Bharat Bond ETF: Why Should you Invest?

It seems the government is walking the extra mile to provide relief to the distressed investors by launching Bharat Bond Exchange Traded Fund, which is managed by Edelweiss. It is India’s first- ever bond exchange- traded fund that will unveil its NFO in July. Through, this company plans to raise Rs 14,000 crore in two tranches.

Where will Bharat Bond ETF invest money?

The Bharat Bond ETF will invest the money in AAA- rated bonds of public sector companies. The amount can be withdrawn on maturity, and coupons will be reinvested in the scheme. The maturity period is April 2025 and April 2031.

Why should the investor invest in this scheme?

You should invest in Bharat bond ETF because

• It includes AAA rates funds of selected public sector companies in its portfolio. So, you can be assured of high-quality returns.
• Secondly, the investment has a low expense ratio of 0.0005 percent, which means it is an affordable investment product.
• The default risk of this investment is low. In the current atmosphere, where the investors are worried about the safety of their money, this ETF provides relief.
• You will get healthy returns at the time of maturity.
• If you invest in this scheme for three years, you will get an indexation benefit for an additional one year, adding to your post-tax returns. Thus, improving tax-efficiency.

The ETF will include investment in high-quality public sector companies like Exim Bank, HUDCO, NABARD, NHAI, NHPC, PFC, Power Grid, etc.

Expected Returns

	Bharat Bond ETF April 2023	Bharat Bond ETF April 2030
AUM (cr.)	5,749	7,233
Return since inception	5.17%	6.43%
Yield to Maturity	5.71%	6.84%

Who can invest in Bharat Bond Mutual Fund?

Anyone can be a part of this scheme, but due to negligible default risk, it is a good investment option for senior citizens and passive investors.

Investors can invest Rs 1000 in this scheme and its multiples thereon.

There will be an exit load of 0.10% if the fund is redeemed on or before the completion of 30 days. However, there will not be any charge if the investment is redeemed after 30 days of allotment of units.

How can you invest in this scheme?

If you are a de-mat account holder, you can easily invest in this scheme or invest through the Bharat Bond of Fund having a similar maturity period. The forms are available at www.BharatBond.in and you can submit at Edelweiss branch.

The share price of this fund was Rs 1090.8 on BSE as of 30 June 2020, and Rs 1070 on NSE.

We all know stock markets are tumbling at a rapid pace in the wake of this pandemic. This investment scheme will give investors a reason to stay invested in the market as it provides investors different options for their investment needs at different time horizon,