Religare PSU Equity fund – Review and Analysis
Lets do a Review and Analysis and get into finer details of the New Fund Offer from Religare Fund House “Religare PSU Equity fund” and try to see if there is anything unique about this fund for us. Religare Mutual Fund has launched a PSU (Public Sector Undertakings) fund which will invest in Equity and Equity Related companies in few core sectors where the Central / State Government(s) has majority of it holding and the fund could benefit from divestment reforms taken by government in the near future.
The fund will invest 65 per cent of its assets in companies in the BSE PSU index and the remaining 35 per cent in other PSU companies.
Religare PSU Equity New Fund Offer opened on Tuesday September 29th 2009 and will close on October 28 2009. The fund offers both growth and dividend options. Entry load would be as per New SEBI Guidelines. Minimum application amount for lump-sum investment is Rs 5,000. For SIP investments, the minimum application amount is Rs 1,000. The minimum tenure for SIP enrolment is 6 months under the monthly option and four months under the quarterly option.
PSU Investment
I do not see any difference when it comes to investing in PSU or any other public companies. Government has over time clearly stated that PSU’s would remain PSU’s and government would at least hold 51% of stake in those companies, so there is nothing much that is going to improve in those PSU’s but when it comes to technicals and sentiments I guess PSU companies can benefit and so PSU funds but instead of investing in Religare PSU fund I would prefer to invest in SBI PSU NFO ( coming soon ) because of SBI Fund House’s reputation and my personal preference.
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The problem with govt. run companies is that sometimes the govt clamps down with demands – bank loan write offs, advances for unviable schemes and advances to loan applicants with doubtful repayment history. Then there are scams and politicians interfering in the running of companies under their respective ministries. It is a proven fact that NPSa of PSU banks is much higher than private banks.
The ineeficient management of PSU is also a matter of concern – NALCO being unable to develope an allotted coal block in one year.
Shipping Corp not ordering vessels when freight rates were high are good examples of bad management. Finally there is a lot of nepotism in the working of PSU companies in employment, contracting etc.
SBI as a Fund House is struggling with its performance since the last two quarters or so. I would prefer Religare because of their consistency in performance.
Regards,
Srikanth
To let you know that SBI Contra fund is one of the best performing funds.
Yeah, except for that all their funds have laggards especially SBI Magnum Blue Chip and Magnum Taxgain.
I don’t track Blue Chip but Magnum Taxgain probably thats why its not in my list of best tax saving funds
I agree with Srikanth, I have far more confidence in Religare as a consistent performer and as a brand. Recently, I read an interesting story on Religare, its massive growth in the last few years, and plans to be a top 5 global player, so that gives me more confidence in religare.
http://www.business-standard.com/india/storypage.php?autono=379507
If you have noticed, I told everyone from roof tops to avoid Sundaram PSU and invest in Religare PSU.
Now Religare’s NAV is 10.23 while Sundaram PSU is negative at 9.8.
This will continue even in future.
Those invested in Sundaram PSU should seriously look at exiting the fund.
I have never been a fan of PSU’s but yes good to see Srikanth that your investment is working well for you.
Yes, not just for me., but even for my clients and readers.