Edelweiss Mutual Fund to launch third tranche

 Edelweiss Mutual Fund to launch third tranche of ‘BHARAT Bond ETF’ on 3^rd December 2021 

 

Highlights:

·         Edelweiss MF BHARAT Bond ETF will be launched with maturity date of 15^th April, 2032, and is aiming to raise Rs. 1,000 cr. as the base issue size with additional green shoe option

·         Edelweiss MF BHARAT Bond ETF AUM stood at Rs 36,359 Cr. in the end of October 2021

·         Post the launch of Edelweiss MF BHARAT Bond ETF in 2019, the total AUM for Passive Debt category is grown to around Rs. 50,000 cr. as on October 2021

·         Edelweiss MF BHARAT Bond ETF kicked-off the Passive Debt Category in India in December 2019. Since then, various other AMCs have launched 9 new schemes in this category, but Edelweiss has been successful in retaining its leadership position with 80% market share.

 

Edelweiss Asset Management today announced the launch of the third tranche of BHARAT Bond ETF starting from 3^rd December, after the successful launch of 4 ETFs in last 2 years. 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 Mutual Fund to design, launch and manage the product.

 

This new BHARAT Bond ETF and BHARAT Bond Fund of Fund (FOF) series will mature on 15^th April 2032. NFO will start from 3^rd December 2021 and end on 9^th December 2021. Through the launch of this new series in third tranche, Edelweiss Mutual Fund proposes to raise an initial amount of Rs. 1,000 crores with an open green shoe option. 

 

Tuhin Kanta Pandey, Secretary, DIPAM, Ministry of Finance said, “BHARAT Bond ETF program has achieved some important objectives that were envisioned while creating the blueprint of this program. It has provided aggregate savings in borrowing cost for participating CPSEs/CPSUs/CPFIs. It has provided easy access to investors into bond markets, especially retail investors who are looking alternative to Fixed Deposit. Further, adequate Liquidity on the exchange is encouraging investor participation and helping in deepening the bond markets. BHARAT Bond ETF program has led to promising impact on the overall Debt Passives landscape in India with many other AMCs also launching similar target maturity ETFs and Index Funds in the recent times. The organic increase in AUM of existing BHARAT Bond ETFs in the last 2 years resembles investor’s confidence in the product and we are very happy with its overall impact on the market.”

 

Radhika Gupta, CEO, Edelweiss Mutual Fund said, “We are excited to see the growth of Passive Debt category in India, post the launch of Edelweiss MF Bharat Bond ETFs. Around 20 new passive debt funds have been filed and 9 passive debt funds have been already launched by different AMCs post the launch of BHARAT Bond ETF in Dec 2019. The total AUM of this category has reached around Rs. 50,000 cr. as on October 2021 and Edelweiss AMC is a leader in this space with more than 80% market share. With this new launch of BHARAT Bond ETF, we now have five maturities on the yield curve – 2023, 2025, 2030, 2031 and 2032 which will help investors to choose the right maturity according to their needs. We are happy to see a healthy demand from investors for these ETFs in the current environment where safety is paramount.”

 

The ETF will invest in constituents of the NIFTY BHARAT Bond Indices, consisting of AAA rated public sector companies. BHARAT Bond Fund of Funds (FOF) with similar maturities will also be launched for investors, who do not have Demat accounts. The BHARAT Bond ETF AUM stood at Rs 36,359 Cr. in the end of October 2021.

Edelweiss Mutual Fund to launch second tranche of

Edelweiss Mutual Fund to launch second tranche of ‘BHARAT Bond ETF’

Highlights:

·         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.