Investors are going to get a new option, know why you should invest your money

The Central Government has released the fourth installment of India’s first Corporate Bond Exchange Traded Fund (ETF) on 2 December. The latest Bharat Bond ETF is maturing in April 2023. Subscription will be allowed in these new ETFs till 8 December. Edelweiss AMC is managing the Bharat Bond ETF. Since 2019, the government has launched a series of Bharat Bond ETFs. The government has got to see strong demand for this. Because there are many benefits in these. Let us know five such reasons, after reading which you would like to subscribe to the fourth installment.

higher returns

The gross yield in Bharat Bond ETF is 7.5 per cent. Apart from this, the tentative net of tax yield is around 6.9 per cent.

stability and security

Maturity is fixed in this. It is issued by public sector companies with AAA rating. It offers stable returns with low credit risk.

Liquidity

You can buy or sell it at any point of time through the exchange or AMC in a specified basket size. Edelweiss has also come up with Bharat Bond FoF. With its help, retail investors can enter or exit just like mutual funds.

better on the tax front

It has better tax treatment than traditional investment options. It is taxed only at the rate of 20 per cent. This does not include surcharge.

Low Price

The expense ratio of the ETF is very low at 0.0005 per cent.

Let us tell you that under the fourth installment, the government has proposed to raise an initial amount of Rs 1,000 crore with a green shoe option of Rs 4,000 crore, that is, the option to keep it if there is a higher bid. In December last year, the government released the third tranche with an initial issue amount of Rs 1,000 crore. The issue was subscribed 6.2 times.

Tuhin Kant Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM), under the Ministry of Finance, said that since the launch of Bharat Bond ETF, it has received an encouraging response from all categories of investors. Bharat Bond ETF invests only in AAA rated bonds of public sector companies. Bharat Bond ETF gives you the benefits of a mutual fund, ETF and a bond.