Chance of a lifetime. CPSE ETF is now open for subscription

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Sorry for the misleading headline. I love clickbait! After all, there’s “Naked” in “NakedBeta”.

It’s another month, and another tranche of CPSE ETF is on offer for investors. In case you don’t know about CPSE ETF, it’s better that way, but here’s a small snippet about it so that you don’t accidentally invest.

The ETF was created by the Govt to carry out its disinvestment program. In other words, it wanted money and started selling its stakes in PSU holdings through this ETF. It was first launched in Mar 2014, and there have been 5 subsequent offerings.

HEAVY discounts were offered since the NFO and Reliance just sold the shit out of the ETF.

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Anyway, here’s the gold that the ETF holds:

Stellar names right? 😜 These are all stocks where the Govt is the largest shareholder and as such, they have the best operating performance, the best boards, and best in class corporate governance.

These stocks are so bestest that the bestestness reflects in the stunning performance of the ETF

Cray right! Oh, and in the recent budget announcement, the Govt proposed to offer ELSS like tax-saving benefits to the ETF. This hasn’t been notified yet. But no amount of benefits will make this ETF worth investing in.

Look…this blog will remain forecast free. But I’ll take a standing bet that this stupid ETF will never outperform Nifty 50, EVER!

If you ask me, there is absolutely NO fricking reason for anyone to invest in this stupid ETF. This ETF is just for the Govt to offload family silver and there is no investment thesis here, whatsoever! You are better off investing in a Nifty 50 index fund.

If you are playing the 3% discount this ETF is offering, be very careful. This is not a case of a simple discount, i.e. price – X% discount. The discount is calculated on the reference market price. This Capitalmind peice is old but still holds true.

Posted by Passivefool

A passive investor at present who was actively scammed once. Seduced by the humble beta, preaching to the choir now.

3 Replies to “Chance of a lifetime. CPSE ETF is now open for subscription”

  1. Aptly said. It’s crap. Wonder who finds it worthy and how does it ever get subscribed.

    Reply

  2. You caught me with this article headline 🙂
    Who ends up buying these CPSE ETFs because they seem to be over-subscribed. Are these mis-sold or someone like LIC ends up taking up the lion’s share.

    Reply

    1. Yuss!! Clickbait works 🙂

      Reply

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