Last Updated on 3 weeks ago by Raj Kumar
What is CPSE ETF – stocks portfolio list – dividend info
CPSE ETF stands for Central Public Sector Enterprises ETF. Ministry of finance on behalf of Govt of India launched CPSE ETF on March 18, 2014. The idea behind launching CPSE ETF was to divest the Govt holding in PSU companies in a strategic way.
CPSE ETF is managed by Nippon India AMC on behalf of the govt ofIndia.
CPSE ETF stocks portfolio list
CPSE ETF stocks portfolio list is as below:-
|Company /stock name||Sector||% of Total Holdings|
|Bharat Electronics Ltd.||Industrial electronics||8.53%|
|Coal India Ltd.||Industrial minerals||16.92%|
|Cochin Shipyard Ltd.||Ship building & allied services||0.84%|
|National Thermal Power Corporation Ltd.||Power||19.61%|
|NBCC (India) Ltd.||Construction civil||1.14%|
|NLC India Ltd.||Power||0.73%|
|NMDC LTD||Industrial minerals||5.70%|
|Oil & Natural Gas Corporation Ltd.||Oil exploration||18.42%|
|Oil India Ltd.||Oil exploration||2.21%|
|Power Grid Corporation of India Ltd.||Power- transmission||20.99%|
What is the selection criteria for CPSE ETF stocks?
According to Nippon India AMC ; The selection criteria for CPSE ETF stocks are as below:-
The CPSE’s selected meet below mentioned parameters:
• Included in the list of CPSEs published by the Department of Public Enterprise
• Stocks traded (listed & traded and not listed but permitted to trade) at National Stock Exchange of India Ltd. (NSE)
• Having more than 51% government holding (stake via Govt. of India or President of India) under promoter category
• Companies having average free float market capitalisation of more than 1000 Cr. for six month period ending December 2019 are selected
• Companies which are IRDA dividend norms compliant shall be considered eligible to be included in the index
CPSE ETF fund offers till 2021
Government of India (GOI) used innovative route to divest its holding in CPSEs via ETF
|CPSE ETF Tranche||Launch||Subscriptions |
|Allotment (Rs. Crs.)||Listing Date|
|New Fund Offer (NFO)||Mar-14||4,363||3,000||04-Apr-14|
|Further Fund Offer (FFO)||Jan-17||13,705||6,000||31-Jan-17|
|Further Fund Offer 2 (FFO 2)||Mar-17||10,083||2,500||28-Mar-17|
|Further Fund Offer 3 (FFO 3)||Nov-18||31,203||17,000||10-Dec-18|
|Further Fund Offer 4 (FFO 4)||Mar-19||30,464||10,000||01-Apr-19|
|Further Fund Offer 5 (FFO 5)||Jul-19||48,485||11,500||29-Jul-19|
|Further Fund Offer 6 (FFO 6)||Jan-20||21,707||16,500||10-Feb-20|
CPSE ETF fund performance
Its quite disappointing to see the kind of performance the CPSE ETF has shown since its launch. Below image shows CPSE ETF’s performance as of October 30th 2020
CPSE ETF has clearly underperformed compared to all of the major indices. Its really sad to see the CPSE ETF didn’t even give any returns to the investors since its launch in March 2014!
CPSE ETF Dividend details
There is a lot of confusion in investors mind about whether the CPSE ETF gives any dividend to its investors when a company which is part of CPSE ETF gives dividend. The short answer to this is – NO. The CPSE ETF doesn’t give any dividend to its investor when the company which is part of CPSE ETF gives dividend.
The dividend amount is reflected as part of the ETF NAV when dividend amount is received.
Benefits of CPSE ETF
According to Nippon India AMC here the benefits of CPSE ETF
▶ Well Defined Portfolio: CPSE ETF investment strategy & stock selection is clearly defined; it would replicate the Nifty CPSE Index & invest only in companies forming the index in the same proportion as the underlying index
▶ Diversification: Buying a single unit currently offers diversification of 12 stocks in the large CPSE companies
▶ Transparency: Nifty CPSE Index constituents are made available in public domain on a daily basis by NSE
▶ Liquidity: ETF units are traded on exchanges & can be easily liquidated during trading hours (subject to availability of buyer/Seller). Authorised Participants / Large Investors also have the option of coming to the AMC for procurement/sale of units in creation unit sizes (100,000 units with 1 unit equivalent to 1/100th of Nifty CPSE Index)
▶ Margin for trading: CPSE ETF is accepted as margin for trading on NSE & BSE with applicable haircut
▶ Sector Exposure with less Idiosyncratic risk: CPSE ETF allows one to take exposure to the large Central Public Sector Enterprise (CPSE) companies across different sectors with relatively less stock specific risk, as risk gets diversified among basket of stocks
▶ Index track Record: Launched in Mar-2014, base date 1-Jan-2009 the index has a track record of 11 years
What is the expense ratio for CPSE ETF?
The current expense ratio for CPSE ETF is 0.01% which is extremely less compared to actively managed mutual funds.
Where can I purchase CPSE ETF?
CPSE ETF can be purchased in NSE or BSE. You need to have a demat and trading account to purchase CPSE ETF.
What is the difference between NIFTY 50 ETF and CPSE ETF?
NIFTY 50 ETFs are based on the stocks which are part of NIFTY 50 index where as CPSE ETF is an ETF which consists of 12 CPSE companies.
Is it good to invest in CPSE ETF?
Going by the performance of CPSE ETF in last 7 years; it’s quite disappointing to see that the CPSE ETF hasn’t even given any returns to its investors since 7 years. Most of the companies which are part of CPSE ETF are cyclical companies. They perform really well in cycles. If you are retail investor then there are better opportunities in NIFTY 50 ETF than CPSE ETF.