SBI Mutual Fund floats SBI BSE PSU Bank Index Fund, SBI BSE PSU Bank ETF tracking BSE PSU Bank index

SBI Mutual Fund has launched two new open-ended schemes designed to track the BSE PSU Bank Index, presenting investors with an opportunity to engage with the growth of public sector banking. The new fund offer (NFO) for these schemes, namely the SBI BSE PSU Bank Index Fund and SBI BSE PSU Bank ETF, is scheduled to open on 17th March, closing on 20th March.

The primary aim of these funds is to provide returns similar to those of the securities represented by the underlying index, albeit with the understanding that tracking errors could occur. SBI Mutual Fund cautioned that there is no assurance that the investment objective will be achieved.

These funds are structured to invest primarily in securities included in the BSE PSU Bank Index, with an asset allocation between 95% and 100% dedicated to these securities. To manage liquidity, the funds may allocate up to 5% in government securities, tri-party repo, and units of liquid mutual funds. The benchmark for both funds will be the BSE PSU Bank TRI. 

The SBI BSE PSU Bank ETF will also be listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), facilitating trading for investors. This structure offers a diverse pathway for investment in the public sector banking sector. 

During the NFO period, the minimum investment is set at Rs 5,000, and additional investments can be made in multiples of Re 1. Viral Chhadva will manage these funds, providing strategic oversight and expertise. These offerings are suitable for investors seeking exposure to the performance of the PSU banking sector through a structured approach. By aligning with the BSE PSU Bank Index, the funds offer a diversified portfolio of prominent public sector banks, catering to those interested in the growth trajectory of this sector.

The introduction of these funds by SBI Mutual Fund comes at a time when public sector banks are playing a significant role in the financial landscape. By focusing on this sector, the mutual fund aims to broaden its investment offerings, addressing the needs of those looking for a focused investment strategy. The funds aim to combine the stability and growth potential inherent in the public sector banks, providing a balanced investment approach.

Currently, SBI Mutual Fund is not alone in offering schemes that focus on specific sectors. However, its decision to highlight the PSU banking sector through these new funds represents a strategic move to attract investors seeking targeted exposure. These funds are positioned to expand SBI Mutual Fund's portfolio offerings and strengthen its market presence in a dynamic economic environment.