Bharat Bond Exchange-Traded Fund Likely To Hit Markets This Month

The Union Cabinet on Wednesday approved the launch of India’s first bond exchange-traded fund (ETF) which can be bought and sold like any listed security on the bourses. The ETF — Bharat Bond ETF — will be made of AAA-rated papers issued by government-linked companies to start with, and will come in two maturities — three and 10 years.

Sources say it could be launched in the first week of January. Edelweiss Asset Management will launch the first tranche, but there will be other tranches for which other asset managers may be appointed. A K Capital Services is the sole advisor to the government for the debt ETF.

This will attract retail customers to the bond market, a long-standing pipe dream of the government and the regulator, and will deepen the corporate bond market in the long run. Investors can buy a unit of the ETF for as low as Rs 1,000, the government said in a statement.