Edelweiss Asset Management to launch New Bharat Bond ETF

By Author  |  Published: 13th Jul 2020  6:44 pm

Hyderabad: Edelweiss Asset Management will launch the second tranche of Bharat Bond ETF with two new series. The new fund offer will be from July 14 to July 17. It is looking to raise between Rs 3,000 crore and Rs 14,000 crore.

Radhika Gupta, CEO, Edelweiss Mutual Fund said the company initially planned to launch the fund towards December but advanced its launch in view of the prevailing market conditions. “While there is disruption in the job market due to the pandemic people are also getting cautious and are thinking to invest,” she said.

Bonds that mature in 2025 have an underline index yield of 5.71 per cent. Those that will mature in 2031 have an underline index yield of 6.82 per cent. The product contours remain same as the first series of BHARAT Bond ETF, which was launched in December 2019. The AUM at lunch was Rs 12,444 crore and it has risen to Rs 13,872 crore as of June 30.
“We see demand from investors for these ETFs in current environment where safety is paramount,” said Gupta

The BHARAT Bond ETF programme is an initiative from the Department of Investment and Public Asset Management. It has given the mandate to Edelweiss AMC to design and manage the product.

The ETF will invest the money in bonds of AAA rated public sector companies. The scheme, however, is neither a capital protected or guaranteed return product. The taxation is same as debt mutual fund- it is taxed 20 per cent post indexation, which allows one to adjust purchase price of investment with inflation.

The ETF will track the Nifty Bharat Bond Index whose constituents include Power Finance Corporation, REC Limited, Power Grid Corporation, National Highways Authority of India, Nuclear Power Corporation of India, Indian Railway Finance Corporation Limited, Housing and Urban Development Corporation and NHPC Limited.