How to Invest in Bharat Bond ETF?

11 Mar 2020

 3-mins  Read

What is a Bharat Bond ETF?

Bharat Bond is a fundraised by the government to invest in central government companies.  Bharat Bond ETF holds a ‘AAA’ rating i.e. investments that have a high level of creditworthiness with the strongest capacity to repay its investors.

The government of India introduced the Bharat Bond Exchange Traded Fund (ETF) on the 4th of December. Besides, It is also India’s first corporate exchange fund.  The ETF has a fixed maturity wherein the investor will receive the investment along with the return after a certain period of time.

Why should you invest?

It has a stable structure and fixed maturity period like a government bond, hence it comes with higher safety.  Also, because it is for public sectors, there is government-backed security. Bharat Bond ETFs disclose live values, which make them transparent. The ETF is very popular among global investors, as it offers desired assets at lower costs. And so, the Bharat Bond offering is being marketed as a win-win for both the government and the investor.

  • Higher Safety
  • Relatively Stable returns
  • Low cost- The fund is managed at a cost of 0.0005% per annum i.e. Rs. 1 charged for every Rs. 200,000 of investment.

1. What is the yield of a Bharat Bond ETF?

The yield of a Bharat Bond ETF is 6.7% for 3 years and 7.6% for a 10-year period. The bond ETF is taxed leading to an after-tax amount of 6.3% and 7.15% respectively.

2. What is the maturity of a Bharat Bond ETF?

The ETF has two target maturities of 3 and 10 years each.

3. What’s the minimum amount to invest in a Bharat Bond ETF?

You can buy a Bharat Bond ETF for as little as ₹1,000.

4. How to Invest in a Bharat Bond ETF?

Check out this website: Bharat Bond ETF

5. Who can invest in a Bharat Bond ETF?

Any residents (inclusive of NRI’s) can invest in Bharat Bond ETF.

6. What will be the exit load of a Bharat Bond ETF?

There will a 0.10 percent exit load if the fund is redeemed or switched out on or before the completion of 30 days from the date of allotment. However, there will be a NIL charge after the completion of 30 days from the date of allotment of units.

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