Bharat Bond ETF should be avoided currently and one can consider buying it later at a cheaper price from the stock exchange when the bond yield increases to more than 8%. Right now just invest in any Liquid Debt Mutual Fund.
What is Bharat Bond ETF?
ETF stands for Exchange Traded Fund and one can simply buy/sell them on NSE/BSE like any other listed shares. This ETF will be India’s first corporate Bond ETF which will be invested in AAA PSUs. It has two variants – one will mature in 3 years (appx. 6.6% p.a.) and the other one in 10 years (appx. 7.5% p.a.)
Reason for avoiding –
Currently, bond yield is 6.7% p.a. which is very low and I expect it will increase in the coming years. If you invest right now in this ETF then you will end up getting a lower return when the bond yield increases.