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Cabinet approves launch of Bharat Bond ETF

Capital Market 

This will be the first corporate bond ETF in the country

The Union Cabinet has approved the launch of Bharat Bond Exchange Traded Fund (ETF).

Bharat Bond ETF would be the first corporate bond ETF in the country. It will provide additional money for CPSUs, CPSEs & other government organizations.

The ETF will be tradable on exchanges having small unit size Rs 1,000. It will have transparent net asset value (NAV) and portfolio (daily disclosure on website). The ETF will have low cost of 0.0005%.

Each ETF will have fixed maturity date and it will track underlying index on risk replication basis. It will invest in a portfolio of bonds of CPSE, CPSU, CPFI or any other government organizations. The first tranche would be only for 'AAA'-rated bonds.

The ETF will offer two options, one maturing in three years (by 2023) and the other in 10 years (by 2030). It will offer only growth option, and no dividend option.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, December 04 2019. 13:10 IST