SBI Mutual Fund launches two new PSU bank-focused schemes

The New Fund Offer (NFO) opens on Monday, March 17, and closes on March 20, 2025.
Both schemes will track the BSE PSU Bank Index, providing investors exposure to leading public sector banks.

The SBI BSE PSU Bank Index Fund is an open-ended index fund, while the SBI BSE PSU Bank ETF is an exchange-traded fund (ETF) that will be listed on NSE and BSE.

Investment strategy and fund details

These funds will invest at least 95% of their total assets in securities that are part of the BSE PSU Bank Index.

The remaining 5% may be allocated to government securities, triparty repos, and liquid mutual funds for liquidity management.

The benchmark index for both schemes is the BSE PSU Bank TRI.

Investors can subscribe to these funds with a minimum investment of ₹5,000 during the NFO period.

Subsequent investments can be made in multiples of ₹1.

Why this matters for investors

Public sector banks have been gaining traction due to strong credit growth, improving asset quality, and government-backed initiatives.

These schemes provide a structured way to invest in PSU banks without having to pick individual stocks.

Fund management

The funds will be managed by Viral Chhadva, who also oversees SBI’s Nifty 500 Index Fund, Nifty50 Equal Weight Index Fund, and Nifty50 Equal Weight ETF.

Key risks

While these funds aim to replicate the performance of the BSE PSU Bank Index, returns may deviate due to tracking errors.

Additionally, market risks and fluctuations in the banking sector could impact overall performance.