Bharat Bond ETFs cross ₹50,000 crore AUM mark. 5 things to know
2 min read . Updated: 19 Oct 2022, 04:36 PM IST
Premium- Bharat Bond ETF is an exchange-traded fund that invests in the debt of public sector companies
Bharat Bond Exchange Traded Funds (ETFs), a central government initiative, have crossed the ₹50,000 crore asset under management (AUM) mark in just two and a half years, Edelweiss Mutual Fund (MF) said on Wednesday. Bharat Bond ETF is an exchange-traded fund that invests in the debt of public sector companies. The ETF currently invests only in 'AAA' rated bonds of public sector companies.
Edelweiss AMC is the fund house that manages this ETF and the fund house also launched a ‘fund of fund’ (FoF) for the ETFs to facilitate retail investors to buy/sell like a normal mutual fund.
The funds raised through the debt ETF helps in smoothening borrowing plans of the participating CPSEs or public sector banks. It also helps them in meeting their capital expenditure needs.
Bharat Bond ETFs cross ₹50,000 crore AUM mark: 5 things to know
- The overall passive debt category has crossed ₹1.15 lakh crore mark at the industry level
- The first tranche of the Bharat Bond ETF in December 2019 and had fetched about ₹12,400 crore
- So far, five tranches of Bharat Bond ETFs have been launched. There are 5 different maturities offered by the fund ETFs, 2023, 2025, 2030, 2031, and 2032
- The ETF invests in constituents of the Nifty Bharat Bond Indices, consisting of AAA-rated public sector companies
- Edelweiss MF manages Bharat Bond Exchange Traded Funds (ETFs)
Radhika Gupta, MD & CEO, Edelweiss Asset Management Limited, Said, “The success of target maturity funds, especially of Bharat Bond ETFs, is a matter of great pride for us. We not only brought to market India’s first corporate bond ETF but also created a product and product category from the ground up. In the process, we were able to bring investors a unique investment offering and also become a leader in the fixed-income and passive debt category. We are overwhelmed by the trust the investor community has reposed in us."
Bharat bond ETFs provide higher degree of certainty of returns (if held-to maturity) with a higher safety of capital as it invests in government owned AAA rated public sector bonds, as per experts.
"The success of Bharat Bond ETFs is a testament to the financial strength of PSUs and the trust that they inspire in investors. We are happy that our maiden debt ETF has achieved phenomenal success," said Tuhin Kanta Pandey, Secretary DIPAM, Ministry of Finance (MoF).
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