Edelweiss Mutual Fund said the fourth tranche of Bharat Bond ETF, India’s first corporate bond exchange-traded fund (ETF), is set to be launched tomorrow. The fund house managing the ETF said the new fund offer or NFO will open on December 2 and close for subscription on December 8. Bharat Bond ETF invests only in AAA-rated corporate bonds issued by government companies.
Bharat Bond ETF NFO – Key Details Here
Bharat Bond ETF is an exchange traded fund that has a fixed maturity and invests your money in bonds of public sector companies. It invests in bonds that have the same maturity as the underlying index.
Latest Bharat Bond ETF will track the Nifty Bharat Bond Index – April 2033 by investing in bonds of AAA-rated CPSEs/CPSUs/CPFIs and other government organizations.
The minimum investment per application is Rs. In multiples of 1,001 and re. 1 thereafter, for retail investors and Rs. 2,00,001 and in multiples of re. 1 thereafter for institutional investors.
Through the latest tranche, Edelweiss Mutual Fund plans to raise at least 1000 crores, with a greenshoe option to retain an additional 4,000 crores.
The fund house said the series will mature in April 2033 and offer a yield to maturity of 7.50%.
The first offering of the ETF was launched in late 2019.
However, there is no lock-in period as Bharat Bond ETF is traded on stock exchanges. They can be bought/sold during the tenure of the fund, subject to the liquidity of the fund.
The latest ETF will include papers issued by National Bank for Agriculture and Rural Development, National Highways Authority of India, Power Finance Corp and NTPC.
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Edelweiss, which designs and manages the ETF on behalf of the government, has so far launched the ETF through three phases, with total assets under management. 50,000 crores.
The fund house said that in the last one year, these ETFs have generated returns in the range of 2% to 4% as on November 30.
Fund managers say that this year, due to the strong increase in interest rates by the central bank, the returns of debt schemes have been affected.
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