The scheme has seen some very bad times like between 2, the scheme returns fell by 46.35%.
That is why they don’t advise in their favor. Mutual fund advisors believe that even though PSU companies are doing well now, their past track record is a little problematic. Mostly because of the processes and track record of the companies run partially or fully by the government. PSU stocks do not hold a very good reputation in the market. Therefore, these stocks are getting related as clustering of positive, namely earnings upgrades, anti ESG sentiments and under ownership likely leading to valuations rerating of these stocks in the very near term," says Ashutosh Bhargava, Fund Manager and Head Equity Research, Nippon India Mutual Fund. These stocks are in general very cheap, value oriented stocks and institutional ownership is also low. While supply shortages were there earlier as well the advent of Ukraine/Russia War has given a shot in the arm to all anti ESG plays. Now World is more bothered about availability of basic factors of production on deficient supply concerns. Defense, energy, power generation and distribution and so on. If one looks into details most of these stocks were badly beaten down due to ESG concerns. In a world where supply side is a far bigger constraint, the earnings prospects of these stocks are improving from near to medium term perspective. "CPSE ETF consists of resource companies or asset owners. Experts also believe that the uncertain geo-political scenario is also making certain segments of the market do well. This is also contributing to the performance of the ETF.
Energy sector has also been seeing an uptick of late. The portfolio of the scheme is highly inclined towards energy stocks. CPSE ETF was launched in 2014 and has given a return of 8.30% since inception. Financial planners attribute the impressive performance to the rally in PSU stocks. The scheme has offered 64.48% returns in the last one year, 16.86% in six months and 13.97% in three months.
CPSE ETF, which invests in the shares of government-owned companies, has been doing very well lately.
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