Third tranche of BHARAT Bond ETF to launch on Dec 3

Edelweiss Asset Management has announced the launch of the third tranche of the BHARAT Bond Exchange Traded Fund (ETF), which invests in the constituents of the Nifty BHARAT Bond Indices that comprises of AAA rated public sector companies.

The BHARAT Bond ETF program is a government initiative through the Department of Investment and Public Asset Management and the mandate to manage the fund has been given to Edelweiss Mutual Fund.

The ETF will be launched with a maturity date of April 15, 2032, and is aiming to raise Rs 1,000 crore as the base issue size with an additional green shoe option. The total assets under management (AUM) of the BHARAT Bond ETF stood at Rs 36,359 crore as on October 30, 2021.

Meanwhile, BHARAT Bond Fund of Funds with similar maturities will also be launched for investors who do not have a demat account. Individuals need a demat account to trade in ETFs.

“BHARAT Bond ETF program has achieved some important objectives that were envisioned while creating the blueprint of this program. It has provided aggregate savings in borrowing cost for participating CPSEs/CPSUs/CPFIs. It has provided easy access to investors into bond markets, especially retail investors who are looking alternative to fixed deposit,” said Tuhin Pandey, Secretary, DIPAM, Ministry of Finance.

In a similar context, Radhika Gupta, CEO, Edelweiss Mutual Fund, highlighted the fact that around 20 new passive debt funds have been filed and nine passive debt funds have been already launched by different mutual fund houses post the launch of BHARAT Bond ETF in 2019.

“With this new launch of BHARAT Bond ETF, we now have five maturities on the yield curve – 2023, 2025, 2030, 2031 and 2032, which will help investors to choose the right maturity according to their needs. We are happy to see a healthy demand from investors for these ETFs in the current environment where safety is paramount,” said Gupta.

The new fund offer (NFO) will start from December 3, 2021 and end on December 9, 2021.

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