What makes Bharat Bond ETFs a good option for buy-and-hold investors

Holding them till maturity will take care of interest-rate and liquidity risks that may exist

The Union Cabinet has given its go-ahead for the launch of India’s first corporate bond exchange-traded fund (ETF). It will be called Bharat Bond ETF and will consist of AAA-rated papers issued by government-backed companies. Edelweiss Asset Management will manage the first tranche.

The base size of the issue will be Rs 7,000 crore and it will be extendable to Rs 15,000 crore. Two ETFs – one investing in three-year paper and the other investing in 10-year paper – will be launched. A fund-of-fund option will also be made available.

The ETFs will have a target maturity structure, not an