How to invest in Goldman Sachs CPSE ETF – Online & Offline?

by Shiv Kukreja on March 20, 2014

in Investments

This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at [email protected]

Goldman Sachs is out with its new fund offer (NFO), Goldman Sachs CPSE ETF. The purpose is to facilitate the government’s initiative to reduce its shareholding in some of its public sector enterprises and thereby meet its revised disinvestment target of Rs. 16,027 crore. Though there is a lot of interest among the retail investors as far as this scheme is concerned, but when it comes to investing, there is a complete lack of interest from the distributors, brokers, government, Goldman Sachs itself and other service providers.

I think either they are not interested in retail investors participation or the groundwork has not been done in a systematic manner by any of them before launching this scheme. When it comes to handholding investors, I think nobody is interested.

Why is it so?

When it comes to taking active and responsible initiatives, the track record of our government has been very poor. We have witnessed such systematic failures earlier as well, with the RBI’s inflation indexed bonds and Rajiv Gandhi Equity Saving Scheme (RGESS). I think the government is interested only in meeting its disinvestment target this time or probably it is too busy campaigning for the general elections.

Goldman Sachs has very limited infrastructure to entertain investors’ queries. Also, very few number of distributors have been empanelled with them to make this channel successfully participate in their efforts. I called their toll free number 1800 266 1220 on many occasions in the last couple of days, but I never succeeded even once. I sent a mail also asking for the online/offline procedure to do this investment, against which I received the following response:

Dear Sir, 

With reference to your below mail please find the KIM cum Application Form for CPSE ETF. The demat  account is compulsory as the holding is in dematerialized mode only. Retail Individual Investors can invest in the Scheme with a minimum investment amount of `5,000/- (Rupees Five Thousand only) and in multiples of `1/- (Rupee One) thereafter. We would request you to refer the “Application Size for Determining Investor Category” section under page no. 5 of the attached KIM cum Application form for more details. You may also download the Scheme related other materials from our website gsam.in.

 http://goldmansachs.com/gsam/in/advisors/resources/literature/scheme-information-document/index.html

The NFO is available in NSE MFSS and BSE Star MF platform, you may invest online if your broker is providing these platforms.

Please note that the NFO period for retail investors is from 19th March’14 to 21st March’14, you may submit the duly filled application form at any of the NFO collection points as mentioned under page 15 & 16 of the attached KIM cum Application Form.

 For any further assistance please reach out to us on 1800 266 1220(toll free) or mail us [email protected]

Regards,

Client Service Team,

Goldman Sachs Asset Management (India) Pvt. Ltd

As the investors are feeling very much helpless, you must be wondering why you are not getting any phone calls or mails from your broker(s) and why there is no active participation from the mutual fund distributors either. The answer lies with this statement – “The Scheme shall not incur any distribution expenses and no commission shall be paid by this Scheme”. This statement I have picked from the Scheme Information Document (SID). From this statement, it is very much clear why intermediaries are not running after you.

Now, let’s check the important thing. How to invest in this CPSE ETF – online or offline?

Online Investment

First important thing is that you cannot hold CPSE ETF’s units in a certificate/physical form. You need to understand that as this fund is an exchange traded fund (ETF), you need to compulsorily have a demat account to invest in this fund during the offer period, and also to subsequently hold them when this fund gets listed on the stock exchanges. If you don’t have a demat account, it is very difficult to get it opened and invest in this scheme, all in a single day. But, you can still make some efforts and try your luck.

Though I don’t have the list of brokers which are providing online investment facility to invest in this scheme, one thing is clear to me that they are not actively marketing this product. As I am writing this post, I know Kotak Securities, Edelweiss, ICICI Direct and FundsIndia are providing this facility to their clients. As I have demat/trading accounts with Kotak Securities and Edelweiss and I am associated with FundsIndia Advisor as an independent investment advisor, I am going to explain their respective online investment procedures.

Kotak Securities – You need to first login to your Kotak Securities online platform. Click on the “Mutual Fund” tab on the top of the webpage, click on “Place an Order”, select your holding pattern, select fund house to be “Goldman Sachs Mutual Fund”, select either “CPSE ETF Retail” if your investment is Rs. 2 lakhs or below or “CPSE ETF HNI” if your investment is more than Rs. 2 lakhs.

Edelweiss Broking – With Edelweiss also, you need to login to their trading platform. Click on the “Mutual Fund” tab, click on the “Purchase” option, select “G S Asset Mgt(I) P Ltd” as the AMC, select “NFO Equity” as the category, select the series to be “Growth” and the scheme name to be “CPSE ETF”.

FundsIndia Advisor – If you are already registered with FundsIndia as an investor, you need to click on the “Invest” tab as you login to your online account. Click on the “New Investment” tab, click on the “Select Scheme” box, select “Goldman Sachs Mutual Fund” as the AMC, select NFOs from the scheme classification dropdown and click on ‘Search’. You will get “Goldman Sachs CPSE Exchange Traded Scheme – Growth” as the scheme.

Select the scheme, type the amount which you want to invest and click on ‘Continue’. Select your depository name as NSDL or CDSL, fill your DP ID, DP name and beneficiary/demat account no. and click on Save. You’ll be required to transfer the investment amount afterwards.

