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Disclosed by the Government of India on 4th December 2019, the Bharat Bond Exchange Traded Fund (ETF) by Edelweiss Mutual Fund will hit the markets on December 12th 2019. This offer will be open for investors until December 20. This ETF will have a fixed maturity date and your money will be invested in bonds issued by Public Sector Companies

For the uninitiated, an Exchange Traded Fund or ETF  is an investment fund just like mutual funds but with a big difference; that is, it can be bought and sold through the stock exchanges. Coming to Bond ETF, a bond ETF invests in a number of bonds in the underlying index. The investment can be in the corporate, government or public sector bonds. Since ETFs are bought and sold through the stock exchanges, a Demat account is required here for transactions. However, investors who don’t have a Demat account can reap similar benefits by investing  Bharat Bond Fund of Funds. A fund of funds lets you hold a portfolio of other investment funds instead of investing directly in stocks, bonds or other securities.

Scheme Details

Before we delve deeper into the details related to the fund, it is imperative to know what the underlying indices related to Bharat Bond represents. Bharat Bond ETF is available with a maturity of 3 years and 10 years. 

Invest in direct mutual funds

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  • SIP starting at ₹500

Option 1: Bharat Bond ETF -April 2023

Option 2: Bharat Bond ETF -April 2030 

OptionOption 1: Bharat Bond ETF -April 2023Option 2: Bharat Bond ETF -April 2030
Investment ObjectiveApt for short term investments which replicate Nifty Bharat Bond Index – April 2023 by investing in bonds of CPSEs/CPSUs/CPFIs and other Government entities subject to tracking errorApt for Long term investments which replicate Nifty Bharat Bond Index – April 2030 by investing in bonds of CPSEs/CPSUs/CPFIs and other Government entities subject to tracking error
Underlying IndexBHARAT Bond Index – April  2023BHARAT Bond Index – April  2030
Minimum Investment Amount (offer period)
  • Anchor Investors can invest a minimum application amount of Rs.10,00,00,000 (Rupees 10 Crores only) and in multiples of Rs 1,000 subsequently.
  • Individual Retail  investors can invest with the minimum investment amount of Rs. 1,000 and in multiples of Rs 1000 subsequently. Subject to maximum investment amount of Rs 2,00,000 (Rupees Two Lakhs only)
  • Retirement Funds, QIBs, Non-Institutional Investors- these investors can invest with a minimum investment amount of Rs 2,01,000 (Rupees Two Lakhs and One Thousand Only) and in multiples of Rs 1000 subsequently
Offer PeriodFor Anchor Investors, it’s 12th December 2019

For other investors, it’s 13th December to 20th December 2019

Fund ManagersMr. Dhawal Dalal and Mr. Gautam Kaul

 Insights About the Fund

The Bharat Bond Exchanged Traded Funds is no doubt a good option for investors looking for low risk, good returns and a substantial level of liquidity. Investing in this fund will ensure that your investment is done in high quality ‘AAA’ rated bonds of Public Sector Companies tracking the Nifty Bharat Bond Index with a fixed maturity tenure. As it is an ETF, once the NFO (New Fund Offer) is out, its units can be bought and sold on the stock exchange. The units will be held in your Demat account.

 However, investors who don’t hold a demat account have an alternative option to invest through Bharat Bond Fund of Funds (FOF) that has similar maturity in line with underlying ETF.

About The  Fund Managers

Dhawal Dalal: Mr. Dhawal Dalal works as Chief Investment Officer – Fixed Income with Edelweiss Mutual Fund , since his appointment in October 20, 2016. Prior to that, he was the Executive Vice President & Head of Fixed Income at DSP BLK Mutual Fund ; his tenure spanning over 19 years across India and the USA. After beginning his career with Merrill Lynch Asset Management in USA in 1996 he has led a team of Fund managers and managed around INR 220 billion of fixed income assets across the maturity and IG credit spectrum. Dhawal is an affable person and firmly believes that every person should have a sense of purpose in life. He is an MBA from Dallas University (USA) has over 20 years of experience.

 Other funds managed by Dhawan Dalal:

  • Edelweiss Banking & PSU Debt-Growth
  • Edelweiss Corporate Bond-Growth
  • Edelweiss Dynamic Bond Fund-Retail-Growth
  • Edelweiss Govt Securities-Growth
  • Edelweiss Multi-Asset Allocation-B-Growth
  • Edelweiss Short Term-Growth

 Gautam Kaul: With rich experience of over 15 years in financial markets, Gautam Kaul is a fund manager with Edelweiss Asset Management Limited. He is with Edelweiss from 2016 and has been associated with some of the most renowned firms in India such as Sahara, Invesco, IDBI Asset Management among others.

 Other funds managed by Gautam Kaul:

  • Edelweiss Banking and PSU Debt Fund – Regular Plan – Growth Option
  • Edelweiss Dynamic Bond Fund – Institutional Plan – Growth Option
  • Edelweiss Government Securities Fund – Regular Plan – Growth Option
  • Edelweiss Dynamic Bond Fund – Regular Plan – Growth Option
  • Edelweiss Short Term Fund – Regular Plan – Growth Option

How To Invest In This Fund On Groww?

Investing in Bharat Bond ETF on Groww can be done within minutes. Just follow the steps given below :-

  • Login to your Groww account or signup and finish the KYC process if you are a new user
  • The fund page opens where you will be able to see additional information about the fund such as asset allocation, information about the fund managers etc.
  • Accordingly, select the mode of investment ( SIP or Lumpsum) and start investing!

Conclusion

Overall, Bharat Bond ETF is a good product for investors seeking low risk factor, proper returns and a reasonable level of liquidity. Alternatively, it gives you the option of investing without a demat account through Bharat Bond Funds of Fund (FOF) . Please note that being an ETF, it is governed by the same risks that ETFs possess due to interest rate movements. Like all other investment options, base your decisions on thorough research, risk profile and investment objectives. 

Happy Investing!

Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. NBT do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.

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