InvestorQ : How does the Bharat Bond ETF work?
Aishwarya Nimbalkar made post

How does the Bharat Bond ETF work?

Answer
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3 months ago


The Bharat Bond ETF fund is a new offering. It is the only bond based ETF introduced till date in the country. The bond subscription opens on 14th July 2020. When you subscribe to this ETF, you can avail two options-

Opt for the series maturing in 5 years.
Choose the series maturing in 11 years.

The yields you can expect depend upon the maturity you choose. Investors opting for 5-year maturity (April 2025 series), can expect to earn interest of about 5.71% while opting for the 11-year maturity (April 2031 series) could expect to earn 6.28%. Since it is a debt fund, investors can avail of the benefit of indexation. This helps reduce your tax liability as long term capital gains ( LTCG) are taxed at 20%.