InvestorQ : Someone I know mentioned that the CPSE ETF is the government’s divestment in government entities. What does this mean?
Ankit Patil made post

Someone I know mentioned that the CPSE ETF is the government’s divestment in government entities. What does this mean?

Answer
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seema Upadhyaya answered.
2 years ago


What you have heard is accurate! The CPSE ETF, or Central Public Sector Enterprises (CPSE) exchange-traded funds (ETFs) are open-ended funds that have no lock-in period. These are passive investment funds that invest in stocks of public-sector units (PSUs) that have an established track record and dividend history.

As government holds majority stake in PSUs, it divests its stake to raise money. The fourth tranche of CPSE ETF, thus, is a way of the government divesting its stake to raise money.

In fact, the CPSE ETF was constructed to facilitate the government’s divestment in PSUs.