheme was launched by Goldman Sachs MF and had a maiden offer in March 2014 that marked overwhelming response. Although this scheme is a MF scheme, it differs from conventional MF schemes as CPSE ETF provides better liquidity, low cost transactions, better yield and a bouquet of safe PSUs.
As the Goldman Sachs AMC was taken over by Reliance Nippon Life Asset Management Company, the second such offer as CPSE ETF FFO (Further Fund Offer) is coming to market from Reliance Mutual Fund. This offer is set to mobilize Rs. 6000 crore (base size is Rs. 4500 crore and green shoe option for Rs. 1500 crore). Out of the total offer, 30 per cent was reserved for Anchor Investors, for whom the offer was open for the day on 17.01.17 and for other categories, the offer opened on 18.01.17 and will close on 20.01.17.
This is being launched at 5% discount and is part of further fund offer (FFO) of the Central Government’s overall disinvestment programme in 10 PSUs. The composition of CPSE ETF as on 31.12.16 was as ONGC (24.35%), Coal India (20.54%), IOC (17.96%), GAIL (11.17%), PFC (5.58%), REC (5.21%), Container Corp (5.04%), BEL (4.33%), Oil India (3.39%) and Engineers India (2.26%). While NFO had a loyalty bonus linked to it(15:1), this time, FFO has upfront discount of 5 per cent across the category and firm allotment for retail investors.
According to a report by ICRA, CPSE ETF has outperformed the Nifty 50 in the last one year. The fund has given a return of 19.5 per cent, while Nifty 50 has surged 5 per cent.
