Edelweiss AMC is planning to launch the second tranche of Bharat Bond ETF next week. Two series of the exchange-traded fund will be launched on July 14, 2020. Bharat Bond is a government of India (GOI) initiative to raise money from the public by making bonds available for you to purchase and Edelweiss AMC has been given the responsibility to launch the product and design the same. The AMC is aiming to raise around Rs 14,000 crores through the second tranche.
Before we delve deeper into the product, let’s get a quick understanding of how bonds work and what’s in it for you.
BHARAT Bond ETF is an Initiative by the Government of India to cater to the borrowing requirements of the Public Sector by pooling investments from retail, HNI and institutional investors. .
BHARAT Bond Exchange Traded Fund is a low-cost basket of CPSE bonds that seeks to replicate an index and trades on the stock exchange. The ETF would replicate the underlying index which will comprise bonds issued by CPSEs, CPSUs/CPFIs and other Government organizations. ETF and indices will have a specific maturity date.These ETFs are passively managed.
The BHARAT Bond ETF will have two series. One that will mature in April 2025 and the other in April 2031.The NFO period for both the series will begin on July 14, 2020, and end on July 17, 2020.
Here are the underlying indices for both the series respectively:
BHARAT Bond FOF is an alternative option of investment especially for those investors who do not hold a Demat account. The FOF’s will invest in the units of the underlying BHARAT Bond ETF of respective maturities.
BHARAT Bond FOF (fund of the fund) will also be launched for those investors who do not have a Demat account.
There are actually three ways you can invest in this fund:
A Target Maturity Bond ETF is an exchange-traded fund that has a defined fixed maturity that invests in bonds with a similar maturity. This enables it to combine features of bond and mutual funds both. In these ETF’s the underlying securities are held closer to the maturity of the Scheme.
Depending on the route you choose to invest, here are the details:
Expense ratio: 0.0005%
Here are the minimum investment requirements for different investor categories under BHARAT Bond ETF.
BHARAT Bond FOF
Directly from AMC: If you buy the units of the BHARAT Bond ETF directly from the AMC, the minimum investment amount is Rs 25 crores.
You may invest in BHARAT Bond FOF via SIPs, STPs and SWPs post the NFO period.
If you are investing in Bharat Bond ETF on the exchanges, there is only one way to trade during the market hours.
NIFTY BHARAT Bond Index – April 2025 constituents
NIFTY BHARAT Bond Index – April 2031 constituents
Risk Profile of Bharat Bond ETF ( As per the scheme information document)
Risk Profile of Bharat Bond FOF ( As per the scheme information document)
Mutual fund investments are subject to market risk, please read all scheme related documents carefully before investing.