Launch of Bharat Bond Exchange Traded Fund
(An open ended Target Maturity Exchange Traded Fund predominately investing in constituents of Nifty BHARAT Bond Index – Aril 2025 & April 2031)
Managed by Edelweiss Asset Management Ltd.
Oﬀer Period – 14th July, 2020 – 17th July, 2020
In our continuous endeavour to update our valued investor about the New Investment Ideas / Theme, we would like to share Launch of Bharat Bond Exchange Traded Fund (An open ended Target Maturity Exchange Traded Fund predominately investing in constituents of Nifty BHARAT Bond Index – Aril 2025 & April 2031) managed by Edelweiss Asset Management Ltd.
What is Bharat Bond ETF?
Ø Public Sector Companies: An Exchange Traded Mutual Fund which will invest your money in bonds issued by Public Sector companies
Ø Defined Maturity: The fund will have a defined maturity date and at maturity you will get back your investments proceeds along with returns.
Ø Exchange Traded: You can buy or sell units of this fund on exchange anytime during the tenure of the fund.
Why should you invest in BHARAT Bond ETF?
Ø Safety: Your money will be invested in bonds of Public Sector Companies
Ø Returns: You can earn stable return with lower tax over the maturity period
Two Options to choose from:
v Option 1: Bharat Bond Apr 2025 – YTM : 5.64%, Post Tax Return : 5.31%pa
v Option 2: Bharat Bond Apr 2031 – YTM : 6.81%, Post Tax Return : 6.28%pa
NOTE: Rate of Inflation assumed 4%
Ø ETF will have a fixed maturity date like a bond
Ø ETF Maturities will be – April 2025 and April 2031
Ø ETF will follow Nifty BHARAT Bond Index
Ø ETF will invest only in AAA Rated Bonds issued by Public Sector Companies maturing on or before the maturity of the ETF
Ø ETF will hold bonds till their maturity and coupons received will be reinvested
Ø Up to 5% allocation towards G-Sec / CBLO for liquidity management
Nifty BHARAT Bond Index
Ø Index will follow a Target Maturity structure
Ø Index to follow a buy and hold strategy where existing bonds are held till maturity
Ø Weight allocation based on outstanding debt amount of the issuer in the particular period Issuer weights to be capped at 15%
Ø Any issuer that ceases to be a CPSE, CPFI or Statutory body or the rating is downgraded below AAA, shall be removed from the index on the next rebalancing date.
NIFTY Bharat Bond Index – April 2025 constituents as on 26th June 2020
NIFTY Bharat Bond Index – April 2031 constituents as on 26th June 2020
ü Assumed Tenure for Traditional Investment and Bond ETF (5 Indexation ) 4.74 Years and Tenure for Traditional Investment and Bond ETF (11 Indexation) 10.76 Years.
ü Assumed Rate of Inflation is 4%.
ü *Traditional investment Taxed at 30% + 4% Cess & BHARAT Bond ETF Taxed at 20% + 4% Cess post indexation
ü Above is only for illustration purposes. Please consult you TAX Advisor before making any investment.