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The fourth tranche of Bharat Bond ETF, India's first corporate bond exchange-traded fund (ETF), is set to be launched tomorrow, Edelweiss Mutual Fund, said. The fund house, which manages the ETF, said that the new fund offer or NFO will open on December 2 and close for subscription on December 8. Bharat Bond ETF invests only in AAA-rated corporate bonds issued by state-run companies.

Bharat Bond ETF NFO - Key details here

Bharat Bond ETF is an Exchange Traded Fund which has a fixed maturity tenure and invests your money in bonds of public sector companies. It invests in bonds which have similar maturities as that in the underlying index.

The latest Bharat Bond ETF tranche will track the Nifty BHARAT Bond Index - April 2033 by investing in bonds of AAA-rated CPSEs/CPSUs/CPFIs and other Government organizations.

The minimum investment per application is Rs. 1,001 and in multiples of Re. 1 thereafter, for retail investors and Rs. 2,00,001 and in multiples of Re. 1 thereafter for institutional investors.

Through the latest tranche, Edelweiss Mutual Fund plans to raise at least 1000 crore, with a greenshoe option to retain an additional 4,000 crore.

This series will mature in April 2033 and offer a yield-to-maturity of 7.50%, the fund house said.

The first offering of the ETF was launched in late 2019.

However, there is no lock-in period as Bharat Bond ETFs are traded on stock exchanges. They can be bought/sold during the tenure of the fund, subject to liquidity of the fund.

The latest ETF will include papers issued by National Bank for Agriculture and Rural Development, National Highways Authority of India, Power Finance Corp and NTPC among others.

Bharat Bond Index April 2033 constituents
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Bharat Bond Index April 2033 constituents

Edelweiss, which designs and manages ETFs on behalf of the government, has so far launched ETFs through three tranches with total assets under management of over 50,000 crore.

In the last one year, these ETFs have generated returns in the range of 2% to 4% as on Nov. 30, the fund house said.

Fund managers have said returns on debt schemes have been impacted this year due to aggressive rate hikes from the central bank. (With Agency Inputs)

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