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natasha Samani made post

What is Bharat ETF Bond? What is the nature of this bond?

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ananya Sing answered.
8 months ago

1) An ETF or exchange-traded fund invests in a basket of securities that mostly tracks a certain index. ETFs are similar to mutual funds, but the big difference is that can be bought and sold only through the stock exchanges. 

2) A bond ETF, on the other hand, is a basket of bonds in the underlying index. It can invest in any sectorial bonds such as Corporate, Government, Public sector unit bonds, etc. So, technically speaking a Bharat ETF Bond is a basket of bonds that only invests in government PSU bonds.

3) Bharat Exchange-Traded Fund Bond is soon to be launched and it seems to be a great deal for the Indian Investors. These bonds are corporate debt funds in nature. While previously several corporate debt bonds have been launched in India, this one is a lot different from others. This bond will have investments only in bonds that are issued by a selected set of central government PSUs.

4) If you are an investor who needs a tax-efficient and reliable fixed income, this bond could be a great option for you since the default risk of the companies whose bonds it will constitute stands at zero. This is a thematic fund and hence it might outperform the market. Also, these bonds are backed –up by the government so there are chances that investors are if not fully, mostly covered in terms of their initial investment. 

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8 months ago

WHAT IS BHARAT BOND? =The Bharat Bond ETF is a debt fund. Nominally, it's a corporate debt fund. While there are many corporate debt funds in India, this ETF is unlike any of the previous ones. This is a fund that will have investments only in bonds issued by a select set of central government PSUs.

=Bharat Bond ETF will invest in bonds of AAA-rated government-owned companies, which lowers credit risk. ... The ETF will have a fixed maturity date, lower interest rate risk and provide predictable returns if held till maturity. The units will be liquid as the instrument will be listed on the stock exchange

Source: ET.
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