BHARATH BOND ETF - II

July 13, 2020

 

                                                  BHARATH BOND  ETF - II 

 

Bharath Bond ETF II is the second series of Exchange Traded Funds ( ETF) with the underlying asset as a Bond issued by Public Sector Undertakings. These are AAA rated bonds issued by institutions like Rural Electrification Corporation (REC), Indian Railways Finance Corporation (IRFC),NABARD, Power Finance Corporation (PFC), Powergrid, National Highways Authority of India (NHAI).

 

Investors have two options of two maturities ie five years maturing in April 2025, named as NIFTY Bharat Bond Index - April 2025 with a coupon 5.60 % per annum   or 11 years maturing in April 2031, named as NIFTY Bharat Bond Index - April 2031 with a coupon 6.75 % per annum.  

 

Pros :

 

1.It is an attractive rate considering the underlying bonds are AAA rated and govt backed.

 

2.It is an attractive rate esp the 11 year option, with the global interest rates moderating these bond yields could be highly valuable in times to come. 

 

3.In these uncertain environment, the best debt options you could possibly get. 

 

4.ETF provides the option of adequate liquidity as needed

 

Cons:

 

1.Only ETF mode means that the holders need a Demat account to subscribe to this issue. 

 

Our view : For retail investors with a view of 5 years or above, we would strongly recommend you to look at subscribing to the 11 years Nifty Bhararth Bond ETF II as it provides an attractive alternative to the current Fixed deposits and other securities of  a similar ( AAA rated Debt) profiles.

 

Offer Period : 14th July - 17th July

 

Risk Factors : Mutual Funds/ Exchange Traded Funds are subject to market risks and the outcome of the investment can change as per the market outlook. Please read the scheme related offer documents before investing. 

 

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