First Corporate Bond ETF of India gets Cabinet Approval

Published: December 4, 2019

The Cabinet Committee on Economic Affairs under, chaired by the Prime Minister, Narendra Modi on Wednesday, 4 December 2019 has given its approval for the creation and launch of the first corporate bond exchange-traded fund(ETF) of India, named ‘Bharat Bond Exchange Traded Fund’.
Bharat Bond ETF is will work on creating an additional source of funding for Central Public Sector Enterprises (CPSEs), Central Public Sector Undertakings (CPFIs), Central Public Financial Institutions (CPFIs) and other government organizations.

The Bharat Bond ETF will be a basket of bonds(all AAA-rated bonds initially) issued by CPSU/CPFI/CPSE/ any other government organization bonds.
Features of Bharat Bond ETF: Transparent portfolio(website will update daily), Transparent Net Asset Value(NAV), small unit value capped at Rs 1,000, low cost (0.0005%) and tradable on exchange.
Each ETF will have a fixed maturity period, as of now 2 maturity options of 3 and 10 years will be provided.
To date, the government has launched two equity ETFs with good success rate, the first in 2014 and the second in 2017.

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