The Wealth Blog

Government of India Recently Took an Initiative and Launched Bharat Bond ETF.Today We Are Going to See All the Details of Bharat Bond ETF and How to Invest in It.So Let’s Get Started…What Is Bharat Bond ETFFirst of All What Is ETF?ETF Is Exchange Traded Funds. These ETFs Are Traded on Stock Exchanges like NSE and BSE Just like Stocks. ETFs Are Almost like Mutual Funds.Little Confused? Let Me Explain. ETFs Invests Your Money in Basket of Stocks Just like Mutual Funds but unlike Mutual Funds, You Can Trade ETFs on Stock Exchanges. In Simple Words, You Can Call that ETF is a Baby of Mutual Fund and Stock.Bharat Bond ETF Is a Debt ETF Fund. It Is an Initiative by Government of India. It Is Open-Ended and Tracks the Returns Provided by Nifty Bharat Bond Index.Bharat Bond ETF Invests Your Money in “AAA” Rated Public Sector Bonds(for Example, IRFC, NABARD, NHAI, NHPC, NTPC, REC, PFC, Power Grid Corp, and SIDBI).Bharat Bond ETF Has a Fixed Maturity Period.It Follows the Nifty Bharat Bond ETF Index.It Invests in High Quality “AAA” Rated Bonds of Public Sector Companies.It Holds the Bonds till Their Maturity and Reinvests the Coupons Received.It Invests 5% of Its Allocation towards G-SEC/TREPS to Manage Liquidity.Bharat Bond ETF is Managed by Edelweiss Asset Management Limited.Why Invest in BHARAT Bond ETF?Advantages 👍🏻 :Higher Safety: As the Investment Is Done in ‘AAA’ Rated Public Sector Bonds, Risk Is Very Low.
Low Cost: Management Fees of Bharat Bond ETF Is 0.0005% per Annum.No Lock-In: ETFs Are Listed in Stock Exchanges so You Can Buy and Sell Them Anytime.Diversification: This ETF invests in Many Bonds so if any company defaults, the Risk of Losing Investment is very low.Stability and Predictability: A Bond-like Structure with Fixed Maturity Provides Predictable and Stable Returns at MaturityTransparency: Daily Disclosure of Portfolio Constituents and Live Nav Periodically through the DayTaxation:If You Hold This Bond for More than 3 Years Then the Ltcg Tax Will Be Applicable (20%) on Profit but You Will Get Indexation Benefit.If You Hold This Bond for Less than 3 Years Then Stcg Tax Will Be Applicable as per Your Incom Tax Slab.Disadvantages 👎🏻 :Unlike Mutual Funds, to Buy Bharat Bond ETF You Will Need a Demat Account.Liquidity Risk: If You Want to Sell Your Bonds on Stock Exchanges There Can Be Some Liquidity Problems.Bharat Bond ETF ReturnsThere Are ‘NO’ Assured Returns. During the Investment Period, the Value of Investments Can Go Up Or Down Depending on Market Conditions and Are Dependent on Interest Rates Movements in the Economy.However, If You Stay Invested till Maturity of the ETF Then Return Can Be in Line with the Yield of the Portfolio at the Time of Investments.How to Invest in Bharat Bond ETFWe Can Invest in Bharat Bond ETF via 3 Methods.NFO(New Fund Offer) – Minimum Investment – ₹ 1000We Can Invest in the Bharat Bond through the NFO Period. Around 25% of the Subscription Is Reserved for Retail Investors and the Rest 75% Is Reserved for Other Categories of Investors.From Stock Exchanges (NSE)If the NFO Period Is over, We Can Buy and Sell Them during Market Hours. For This, We Will Need a Demat Account.
FOF(Fund of Funds) – No Demat Account Required
In Case You Don’t Have a Demat Account, You Can Invest in Bharat Bond FOF (Fund of Funds).
Conclusion:Okay Okay, Om, I Understood Everything but Just Tell Me, Should I Invest in Bharat Bond ETF or Not?
In My Opinion, If You Want to Diversify Your Portfolio and Planning to Invest in Bond Then You Should Definitely Invest in This Bond.
Otherwise, It’s Not Recommended as You Can Get Better Returns in Other Investments like Index Funds.
Note: Mutual Fund Investments Are Subject To Market Risk, Please Read All Scheme Related Documents Carefully Before Investing.

What Is Index Funds | How to Invest in Index Fund | Types of Index Funds

If You Had Invested ₹10,000 in Nifty Index Funds in 1995 Your Investment Would Have Been Grown 10x to ₹ 1,00,000.

Yes, That’s Right, You Could Have Made 10x Your Investment Just Buy Doing Nothing, No Stock Research, No Balance Sheet Checking Nothing.

So Now You Must Be Wondering that What Is an Index Fund and How Can You Invest in It Right?

That’s What We Are Going to Learn.

“By periodically investing in an index fund, the know-nothing investor can actually out-perform most investment professionals,” Warren Buffett

So Buckle up and Let’s Get into It.

What is Index Funds?

As the Name Suggests Index Funds Are the Mutual Funds That Invest in an Index.Whatever You Invest in Index Funds Is Directly Invested in Companies that Are Selected on that Particular Index.

If You Invest in Nifty Index Fund Then You Will Get Almost Same Return as Nifty.

Index Funds Are Passive Funds So Expense Ratio Will Be Low.

To Learn More about What Is Is Index Fund We Need to Know about What Is Index.

What Is Index?

An Index Is Something That Derives Their Value from Selected Companies.

For Example, Nifty50(Commonly Known as Nifty) Gets Its Value from India’s Top 50 Companies.

It Helps Us to Easily Track the Movement of the Stock Market.

Types of Indexes

Nifty50

Nifty100

Nifty Next50

Sensex

Bank Nifty

Nifty Alpha 50 And Many More.

Why Should We Invest in Index Funds?

* Investing in Index Funds Helps Us to Get Exposer in Top Companies.

* It Also Helps in the Diversification of Our Portfolio.

* Liquidity Is Also High in These Funds. You Can Withdraw Your Investment Anytime from Index Funds.

* Fees Are Also Low Compared to Other Mutual Funds.

* If You Are a Beginner in Stock Market and Don’t Know Much About It Then You Should Start by Investing in Index Funds. It Will Lowers Your Risk and Gets a Steady Return.

* No Need to Worry about Stock Research and Company Financials. Just Invest and Forget about It.

* If You Invest ₹10,000 Every Month for the Next 30 Years, You Can Get a Return of More than Rs 2 Crore!*

Difference between Index Funds and Index ETFs

There Are Two Main Differences between Index Funds and Index ETFs.

* Expense Ratio (Read as Charges) on Index ETFs Are Lower than Index Mutual Funds.

* You Need a Demat Account to Invest in Index ETFs Whereas You Do Not Need Any Demat Account to Invest in Index Mutual Funds.

* There Are So Many Index Funds Available in the Market.

How to Invest in Index Funds

Investing in an Index Fund Is the Same as Investing in Mutual Fund. You Can Use Any Platform That Allows You to Invest in Mutual Funds.

You Just Need PAN Card to Start Investing in Index Fund.

Conclusion

If You a Working Professional and Want to Invest in the Stock Market to Grow Your Wealth and Be Part of the Country’s Development Then Index Fund Is the Best Options for You.

Index Fund Is One of the Safest Options in the Stock Market. It Is Made up from Top Companies So Risk Is Very Low.