Are there any funds that focus on PSU banks? Should I invest in lump sum in such a fund or through SIP? —Sunil Maddala
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There are two exchange traded funds (ETFs) that do so. Invest in such a fund only if you are certain that it fills a void in your overall portfolio asset allocation or if you are optimistic about the returns from investments in the sector. Do remember that ETFs are traded on the stock exchange and to invest in these you need a demat account. There is no SIP provision to investing in these. You will need to discipline yourself and invest equal sums every month in these funds.
For your information, other funds such as SBI PSU and Religare PSU Equity invest across public sector undertakings (PSUs). While there are sector funds that invest solely in Banking, they do not restrict themselves to public sector banks.
This article was originally published on April 13, 2012.
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