The objective of the scheme is to seek capital appreciation by investing primarily in equity and equity-related instruments of PSU companies across the cap curve and sectors. PSU companies are good wealth creators and industry leaders in their area of operations. The expected re-rating of these companies in the future in the event of the government divesting stakes in PSU companies can lead to above average gains over a period of time.
Investment Strategy:
At least 65% of the assets will be invested in PSU companies. Fund shall take concentrated bets. The fund will have no market capitalisation bias and will be style neutral. The fund will have no market capitalisation bias and will be style neutral.
The PSU segment has started attracting investors’ attention due to the disinvestment news flows supported by stable proeconomic reform government. Divestment, if it happens, will increase the free float of companies and will increase the weightage in major benchmark indices. Therefore, it would receive more investor’s interest.
Historically, the PSU index has traded at around 25-30% discount to BSE 100 in term of earning multiples. PSU stocks have a good performance history on the bourses and have the ability to outperform the broader markets in the longer term.
INVEST in the NFO with a three to five year horizon.
The Scope for Value Unlocking of Public Sector Undertakings is huge and Religare and Sundaram both are poised to take advantage of these. Religare has already invested its Assets. More buying in the PSU Stocks by the new Funds like Sundaram PSU Fund and SBI PSU Fund (which is in the process of being launched) will benefit Religare PSU Equity Fund which is already fully invested.