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Bharat Bond ETF

Updated on March 11, 2023

Bharat Bond ETF is a government sponsored Exchange Traded Fund managed by Edelweiss Asset Management which invests in bonds issued by Central PSUs (Public Sector Undertakings), Central Public Sector Enterprises (CPSEs), Central Public Finance Institutions (CPFIs) and similar government entities. This ETF invests in bonds with the highest credit rating and maturity periods which matches with the fund’s maturity.

Bharat Bond ETF explained

These bonds come with two maturity options:
Short-term: 3 to 5 years
Long-term: maximum 10 years
A Demat account is required for investing in Bharat Bond ETFs and retail investors can invest through the Edelweiss Mutual Fund website or through brokers as well.

Bharat Bond ETF features

Some key Bharat Bond ETF features are:
a) Bharat Bond ETF was launched to facilitate investments in bonds for small investors.
b) It acts as a major capital source for PSUs.
c) Bharat Bond ETF acts as an alternative source for the government for raising funds through debt securities which offer safety, liquidity and predictable returns to investors.

Benefits of Bharat Bond ETF

Key benefits of Bharat Bond ETF are:
The returns are predictable, known in advance and stable.
It offers a very low cost option to conservative investors for gaining exposure to public sector bonds.
The bonds are high quality, offer easy liquidity and transparency.

Limitations of Bharat Bond ETFs

Limitations of Bharat Bond ETFs
The underlying bonds carry credit as well as interest risk, like other debt securities.
Although the bonds can be traded on exchanges, investors will need to stay invested for a long tenure (10+ yrs) for getting their principal with interest.