What is CPSE ETF – 12 stocks portfolio list – dividend info

CPSE ETF - Stock price, Portfolio details, Dividend pay, Share price history | CPSE ETF Full form | Should you invest in CPSE ETF?

This post was most recently updated on December 23rd, 2022

CPSE ETF (Central Public Sector Enterprises Exchange Traded Fund) is an exchange-traded fund (ETF) managed by the Government of India, which invests in a diversified portfolio of stocks of central public sector enterprises (CPSEs) in India. The CPSE ETF is designed to provide investors with an opportunity to invest in public sector companies in India, and it is considered a relatively safe and stable investment option.

The CPSE ETF is listed on the stock exchange and can be bought and sold like any other stock. It is a passive investment vehicle, meaning that it tracks the performance of the underlying CPSE index rather than being actively managed.

CPSE ETF is managed by Nippon India AMC on behalf of the govt of India.

CPSE ETF
CPSE ETF

CPSE ETF stocks portfolio composition list

CPSE ETF stocks portfolio composition list is as below:

Company /stock nameSector% of Total Holdings
 Bharat Electronics Ltd.Industrial Electronics8.53%
 Coal India Ltd.Industrial minerals16.92%
 Cochin Shipyard Ltd.Shipbuilding & allied services0.84%
 National Thermal Power Corporation Ltd.Power19.61%
 NBCC (India) Ltd.Construction civil1.14%
 NHPC Ltd.Power3.46%
 NLC India Ltd.Power0.73%
 NMDC LTDIndustrial minerals5.70%
 Oil & Natural Gas Corporation Ltd.Oil exploration18.42%
 Oil India Ltd.Oil exploration2.21%
 Power Grid Corporation of India Ltd.Power- transmission20.99%
 SJVN Ltd.Power0.80%
CPSE ETF stocks portfolio composition list

What are the selection criteria for CPSE ETF stocks?

According to Nippon India AMC ; The selection criteria for CPSE ETF stocks are as below:-

Selection Criteria

The CPSEs 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 the National Stock Exchange of India Ltd. (NSE)

• Having more than 51% government holding (stake via Govt. of India or president of India) under the promoter category

• Companies having an average free-float market capitalization of more than 1000 Cr. for six month period ending December 2019 are selected

• Companies that are IRDA dividend norms complaint shall be considered eligible to be included in the index

CPSE ETF fund offers till 2022

The government of India (GOI) used an innovative route to divest its holding in CPSEs via ETF

CPSE ETF 
Tranche
LaunchSubscriptions 
(Rs. Crs.)
Allotment 
(Rs. Crs.)
Listing Date
New Fund Offer (NFO)Mar-144,3633,00004-Apr-14
Further Fund Offer (FFO)Jan-1713,7056,00031-Jan-17
Further Fund Offer 2 (FFO 2)Mar-1710,0832,50028-Mar-17
Further Fund Offer 3 (FFO 3)Nov-1831,20317,00010-Dec-18
Further Fund Offer 4 (FFO 4)Mar-1930,46410,00001-Apr-19
Further Fund Offer 5 (FFO 5)Jul-1948,48511,50029-Jul-19
Further Fund Offer 6 (FFO 6)Jan-2021,70716,50010-Feb-20
CPSE ETF fund offers

CPSE ETF Share price history

The below chart shows CPSE ETF Share price history over the years. The ETF hasn’t given any meaningful returns over the last 8 years!

CPSE ETF Share price history
CPSE ETF Share price history

CPSE ETF fund performance

It’s quite disappointing to see the kind of performance the CPSE ETF has shown since its launch. The below image shows CPSE ETF’s performance as of 30th September 2022.

CPSE ETF fund performance
CPSE ETF fund performance

CPSE ETF has clearly underperformed compared to all of the major indices. It’s really sad to see the CPSE ETF giving negligible returns to investors since its launch in March 2014!

CPSE ETF Dividend details

There is a lot of confusion in investors’ minds about whether the CPSE ETF gives any dividends to its investors when a company that is part of the CPSE ETF gives dividends. The short answer to this is – NO. The CPSE ETF doesn’t give any dividends to its investor when the company which is part of the CPSE ETF gives dividends.

The dividend amount is reflected as part of the ETF NAV when the dividend amount is received.

Consider reading – Best dividend paying stocks in India

Benefits of CPSE ETF

According to Nippon India AMC here are 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 a diversification of 12 stocks in the large CPSE companies
  • Transparency: Nifty CPSE Index constituents are made available in the public domain on a daily basis by NSE
  • Liquidity: ETF units are traded on exchanges & can be easily liquidated during trading hours (subject to the availability of the buyer/Seller). Authorized 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)
  • The margin for trading: CPSE ETF is accepted as margin for trading on NSE & BSE with the 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 the basket of stocks
  • Index track Record: Launched in Mar-2014, base date 1-Jan-2009 the index has a track record of 11 years

FAQs on CPSE ETF

  1. 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.

  2. 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.

  3. What is the difference between NIFTY 50 ETF and CPSE ETF?

    NIFTY 50 ETFs are based on the stocks which are part of the NIFTY 50 index whereas CPSE ETF is an ETF that consists of 12 CPSE companies.

  4. Is it good to invest in CPSE ETF?

    Going by the performance of CPSE ETF in the last 7 years; it's quite disappointing to see that the CPSE ETF hasn't even given any returns to its investors for 7 years. Most of the companies which are part of CPSE ETF are cyclical companies. They perform really well in cycles. If you are a retail investor then there are better opportunities in NIFTY 50 ETF than in CPSE ETF.

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