Prime Minister Shri Narendra Modi has announced that the government is now going to pay more attention to the PSU sector.
This will give more and more projects to the PSU sector which will lead to very good growth in this sector.
Investors are investing their money in PSU companies but if you are not able to understand which PSU company you should invest money then the best choice for you is to invest your money in CPSE ETF.
The full form of CPSE ETF is Central Public Sector Enterprises Exchange Traded Funds. Let us understand completely about CPSE ETF today.
What is CPSE ETF?
Like the other ETFs, this ETF is also an index in which all the best companies related to Central Public Sector Enterprises are included.
Investment in CPSE means you invest your money in all these companies. This is the best asset to invest in the PSU sector because you can get good returns by investing money in this ETF directly in one go instead of buying multiple shares.
Which companies are included in CPSE ETF?
As we talked about in the beginning, India’s best PSU sector companies are present in this ETF.
We have given the details of these companies below and their percentage have been shown at the same time, it has also been shown which sector this company comes from.
| Stock Invested in | Sector | % of Total Holdings |
|---|---|---|
| Power Grid Corporation of India Ltd. | Power – transmission | 19.79% |
| Oil & Natural Gas Corporation Ltd. | Oil exploration & production | 18.58% |
| National Thermal Power Corporation Ltd. | Power generation | 18.26% |
| Coal India Ltd. | Coal | 17.49% |
| Bharat Electronics Ltd. | Aerospace & defense | 12.57% |
| NHPC Ltd. | Power generation | 4.66% |
| Oil India Ltd. | Oil exploration & production | 2.88% |
| SJVN Ltd. | Power generation | 1.76% |
| NBCC (India) Ltd. | Civil construction | 1.67% |
| Cochin Shipyard Ltd. | Ship building & allied services | 1.22% |
| NLC India Ltd. | Power generation | 1.09% |
How to invest in CPSE ETF?
The method of investing in this ETF is straightforward. Type CPSE ETF in whichever broker you manage your demat account with.
Many different types of companies will open in front of you that invest your money in this ETF. You can invest in CPSE ETF through any of those companies.
But we give you this advanced tip that you should invest in the CPSE ETF through the company which has a high market cap and also high volume.
Long-term investment in CPSE ETF
If you invest in this ETF for a long period, then according to its chart history, you can get very good returns.
If you look at the last 1 year’s returns, you get 106. 26% returns.
If you look at the returns for the last 5 years, you get returns of 226.67%. Which is a very good return compared to any good stock.
Short-Term Investment in CPSE ETF
We calculate short-term investment according to 1 month and 6 months.
If we look at the one-month return of this ETF, it is 9.27% and if we look at the last 6 months’ return of this ETF, it is 69.10%.
So if we talk about how this ETF has given returns in short-term investment, then you can see that this return is very excellent.
Is swing trading possible in this ETF?
If we talk about the definition of swing trading, it means that you invest money for a period between one week to two weeks and book your profit in the meantime.
So if you look at the chart carefully we shared, it is quite volatile, you can take advantage of this volatility by investing at the right time and booking profit at the right time.
But remember that for swing trading your chart analysis should be strong and not only chart analysis but for any ETF or stock investment you should also have a very good understanding of the market.
If your chart analysis and market understanding are very good then you can get very good returns in a very short time in this ETF.
Conclusion
If we talk about ETF investing, almost all the investors have been making all their investments in Nifty 50 ETF. But recently ETFs like PSU bank ETF and CPSE ETF have come into the limelight.
The reason for this is that these ETFs give good returns in a very short time and they are quite volatile. Swing traders can take advantage of this volatility very well.
Note– Before making any investment in the share market, you should do your analysis and market reading properly so that you do not suffer a loss in the share market.