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Is Bharat-22 ETF a good bet? Here is a look at its pros and cons

This ETF's year-to-date track record is poorer than that of Sensex and Nifty ETF

Business Standard 

ETFs, ETF, funds, mutual funds

The government is planning a follow-on offer of the Bharat-22 Exchange Traded Fund (ETF). ICICI Prudential has filed draft papers. Here is a look at its pros and cons

Pros

  • This ETF's year-to-date track record is poorer than that of and (it was launched towards end November 2017). But this time span is too short to make any judgement
  • Index's back-tested long-term returns are attractive
  • Core sectors of the economy, like industrials, basic materials, energy and finance included. Can be used to capture the India growth story
  • Expense ratio is very low
  • If the government offers a discount, as it did last time, the offer will become more attractive

Cons

  • A more concentrated that could be more volatile
  • More of a thematic, PSU-focused investment

What should you do?

  • May consider this for your satellite portfolio, with allocation of 3-5 per cent of equity portfolio
  • Not for new investors

First Published: Sun, April 22 2018. 22:53 IST
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