R*Shares PSU Bank BeES an ETF that's a smart way to buy PSBs

With markets attempting to arrest the down fall post demonetisation and US presidential elections, investors are making attempts to identify sectors or stocks that stand to benefit from the demonetisation move in the long run.

One of the most important sector that stands to benefit from the current demonetisation move, in the long run, is clearly the PSBs. The sector clearly has its challenges and is plagued with the non-performing assets issue.

However, the sector stands to benefit in the long run and the current valuations at which the PSU stocks are trading makes a case for investing in PSBs.

One of the best ways to take exposure in PSBs can be via an Exchange Traded Fund (ETF) that mimics the performance of the PSBs.

R*Shares PSU Bank BeES is one such ETF that tracks the performance of PSBs in India.

This ETF has investments in SBI, Bank of Baroda, Punjab National Bank, Canara Bank, Union Bank of India, IDBI Bank, Bank of India, Allahabad Bank, Oriental Bank of Commerce, Syndicate Bank and Andhra Bank.

Since demonetisation the fund has delivered almost 6.70 per cent returns and has thus outperformed broader markets. Over six months the fund has generated 29.62 per cent returns and over a one year period the fund has delivered 2.77 per cent; whereas Sensex has delivered 2.94 per cent over the similar period.

An ETF is a fund that tracks an index, a commodity, or a basket of assets like an index fund. ETFs are traded on bourses just like a security, unlike mutual funds.