SBI Mutual Fund launches SBI PSU Fund

SBI Funds, the joint venture between government-owned State Bank of India, the country's largest bank and Société Générale Asset Management (France) announced the launch of its PSU Fund, an open-ended equity scheme, which will invest in stocks of the PSU companies.

The investment objective of the scheme is to provide investors with opportunities for long-term growth in capital by investing in stocks of domestic Public Sector Undertakings and in debt and money market instruments issued by PSUs and others.
The new fund offer opens on 17 May 2010 and would close on 14 June 2010. The net asset value (NAV) would be disclosed on every business day.

Speaking at the launch, Achal Kumar Gupta, MD and CEO, SBI Mutual Fund, said, ''Public sector undertakings play a very important role in the economic development of our country. They have helped in creating a diversified industrial base for the country, with their strong fundamentals and sound financials, they offer good investment avenue. Added to this is the divestment opportunity to unlock the value of the PSUs. We believe that SBI MF's PSU fund will help our investors in creating wealth for them.''

Navneet Munot, chief investment officer, SBI Mutual Fund, said, ''PSUs have the necessary scale and size which is critical at this stage of economic growth in India. They typically exhibit better resilience during difficult times due to inherent fundamentals and better corporate governance standards. PSU stocks are available at reasonable valuations despite being consistent wealth creators and holding strong potential for future growth. Renewed focus on disinvestment will assist in bridging the valuation gap. In the current global context, PSU funds fit nicely into any equity portfolio from a risk-reward perspective.''

The minimum initial investment is Rs5,000 and in multiples of Re1 thereafter with no upper limit during the NFO period. The fund will offer growth and dividend options with special facilities of SIP, SWP and STP. The fund's benchmark index is the BSE PSU Index.