What is bharat bond ETF
Exchange trade funds (ETF) these funds are trade on stock exchange.
Eg:- Bombay stock exchange and National stock exchange.
These funds are similar like mutual funds as mutual funds raised money from companies, institutions, public and invest in stocks and Debt security. Similarly ETF also work and invest money in securities following an index.
Example:- Nifty ETF, Gold ETF, DEBT ETF.
BHARAT BOND
Bharat bond is a debt ETF it invest in AAA Rated bonds of public sector enterprise.
Invest in REC, NHAI, HPCL, this type of bond of public sector companies.
HOW THE INVESTMENT HELD IN BOND OF THESE COMPANIES?
- Bond maturity period linked to ETF maturity. So when ever the ETF will become mature you can withdraw your money.
To maintain liquidity 5% money is invested in government securities.
Bharat bond ETF is managed by Edelweiss Asset Management Company.
Let's know how we get return?
You will not get quarterly or Annual return here what ever return you will get will be re-invested in same bond. So it work as growth funds so you will get lump sum amount at you maturity period.
Let's see that how much indicative return we can get.
INDICATIVE RETURN
1) short term [5-yeats]~5.43%
2) Long term [11-years]~6.83%
ADVANTAGES
1) Higher Safety.
2) Stable &predictable return.
3) Low cost -0. 005%.
4) No lock-in period.
5) Risk Diversification.
6) Taxation Benefits.
Long term capital gain tax more than 3years is 20%.
Indexation benefit
Short time capital gain tax less for less than 3 years.
DIFFERENCE IN MUTUAL FUNDS &ETF.
Mutual funds .
-Invest through apps and website.
-market price on exchange.
Exchange trade funds (ETF) .
-To invest demat account is necessary.
-Sell on close NAV price.
Bond price increases or decreases due to demand and supply which depends on current intrest rate.
If intrest rate is low then rate is high and if intrest rate is high then rate is low.
If you have any questions related to this you can ask in comment section.
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