SBI Mutual Fund Launches Two New PSU Bank-Specific Schemes For Investors
SBI Mutual Fund has launched two new investment schemes, the SBI BSE PSU Bank Index Fund and SBI BSE PSU Bank ETF, with the aim of providing investors with exposure to India’s public sector banking sector. The schemes are to be benchmarked against the BSE PSU Bank Index, allowing investors to invest in PSU banks in a disciplined fashion without picking individual shares.
The New Fund Offer (NFO) of the schemes will open on March 17, 2025, and will close on March 20, 2025.
The SBI BSE PSU Bank Index Fund is an open-end index scheme, while the SBI BSE PSU Bank ETF is an exchange-traded scheme that would be listed on the NSE and BSE. These schemes will invest not less than 95% of their net worth in the securities that make up the BSE PSU Bank Index, such that investments in these securities closely track the index. The remaining 5% of assets would be invested in government securities, triparty repos, and liquid mutual funds in the interest of liquidity. Both the schemes take the BSE PSU Bank TRI as the benchmark.
During the NFO period, the minimum investment is Rs.5,000 with additional investment allowed in multiples of Rs. 1. The money is invested for diversification to capitalize on the growth opportunities of PSU banks.
The public sector banking industry has been experiencing strong credit growth along with better asset quality, as driven by government reforms and fiscal measures aimed at strengthening the sector.
While these schemes provide investors with a structured way to gain exposure in PSU banks, there are risks involved. Misalignments with index performance may arise through tracking errors, and volatility in the banking sector may impact overall returns. Keeping in mind these risks, the schemes also provide investors with the opportunity to diversify their investments by using PSU bank stocks while having the benefit of financial stability assurances from the government.
