SBI Mutual Fund introduces two new open-ended schemes which will track the BSE PSU Bank Index in order to give exposure to investors looking at investments in the public sector banking sectors.
New Fund Offer (NFO) for SBI BSE PSU Bank Index Fund and SBI BSE PSU Bank ETF shall be open from March 17 to March 20. Both the funds shall deliver returns analogous to the total returns of the securities represented by the underlying index, subject to the tracking error. However, it is stated that there are no guarantees that the stated investment objective will be attained by SBI Mutual Fund.
Both funds will invest in the securities that are included in the BSE PSU Bank Index, maintaining an allocation of at least 95% up to 100% of their total assets. In order to meet any liquidity requirements they may have, up to 5% of their portfolios may be invested in government securities, tri-party repos, or units of liquid mutual funds.
Minimum investment at the time of NFO is going to be Rs 5000, followed by investments which could be made in multiples of 1 rupee thereafter. Benchmark index for both funds would be the BSE PSU Bank TRI. SBI BSE PSU Bank ETF will be listed on both the exchanges NSE and BSE, allowing investors to trade units on stock exchanges.
Who is the target investor for this product?
These funds will work great for an investor who aims to take exposure to the performance of the PSU banking sector through some structured investment. The funds would have a diversified portfolio from the top public sector banks by following the BSE PSU Bank Index, thus making them an attractive vehicle for anyone interested in the development of this sector.
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