Bumper Returns on SIP and Upfront Investment in Nippon India ETF:A lump sum investment of just Rs 50,000 has grown to more than Rs 5 lakh in five years with the help of a monthly SIP of just Rs 1300. This bumper return has been given by Nippon India Mutual Fund’s equity scheme CPSE ETF. This scheme has given excellent returns not only in 5 years but also in 1, 3 and 10 years. The last 1 year return of CPSE ETF has been 112.63%, which is the highest in the category of PSU funds.
What is the specialty of this fund
CPSE ETF is actually an exchange traded fund (ETF) of Nippon India Mutual Fund, which invests only in government companies (PSUs). This is a thematic equity scheme, whose portfolio currently includes stocks of 11 government companies. The benchmark of this scheme is NIFTY CPSE Total Return Index. The good thing is that the expense ratio of this fund, which gives multibagger returns, is only 0.07%. That is, a very small part of the profit on returns is spent on the management of this scheme.
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How 50 thousand became 5 lakh rupees
If you had invested a lump sum of Rs 50,000 in this fund 5 years ago and also invested only Rs 1300 every month through Systematic Investment Plan (SIP), then the total fund value of your investment in 5 years would have been Rs 5,01,655. Whereas in these 5 years, your total investment including lump sum and SIP would have been only Rs 1.28 lakh. You can understand this calculation in detail here:
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Scheme Name : CPSE ETF
Lumpsum investment 5 years ago: Rs 50,000
Average annual return on lump sum investment over 5 years: 36.57%
Monthly SIP amount for 5 years: Rs 1300
Annualized return on SIP in 5 years: 52.54%
Total investment through monthly SIP over 5 years: Rs 78,000
Total investment in the scheme during 5 years: Rs 50,000 + Rs 78,000 = Rs 1,28,000
Fund Value after 5 years: Rs 5,01,655 (Rs 5.01 lakh)
(Source: AMFI, Value Research)
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Portfolio of CPSE ETF
According to the latest data, 99.96% of the CPSE ETF portfolio is invested in equity, most of which is invested in large government companies. In this, the share of large cap stocks is 93.57% and mid cap stocks is 6.42%, while there is no investment in small caps. This fund currently includes a total of 11 stocks, namely: NTPC, Power Grid, ONGC, Coal India, Bharat Electronics, NHPC, Oil India, Cochin Shipyard, NBCC India, SJVN and NLC India.
Success from investment in government companies
This success of Nippon India’s exchange traded fund CPSE ETF shows how good results can be achieved by investing only in the shares of government companies. The last 1 year return of this fund has been 112.63%, 3 years 59.75% and 10 years return has been 15.04%.
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For whom is this fund right
This fund managed by Nippon India Mutual Fund can prove to be a good option for those investors who trust government companies and want to earn profits from long term investment. By investing in CPSE ETF, investors can also hope to take advantage of the possibilities of unlocking value in the shares of government companies in the future. However, being an exchange traded equity fund, the exposure of CPSE ETF to equity is quite high. Therefore, according to the ‘riskometer’, it has been placed in the ‘very high risk’ category. However, due to investing in government companies only, it can be considered as an investment in comparatively strong companies. Only those investors should invest in this fund who have the ability to take risks and want to invest for a long period i.e. at least 5 years.
(Disclaimer: Investment in mutual funds is directly affected by the fluctuations in the stock market. Our aim is not to advise investing in any fund, but only to provide information. Take any investment decision only after consulting your investment advisor.)
