SBI Mutual Fund has introduced two new investment options: SBI BSE PSU BANK INDEX FUND and SBI BSE PSU BANK ETF, both based on the BSE PSU Bank Index (BSE PSU Bank TRI).
These New Fund Offers (NFOs) opened for subscription on March 17 and will be available for investment until March 20, 2025.
SBI MF NFO: Start investing with ₹5,000
As per SBI Mutual Fund, the SBI BSE PSU BANK INDEX FUND is an open-ended index fund, while the SBI BSE PSU BANK ETF is an open-ended exchange-traded fund.
Both are designed to track the BSE PSU Bank TRI Index. Investors can start investing in these NFOs with a minimum amount of ₹5,000, followed by additional investments in multiples of ₹1.
There is no lock-in period for either fund, but investors should note the exit load rules. In the SBI BSE PSU BANK INDEX FUND, a 0.25% exit load is applicable if the investment is withdrawn within 15 days of allotment.
After 15 days, there is no exit fee. For the SBI BSE PSU BANK ETF, there is no exit load, allowing investors to withdraw at any time.
SBI MF NFO: Investment allocation
As per the Scheme Information Document (SID), both funds will allocate 95% to 100% of their investment in stocks included in the BSE PSU Bank TRI Index.
The remaining 0% to 5% can be invested in government securities, tri-party repo, or liquid mutual fund units. Viral Chhadva will manage both schemes.
SBI MF NFO: Investment strategy
These funds follow a passive and index-based strategy, meaning they won’t try to outperform the market or take defensive measures in case of market fluctuations.
The fund manager will not analyze individual stocks or sectors but will replicate the index, ensuring returns closely match the index performance while minimizing risks.
SBI MF NFO: Who should invest?
According to SBI Mutual Fund, these schemes are ideal for investors looking for long-term capital appreciation and who wish to invest in BSE PSU Bank TRI index stocks. However, investors should be aware that these funds fall under the high-risk category, as per the riskometer.
