WWW.INVESTCHIPS.COM

“PSU stocks are available at reasonable valuations, despite being consistent wealth creators and holding strong potential for future growth. It may be recalled that even during the global financial crisis in 2008, PSUs have done well”, SBI Mutual Fund Chief Investment Officer Mr Navneet Munot said in an interview.

SBI Mutual Fund, a subsidiary of State Bank of India, has launched SBI PSU Fund. The objective of the scheme would be to provide investors with opportunities for long-term growth in capital along with the liquidity of an open-ended scheme through an active management of investments in a diversified basket of equity stocks of domestic Public Sector Undertakings and in debt and money market instruments issued by PSUs and others.

SBI PSU Fund will be benchmarked against BSE PSU Index and will be managed by Rama Iyer Srinivasan, who holds 16 years of experience in the area of financial services, apart from holding an M.Com and MFM degree. Presently Srinivasan is also the fund manager of Magnum Equity Fund , Magnum Global Fund Magnum Sector Funds Umbrella - Emerging Business Fund and SBI Infrastructure Fund - Series I.

What is our take?

Investing in PSU’s is a good sounding theme. Proposed compulsory 25% public holding would present compelling opportunities to get good PSUs at reasonable valuation. But they would not be a multi-bagger in near term. Those who already invested in quality Mutual Funds, can subscribe this NFO as a diversification option. As other balanced equity funds also holding PSU stocks in portfolio, investors should not add this fund as a core option but as a satellite fund with limited allocation