Reliance CPSE ETF's second FFO gets subscribed 3.7 times
CPSE ETF - Further Fund Offer 2 (FFO 2), managed by Reliance Mutual Fund got subscribed over 3.7 times on the last day.
Second FFO received Rs 9,200 crore in subscription as against issue size of Rs 2500 crore. Over 1.2 lakh retail applications received for subscription. Institutional portion was oversubscribed 7.6 times while retail portion was subscribed two times.
This is the third tranche on offer through which the government aims to garner Rs2,500 crore. Prior to this, through two tranches the government raised Rs 3000 crore in March 2014 and Rs 6000 crore in January 2017 respectively.
"This clearly shows the future potential of fund raising through ETFs" said Sundeep Sikka, CEO, Reliance Mutual Fund.
CPSE ETF, comprises scrips of 10 PSUs namely ONGC, Coal India, IOC, GAIL (India), Oil India, PFC, Bharat Electronics, REC, Engineers India and Container Corporation of India. Retail investors can invest with a minimum of Rs 5,000.
The government has lowered the upfront discount to 3.5% in this tranche, and this will be offered to all category of investors. The earlier two series offered a 5% discount to retail investors. The second tranche of the CPSE ETF launched in January 2017, which was oversubscribed by 3 times.
ETFs are passively managed and primarily score over actively managed funds due to their low expense ratio. They carry higher risk than diversified equity funds as they have a concentrated portfolio of 10 stocks. Over the last one year, the CPSE ETF has given a return of 44.88%.
CPSE ETF was originally managed by Goldman Sachs MF, which was acquired by Reliance MF in October 2015. Subsequently the finance ministry gave its nod for the transfer of management of CPSE ETF to Reliance Mutual Fund.
Second FFO received Rs 9,200 crore in subscription as against issue size of Rs 2500 crore. Over 1.2 lakh retail applications received for subscription. Institutional portion was oversubscribed 7.6 times while retail portion was subscribed two times.
This is the third tranche on offer through which the government aims to garner Rs2,500 crore. Prior to this, through two tranches the government raised Rs 3000 crore in March 2014 and Rs 6000 crore in January 2017 respectively.
"This clearly shows the future potential of fund raising through ETFs" said Sundeep Sikka, CEO, Reliance Mutual Fund.
CPSE ETF, comprises scrips of 10 PSUs namely ONGC, Coal India, IOC, GAIL (India), Oil India, PFC, Bharat Electronics, REC, Engineers India and Container Corporation of India. Retail investors can invest with a minimum of Rs 5,000.
The government has lowered the upfront discount to 3.5% in this tranche, and this will be offered to all category of investors. The earlier two series offered a 5% discount to retail investors. The second tranche of the CPSE ETF launched in January 2017, which was oversubscribed by 3 times.
ETFs are passively managed and primarily score over actively managed funds due to their low expense ratio. They carry higher risk than diversified equity funds as they have a concentrated portfolio of 10 stocks. Over the last one year, the CPSE ETF has given a return of 44.88%.
CPSE ETF was originally managed by Goldman Sachs MF, which was acquired by Reliance MF in October 2015. Subsequently the finance ministry gave its nod for the transfer of management of CPSE ETF to Reliance Mutual Fund.
