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Bharat Bond ETF – April 2033 launches today: Should you buy?

Bharat Bond ETF - April 2033 by Edelweiss Mutual Fund comes with a tenure of a little below 11 years. It is a passively managed debt index fund that will invest your money in AAA-rated Government of India-owned companies.

December 02, 2022 / 10:25 AM IST

Edelweiss Mutual Fund is launching the fourth tranche of the Bharat Bond Exchange-Traded Fund (ETF) today. This fund is part of a growing breed of Target Maturity Funds (TMF) that the Rs 39 lakh crore Indian mutual funds (MF) industry has been launching for the past year or so. Bharat Bond ETF is a TMF with a twist.

What does it offer?
Bharat Bond ETF is a passively managed debt fund, which will invest your money in fixed-income earning securities. It consists of AAA-rated debt securities of government-owned companies looking to raise money from the public. It comes with a fixed tenure, after which the scheme matures and you - the investor- get your money back.

The scheme is different from a typical open-ended debt fund. Bharat Bond was conceived by the Department of Investment and Public Asset Management, which looks into the government’s equity stakes in companies and is in charge of divestment. The scheme has been devised to help government-owned companies borrow money for their requirements, preferably sizeably, instead of issuing several instruments over a period of time and also to bring down the cost of borrowing.

In 2019, Edelweiss MF won the bid to launch the Bharat Bond scheme series and has launched three tranches already so far.