ICICI Direct – As KS and Sanjay confirmed to me yesterday, ICICI Direct is also providing online investment facility for this scheme. It is under the “Mutual Funds” tab on ICICI Direct’s platform and you need to select ‘NFO’ to reach to this scheme.

I could write about the online investment procedure of these service providers only. If any of you have anything to share about your broker’s process, please share it share and I’ll update it in this post.

Also, people who have online investment facility with their broker should look out for this scheme under the Mutual Fund section as well as under the IPO/NFO section, you never know under which section this scheme has been placed by your broker.

Offline Investment with a physical common application form

If your broker is not providing online investment facility, here is the process to invest in this scheme offline:

As it is clear that a demat account is compulsory to invest in this scheme, now you need to download a common application form to subscribe to its units. You need to duly fill this form with all the relevant details like the investor category, name of the applicant(s), his/her/their PAN number(s), date of birth, demat account details, address & contact details, status, occupation and bank details of the first/sole applicant.

There are certain important points which you need to pay attention to while filling this form:

Mode of Holding – The mode of holding for subscribing to these units should exactly match the mode of operation of the demat account as specified in the Depository Participant’s record. e.g. If you have a joint demat account in your and your spouse’s name, you being the first applicant, then only you should be the first applicant and your spouse the second applicant in this scheme.

Bank Account Details – While filling your bank account details, make it sure that you mention details of your bank account which is linked to your demat account.

Cheque/DD – Your investment cheque or demand draft should favour “CPSE ETF” and as always, must be account payee only. In order to protect yourself from fraud, you must mention your name (as the sole/first applicant) and application number on the back of the cheque/demand draft. In case you don’t find the application number on your form, you must mention your demat account details and PAN number along with your contact number.

Documentation – Retail individual investors are required to attach only two documents along with their application form and investment cheque/DD

(i) KYC compliant proof

(ii) Self-attested PAN card copy

Nominee – As there is no place to mention nominee details in the form, you need not panic about it. As with all your demat/electronic investments, the person who is registered as the nominee in your demat account will remain your nominee with this investment as well.

Investment above Rs. 2 lakhs – If you are investing more than Rs. 2 lakhs, then you’ll be considered as a non-institutional investor. You should tick your investor category accordingly in that case.

Investment for a Minor – Investment in the name of a minor is allowed in this scheme, but there should not be any joint investment in that case.

Where to submit your applications?

Once your application form is duly filled and the relevant documents are attached, you need to submit this form at any of the Investor Service Centres of Karvy Computershare. Here is the link to all those service centres along with their contact details – http://benchmarkfunds.com/gs/Documents/NFOCOLLECTIONPOINTS-CPSEETF.pdf

Even if your broker is not providing online or offline investment facility to you, you can call on the customer care number of your broker and ask for some kind of assistance in this matter. There is a possibility that your broker takes your request over the phone itself and applies for this scheme on your behalf subject to funds availability.

Lack of enthusiasm by the broker and the distributor community has once again proved that they don’t care about their clients and clients’ welfare. They still like to service only those products in which there are high commissions/incentives.

{ 12 comments… read them below or add one }

Amlan Basak March 20, 2014 at 9:41 PM

Thank you Shiv!

Reply

Shiv Kukreja March 21, 2014 at 9:28 AM

You are welcome!

Reply

Chethan S. March 21, 2014 at 9:48 AM

SBICap Securities does not allow investing online for this scheme. They cited migration to new platform as the reason. I was asked to visit their office to submit my application, following which I dropped the plan!

A friend who has a Sharekhan account was unable to apply as the platform threw up errors stating investing not allowed (the scheme was showing up there and sufficient funds were available).

Reply

Shiv Kukreja March 21, 2014 at 10:50 AM

All these are excuses, no substance. Give insurance like commissions to these intermediaries and then see how every platform starts working.

Reply

Bhavin March 22, 2014 at 12:17 PM

I was able to apply online with Sharekhan account on the 19th itself. My wife also applied from her Sharekhan account. No glitches for either of us.

Reply

Shiv Kukreja March 22, 2014 at 12:22 PM

Thanks Bhavin for sharing your experience !!

Reply

Amlan Basak March 21, 2014 at 12:21 PM

My demat account is with Indiabulls and nowadays they don’t provide any facility to apply for IPO/TFB/NFO! 🙁
Based on the 4 options provided by Shiv for applying online, I thought FundsIndia will be very good as it is free. I spent couple of hours last night, registered myself but it was/is not possible to get the a/c fully activated within 1 day.
Since today is the last day for NFO, I am missing this opportunity!

Reply

Shiv Kukreja March 21, 2014 at 8:45 PM

That’s disappointing Amlan !!

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Ketan A March 21, 2014 at 7:39 PM

Even HDFC securities is providing the online investment facility under their “Mutual Funds” tab.

Reply

Shiv Kukreja March 21, 2014 at 8:45 PM

Thanks Ketan for this info !!

Reply

Anand March 23, 2014 at 8:29 AM

I Dont see it on ICICIDirect as suggested by some readers…

Reply

Shiv Kukreja March 23, 2014 at 8:45 AM

The issue stands closed now. It got closed on Friday, March 21st.

Reply

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