About EBBETF0430 ETF
Bharat Bond ETF is India’s first corporate bond exchange-traded fund which invests in public companies run by the Government. It is a Target Maturity ETF that will primarily invest in instruments that comprise the Nifty Bond Index which tracks the performance of AAA-rated public sector bonds maturing in April 2030.
Why this Kristal?
Bharat Bond ETF is a first of its kind Fixed Income ETF in India. The launch of this innovative product is set to revolutionize the way Indians invest. This initiative addresses the structural problems with Indian Corporate Bond market by enabling retail investors to access corporate bonds in a transparent, safe and tax efficient manner with high liquidity.
All underlying bonds are AAA rated making it a safe investment avenue.
Minimum investment size for bonds is INR 10,00,000. However, Bharat Bond ETF enables an investor to gain exposure to a basket of bonds only for INR 1,000.
This dramatic reduction allows retail investors access to the Corporate bond market.
Debt mutual funds offer access to corporate bonds for an expense ratio of 0.32% to 1.15% p.a. This means fund manager is eating into your returns. Bharat Bond ETF, on the other hand, offers access to AAA rated bonds at an expense ratio of 0.0005%. This makes the instrument very cost efficient way of gaining exposure to corporate bonds.
Bond ETFs are more tax efficient as compared to Bonds because coupons from bonds are taxed at the investor’s applicable slab rate whereas, Bharat Bond ETF is taxed with the benefit of indexation. This significantly reduces the tax liability.
Recommended for: Ideal for investors looking to gain exposure to fixed income asset class with the objective of stable growth.
Asset Class: Fixed Income
When to buy?
Any investor whose goal is to earn a stable return of ~6-7% should invest in this ETF regardless of market timing.
Bharat Bond ETF with 2030 Maturity is expected to yield 7.58%