To commemorate the occasion, on December 3rd, Edelweiss Mutual Fund will launch a new round of its Bharat Bond ETFs. There is still time to participate in the new fund offer (NFO), nonetheless. The Bharat Bond ETF, which has a maturity date of April 2032, will allow all investors to participate in the NFO.
It is a government effort under the Department of Investment and Public Asset Management, and Edelweiss Mutual Fund has been given the authority to operate the fund.
The ETF will have a maturity date of April 15, 2032, and a target issue size of Rs 1,000 crore. As of October 30th, 2021, the Bharat Bond ETF had a total AUM of Rs 36,359 crore.
What is Exchange-traded fund (ETF) of Bharat Bonds ?
As an ETF listed on the NSE, it invests in public sector bonds and is available to all investors. If you put money into the fund, you'll get your money back with interest at a pre-determined time. During the term of the fund, you can purchase or sell NSE units at any moment.
Investing in the Bharat Bond ETF has a number of advantages.
With the Bharat Bond ETF, you may invest in government bonds with a high AAA rating. The fund's annual management fee is about 0.0005 percent (maximum Re 1 for Rs 2,00,000 worth of investment). You should expect "reliable" and "steady" returns at maturity because it's a bond-like structure with a defined maturity. You can buy or sell the ETF at any time within the exchange's trading hours.
Exactly how much money do I need to put down?
You can invest as little as Rs 1,000 and up to multiples of Rs 1 afterwards in the fund.
Investors may use online investing mechanisms like net banking and UPI to make their money work for them. In order to invest offline, you must provide a bank check and the completed application form. NEFT and RTGS payment options are also available.
It will invest in AAA-rated bonds issued by CPSEs/CPSUs/CPFIs and other government entities. These bonds are selected such that their maturity matches the fund's maturity as precisely as feasible.
Are there any contracts?
Since the fund is open-ended, there is no time limit on when you can withdraw your money. You may purchase and sell ETF units using your trading and Demat account in the same way. A 0.10 per cent exit cost is imposed on investors who withdraw within 30 days of investing in the Fund of Funds (FOF). There is no exit load after 30 days.
Risks?
There are four primary risks associated with BHARAT Bond ETF
- Price risk, Credit risk, Reinvestment risk and Liquidity risk
As of October 30th, 2021, Edelweiss Mutual Fund estimates that the post-tax return on an investment of Rs 100,000 in the Bharat Bond ETF would be 6.37 percent, compared to the 3.98 percent post-tax return on any traditional investment.359 crore.
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