Edelweiss Mutual Fund to launch second tranche of ‘BHARAT Bond ETF’
· Two new series of BHARAT Bond ETF to be launched in July 2020
· ETF to have two maturities – April 2025 and April 2031
· Base issue size of Rs. 3,000 crores, with a green shoe option of Rs. 11,000 crores
· ETF will track Nifty BHARAT Bond Target Maturity Indices
Edelweiss Asset Management today announced the launch of the second tranche of BHARAT Bond ETF in July, with two new series, after the successful launch of the initial series of ETFs in December 2019. The BHARAT Bond ETF program is an initiative of the Government of India, from the Department of Investment and Public Asset Management and the latter has given the mandate to Edelweiss AMC to design and manage the product.
The two new Bharat Bond ETF series will have maturities of April 2025 and April 2031. Through the launch of these two new ETF series, Edelweiss Mutual Fund proposes to raise an initial amount of Rs. 3,000 crores with a green shoe option of Rs. 11,000 crores based on market demand. The ETF will invest in constituents of the NIFTY BHARAT Bond Indices, consisting of AAA rated public sector companies. BHARAT Bond Funds of Funds (FOF) with similar maturities will also be launched for investors, who do not have demat accounts.
Radhika Gupta, CEO, Edelweiss Mutual Fund said, ‘’After an overwhelming response to the first tranche of BHARAT Bond ETF in December last year, we are excited to announce this next tranche of two new maturity series. The launch is in line with our vision to create a ladder of BHARAT Bond ETFs across various maturities on the yield curve. This will provide more options for investors to match their investment needs with different time horizons.’’
She added ‘’In the current environment, investors need safe, liquid, and tax efficient options for their debt investments, and BHARAT Bond ETF meets this need effectively. We are happy that investors in the first series of BHARAT Bond ETF have had a good experience and the AUM of these series has also increased organically after the launch.”
The first launch of BHARAT Bond ETF had successfully raised over Rs. 12,400 crores, from a diverse set of investors. Further, after the NFO, the BHARAT Bond ETF program continued to see healthy investor participation and good liquidity on the exchanges. The Bid-Ask spread (the difference between the buy and sell quotes) has stayed in a narrow range of 5 to 10 Bps and the daily average traded value in these ETFs has been between Rs. 3 to 3.5 crores, making it one of the more liquid ETFs in India.