InvestorQ : When will be the second tranche of Bharat bond ETF shall be launched? Please share all the relevant details of the issue and should I invest?
krithika Saxena made post

When will be the second tranche of Bharat bond ETF shall be launched? Please share all the relevant details of the issue and should I invest?

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Anisha Awate answered.
4 months ago


Bharat bond ETF is an exchange-traded fund that exclusively invests in bonds or a basket of bonds in the underlying index. These bonds invest in securities of government companies. This means they are highly safe, as the companies are AAA-rated companies generally and are backed by the government. The second tranche of these bonds shall be launched in July this year by Edelweiss Asset Management.

Under the second tranche, there will be two maturity options – 5 years (April 2025) and 11 years (April 2031), through which the government expects to raise Rs. 14,000 crore. These ETFs will invest in constituents of Nifty-Bharat Indices, consisting of AAA-rated public sector companies.

The minimum investment in these bonds shall be Rs. 1000. One can invest directly through the ETF if they have a Demat account or they can opt the Bharat bond fund-of-fund route. The return on these funds shall be closer to the indicated index yield if it chooses to hold it till maturity. Therefore, the returns are not fixed.

Bharat fund ETFs do not have a lock-in period as it is listed on a stock exchange and anyone could buy or sell securities through it. However, the fund will invest in bonds that would be typically closer to the maturity of these bonds.

Should you invest?
Well, the second tranche of Bharat Bond ETF within a year is an indicator that the first has been really successful. It will offer several benefits to the conservative debt fund investors who are wishing to save for the long-term. These funds are cheaper with low expense ratios and invest in high-quality public sector funds. It also offers a tax-efficient return as compared to other risk-free options like Bank Fixed deposits, etc. So, they can be a great investment option for those looking for long-term options to park their money, and want the least risk in their portfolio.





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Tisha Malhotra answered.
3 months ago


Bharat Bond ETF will launch its New Fund Offer (NFO) in the month of July, 2020. The issue is said to raise Rs. 14,000 crore in two new series. The said plan could be able to raise Rs. 3000 crore through the green show option and Rs. 11,000 crore based on the market demand. However, the launch is happening amidst the coronavirus crisis this could have a major impact on the subscription of the fund.