Feb 11, 2013, 05.32 PM | Source: Moneycontrol.com
sdsdsSBI Mutual Fund launches SBI Sensex ETF, an RGESS Eligible Mutual Fund Scheme.
SBI Sensex ETF is SBI Mutual Fund’s first equity ETF, which would, take exposure in the defined basket of stocks in SENSEX index, in the same proportion. SBI Sensex ETF would thus passively invest in the best of Indian companies, which offer superior financial performance, better governance coupled with maximum liquidity, thereby making a comfortable start for the first time investors.
An open-ended exchange traded scheme, the NFO of SBI Sensex ETF, was launched in the presence of Union Finance Minister, Shri P Chidambaram, on February 9, 2013. The minimum investment during the NFO will be Rs 5,000/- and in multiples of Re.1 and allotment of units will be at a premium approximately equal to the difference between face value and allotment price. SBI Sensex ETF comes with a passive investment strategy and at a significantly lower cost to invest in the equity market.
The scheme shall endeavour to provide returns that, before expenses, closely correspond to the returns delivered by BSE Sensex, subject to tracking error, said Mr. Ravi Prakash Sharma, the Fund Manager of this scheme.
A few unique advantages of ETFs are disclosure of portfolio on a daily / real time basis and investors would find it easy to buy and sell at any time during market hours. From the tax benefits point of view, Investment in SBI Sensex ETF is eligible for tax benefits under RGESS 2012 (Section 80CCG of the Income tax Act) for new retail investor having gross total income less than or equal to Rs. 10 Lakh.
Commenting on the launch, Mr. Deepak Chatterjee, Managing Director & CEO, SBI Funds Management Private Limited said “SBI Sensex ETF is our initiative to further complement government’s efforts to reach out to a diversified class of retail investors. Historically, equity as an asset class has always offered better returns over longer term. For conservative and first time investors, SBI Sensex ETF scheme would be a good diversified product, which gives passive exposure to the investors in well-established and financially sound companies. An ETF product can be best suited for conservative investors as ETFs are known for low cost structures and product efficiency.”