Edelweiss Mutual Fund launches the third tranche of the ‘BHARAT Bond ETF’


Edelweiss Asset Management announced the launch of the third tranche of the BHARAT Bond ETF from December 3. This new series BHARAT Bond ETF and BHARAT Bond Fund of Fund (FOF) will expire on April 15, 2032. The NFO will open from December 3 to December 9. The Bharat Bond ETF Series III proposes to raise an initial amount of Rs 1,000 crore with an open green shoe option of Rs 4,000 crore, bringing the issue size to Rs 5,000 crore. The fund house can increase the size of the issue depending on demand.

The BHARAT Bond ETF program is an initiative of the Government of India, Department of Investment and Public Asset Management and the latter mandated Edelweiss Mutual Fund to design, launch and manage the product.

The ETF will invest in components of the NIFTY BHARAT bond indices, which are composed of public sector companies rated AAA. BHARAT Bond Fund of Funds (FOF) with similar maturities will also be launched for investors who do not have a Demat account. The BHARAT Bond ETF AUM stood at Rs 36,359 cr. end of October 2021.

“The BHARAT Bond ETF program has achieved some important goals that were envisioned when creating the master plan for this program. It resulted in overall savings on borrowing costs for the participating CPSE / CPSU / CPFI. It has given investors easy access to the bond markets, especially retail investors looking for an alternative to fixed deposit. In addition, adequate stock market liquidity encourages investor participation and helps deepen bond markets. The BHARAT Bond ETF program has had a promising impact on the overall passive debt landscape in India, with many other AMCs also recently launching ETFs and index funds with similar target maturity. The organic increase in assets under management of existing BHARAT bond ETFs over the past 2 years resembles investor confidence in the product and we are very pleased with its overall impact on the market, ”said Tuhin Kanta Pandey, Secretary, DIPAM, Ministry of Finance.

Radhika Gupta, CEO of Edelweiss Mutual Fund, said: “We are delighted to see the growth of the passive debt category in India following the launch of the Edelweiss MF Bharat Bond ETFs. About 20 new passive debt funds have been deposited and 9 passive debt funds have already been launched by different AMCs after the launch of BHARAT Bond ETF in December 2019. Total assets under management in this category reached around Rs. 50,000 cr. as in October 2021 and Edelweiss AMC is a leader in this field with more than 80% of the market. 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 choose the right maturity according to their needs. We are pleased to see strong investor demand for these ETFs in the

current environment where safety is paramount.


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