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Business EconomyPosted at: Dec 12 2019 8:58PM


EXAM announces public issue of corporate bond ETF

Kolkata, Dec 12 (UNI) Edelweiss Asset Management company, a Group company of Edelweiss today announced the public issue of India’s first Corporate Bond ETF called the Bharat Bond ETF.
This ETF is an initiative of the Government of India, from the Department of Investment and Public Asset Management and the latter has given the mandate to Edelweiss AMC to design and manage the product.

The Bharat Bond ETF will help to deepen the corporate bond markets and enhance retail participation. The ETF will invest only in AAA-rated bonds of Public Sector companies. Through the ETF, Edelweiss Mutual Fund proposes to raise an initial amount of 3000 crores with a greenshoe option of 2000 crores in the 3-year maturity period (2023) and 4000 crores with a greenshoe option of 6000 crores in the 10-year maturity bucket (2030), a company release issued here said.

The ETFs will have target maturity structures. The ETF with a 3-year maturity will follow the Nifty BHARAT Bond Index -April 2023 and the one with a 10-year maturity will follow the Nifty BHARAT Bond Index – April 2030. The yield as on 05 December 2019 of Nifty BHARAT Bond Index – April 2023 is 6.69 pc and Nifty BHARAT Bond Index – April 2030 is 7.58pc. The investors who hold these ETFs for more than 3 years will get the benefit of capital gains with indexation. The ETF will invest in constituents of the NIFTY BHARAT Bond Indices, consisting of public sector companies. For more details please visit: https://www.bharatbond.in/

BHARAT Bond Funds of Funds (FOF) is also being launched for investors who do not have Demat accounts.

BHARAT Bond ETF provides the best features of Mutual Funds, ETFs and Bonds. It provides safety because it consists of a high-quality basket of public sector companies, liquidity and access at a much lower ticket size, compared to investment in individual bonds. BHARAT Bond ETF is also the lowest cost mutual fund product in India and the cheapest bond ETF/fund in the world. If a retail investor invests 2 lakhs in Debt ETF’s, the AMC will be charging a management fee of just one rupee.
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