Cabinet approves India’s first Bharat bond ETF

India’s Union Cabinet has approved the creation and launch of a Bharat bond ETF, the first of its kind in the country.

It will be an additional source of funding for central public sector undertakings (CPSU), central public sector enterprises (CPSE), central public financial institutions (CPFI) and other government organisations.

The ETF is set to have a fee of 0.0005% and will be comprised of AAA related bonds issued by CPSEs, SPSUs and CPFIs.

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The Bharat bond ETF will be structured to have two maturity series, three and ten years where each series will have a separate index for the respective maturities.

With a minimum investment of Rs 1,000, the equivalent of just over £10, the Cabinet hopes it will provide cheap and easy access to the bond market for retail investors.

ETF promoters have been significantly active in 2019 having launched products offering exposure to India’s equity market including the likes of BetaShares, ETF Securities and Franklin Templeton.

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