SBI Mutual Fund Launches Two New PSU Bank-Focused Schemes

SBI Mutual Fund has introduced two new investment schemes—the SBI BSE PSU Bank Index Fund and the SBI BSE PSU Bank ETF—which aim to provide investors exposure to India’s public sector banking sector. Both schemes will track the BSE PSU Bank Index, offering a diversified approach to investing in leading PSU banks. The New Fund Offer (NFO) opens on March 17, 2025, and closes on March 20, 2025.

Key Highlights of the Schemes

Schemes Launched

• SBI BSE PSU Bank Index Fund (Open-ended index fund)
• SBI BSE PSU Bank ETF (Exchange-traded fund listed on NSE and BSE)

Investment Strategy

• At least 95% of total assets will be allocated to securities included in the BSE PSU Bank Index.
• The remaining 5% will be allocated to government securities, triparty repos, and liquid mutual funds for liquidity management.
• Benchmark Index: BSE PSU Bank TRI

Minimum Investment

• ₹5,000 during the NFO period.
• Subsequent investments in multiples of ₹1.
• Fund Manager: Viral Chhadva (Manages other SBI index funds).

Investment Rationale

• PSU banks are experiencing strong credit growth and improving asset quality.
• Government support and financial reforms have strengthened the sector.
• These funds provide investors with a structured way to gain exposure to PSU banks without selecting individual stocks.

Potential Risks

• Tracking errors may cause deviations from index performance.
• Market risks and fluctuations in the banking sector may affect overall returns.