The funds raised through the debt ETF helps in smoothening borrowing plans of the participating CPSEs or public sector banks
In December, 2019, Bharat Bond ETF mobilised Rs 12,400 crore
ETFs are similar to index funds, except that these may be bought and sold on the exchanges. They're preferred by institutional investors
Its objectives are clear. But the reality in recent years has not cooperated with the government's plans
Instead of just focusing on earning brokerage selling ETFs, broking houses are also considering packaging multiple ETFs as part of a more customised advisory service offering multiple asset exposure
Last month, the ETF saw an oversubscription of 1.7 times, garnering Rs 12,000 crore which is likely to be utilised for capital expenditure (capex) of PSUs.
The funds raised would be utilised for capex of PSUs. The base size of the issue was Rs 7,000 crore
Fund could later look at instruments rated below the top-grade, if there is demand
This ETF is an initiative of the department of investment and public asset management and the latter has given the mandate to Edelweiss AMC to design and manage the product
Holding them till maturity will take care of interest-rate and liquidity risks that may exist
Bharat Bond ETF will be made of AAA-rated papers issued by govt-linked firms