A Brief look into BHARAT Bond ETF

Bond ETFs, or Exchange Traded Funds, offer investors a convenient way to invest in bonds while enjoying the benefits of exchange trading. These funds are passively managed and typically track specific bond indices.

1. Understanding Bond ETFs

BHARAT Bond ETF is an initiative by the Government of India to meet the borrowing requirements of CPSEs (Central Public Sector Enterprises) by pooling investments from retail, HNI (High Net Worth Individuals), and institutional investors.

2. BHARAT Bond ETF

This ETF comprises a basket of CPSE bonds following a specific index. The underlying index consists of eligible bonds issued by CPSEs, CPSUs (Central Public Sector Undertakings), CPFIs (Central Public Financial Institutions), and other government organizations.

3. Product Composition of BHARAT Bond ETF

Each BHARAT Bond ETF corresponds to a dedicated index based on its maturity tenor. The proposed ETFs include: > BHARAT Bond ETF – April 2023, benchmarked against Nifty BHARAT Bond Index – April 2023 > BHARAT Bond ETF – April 2030, benchmarked against Nifty BHARAT Bond Index – April 2030

4. Understanding the Underlying Indices

BHARAT Bond ETF offers several advantages over traditional debt mutual funds and individual bonds: Easy and low-cost access to CPSE Bonds, Enhanced liquidity compared to individual bonds, Transparency in holdings and operations, Predictability of returns, Tax efficiency due to favorable taxation rules, including indexation benefits.

5. Advantages of BHARAT Bond ETF

While all investments carry inherent risks, BHARAT Bond ETF aims to mitigate major risks associated with fixed-income securities

6. Managing Risks with BHARAT Bond ETF