Invest in 10 Maharatna’s and Navratna’s

Investment Objective

The objective is to confer returns that, before expenses, closely correspond to the total returns of the securities as represented by the Nifty CPSE Index, by investing in the securities which are constituents of the Nifty CPSE Index in the same proportion as in the Index.

However performance of the scheme may differ from that of underlying Index due to tracking error. Their can be no assurance or guarantee that the investment objective of the scheme would be achieved.

For Anchor investors,offer open & closes on 17th JAN 2017.

For Non Anchor investors, offer opens on 18th JAN & closes on 20th JAN 2017.

Benchmark Index : Nifty CPSE Index

About the Index

It has been constructed to facilitate the Government of India’s initiative to disinvest some of its stake in selected Central Public Sector Enterprises (CPSEs) through the ETF route. The index contains 10 CPSEs with base date of 1st January, 2009.

As on 30th December, 2016, the one year CAGR^ return of Nifty CPSE TRI is 17.45% against 4.39% given by Nifty 50 TRI.

Selection Criteria’s for the Nifty CPSE Index

The 10 CPSEs selected meet below mentioned parameters:

  • Included in the list of CPSEs published by the Department of Public Enterprise.
  • Listed at National Stock Exchange of India Ltd. (NSE)
  • Having more than 55% government holding (stake via Govt. Of India or President of India) under promoter category.
  • Companies having average free float market capitalization of more than Rs 1,000 Crore for six month period ending June 2013 are selected.
  • Have paid dividend of not less than 4% including bonus for the 7 years immediately preceding or for at least 7 out of the 8 or 9 years immediately preceding, are considered as eligible companies as on cut-off date i.e. 28th June 2013.

NAVRATNA STOCK

 

Industry allocation

Face Value

Rs 10/- per Unit

Type of scheme

An open-ended index scheme, listed on the Exchange in the form of an Exchange Traded Fund (ETF) tracking the Nifty CPSE Index.

Liquidity Facility

All investors including Authorized Participants and large Investors can Subscribe (buy) / Redeem (sell) units on a continuous basis on the Exchange where the units are listed.

Load structure

Entry Load- Nil

Exit Load- Nil

Category of Investors (only during the FFO period)

  • Retail Individual Investors
  • Qualified Institutional Buyers or QIB
  • Non-Institutional Investors
  • Anchor Investors

Minimum Application Amount

During the Further Fund Offer (FFO) Period

For Non Anchor Investors

Retail Individual Investors can invest in the FFO of the scheme with a minimum amount of Rs 5000/- and in multiplies of Re 1/- thereafter.

For Anchor Investor

Investors can invest in the FFO of the scheme with a minimum investment amount of Rs 10 crores and in the multiples of Re 1/- thereafter.  

Discount offered by GOI of the scheme

A 5% discount on the ‘FFO Reference Market Price’ of the underlying Nifty CPSE Index shares shall be offered to FFO of the Scheme by GOI.

  1. RISK FACTORS

Standard Risk Factors

  • Investment in the Mutual Fund’s Units involves investment risks such as trading volumes, settlement risk, liquidity risk, default risk including the possible loss of principal. Further, there is no assurance or guarantee that the objectives of the scheme will be achieved.
  • Past performance of the Sponsors/AMC/Mutual Fund does not guarantee the future performance of the scheme.
  • The present scheme is not a guaranteed or assured return scheme.

Risk relating to Investing in Indian Markets

Investment in India may be affected by political, social, and economic developments affecting India, which may include changes in exchange rates and controls, interest rates, government policies, diplomatic conditions, hostile relations with neighbouring countries, and many more.

Risk relating to receiving underlying CPSE Securities from the GOI

In the event the scheme does not receive the underlying CPSE Securities from the GOI pursuant to the FFO, for any reason whatsoever, including on account of GOI terminating the agreement with the AMC (for sale of the underlying CPSE Securities to the scheme) for breach of any terms under such agreement, the scheme will not allot FFO Units to the investors and would refund the subscription amount to the investor in accordance with the previous under this supplement.

Market risk

The NAV of the scheme will react to the securities market movements. The investor may lose money over short or long periods due to the fluctuation in the scheme’s NAV in response to factors such as economic, political, social instability or diplomatic developments, changes in interest rates and perceived trends in stock prices, market movements and over longer periods during market downturns. The scheme may not be able to immediately sell securities.

Market Trading Risks

  • Absence of prior active market
  • Trading in units may be Halted
  • Lack of market liquidity
  • Units of the scheme may trade at prices other than NAV
  • Regulatory risk
  • Reinvestment risk
  • Risk of substantial redemptions

Volatility Risk

The equity markets and Derivative markets are volatile and the value of securities, Derivative contracts and other instruments correlated with the equity markets may fluctuate dramatically from day to day. This volatility may cause the value of investment in the scheme to decrease.

Redemption Risk

Investors may note that even though the scheme is open-ended scheme, the scheme would ordinarily repurchase units in creation unit size.

Risk Associated with Investing in Debt Securities

  • Interest rate risk

Changes in interest rates will affect the scheme’s NAV. Debt markets, especially in developing markets like India, can be Volatile leading to the possibility of price moving up or down in fixed income securities and thereby to possible movements in the NAV.

  • Pre-payment Risk

A borrower may prepay a receivable prior to its due date. This may result in a change in the yield and tenor for the scheme.

  • Zero coupon and deferred interest bonds

The scheme may invest in zero coupon bonds and deferred interest bonds, which are debt obligations issued at a discount to their face value. Such investments experience greater volatility in the market value due to changes in interest rates than debt obligations.

  • Liquidity or Marketability Risk

This refers to the ease at which a security can be sold at or near its true value. The primary measure of liquidity risk is the spread between the bid price and the offer price quoted by a dealer. Trading volumes, settlement periods and transfer procedures may restrict the liquidity of the investments made by the scheme.

  • Credit Risk

Credit risk means that the issuer of a security may default on interest payments or even paying back the principal amount on maturity.

  • Risk of Investing in Unrated Debt Securities

It is more likely to react to developments affecting market and credit risk than are more highly rated securities, which react primarily to movements in the general level of interest rates.

SCHEME’S PERFORMANCE

  • Absolute Returns

Scheme performance

Figure 1: Returns for FY 2014-15 are from i.e. 03-Apr-2014 to 31-Mar-2015

  • Compounded Annualised returns (%) as on December 30, 2016

Compounded Annualised returns

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