All you need to know about Bharat 22 ETF

The ETF will invest in 22 stocks from CPSE, SUUTI and PSU Banks listed on BSE of which 19 will be public sector companies

LATEST NEWS  : The 'Bharat 22' Exchange Traded Fund (ETF) is all set to open for anchor investors on November 14, while subscription for retail investors would begin from November 15 and continue till November 17.

The ETF is expected to mop up over Rs 8,000 crore for the government, helping the government meet its ambitious Rs 72,500 crore disinvestment target for the current fiscal.

The ETF will invest in 22 stocks from CPSE, SUUTI and PSU Banks listed on BSE of which 19 will be public sector companies.

The first CPSE (Central Public Sector Enterprises) ETF, which was launched in March 2014 consisted of scrips of 10 PSUs - ONGC, Coal India, IOC, GAIL (India), Oil India, PFC, Bharat Electronics, REC, Engineers India and Container Corporation of India. The government has raised Rs 8,500 Cr through CPSE ETF route last fiscal.

All you need know about the ETF:

1. An ETF is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. It provides diversification to investors and is cheaper than investing in a fund. Most ETFs track to a particular index and therefore have lower operating expenses than actively invested mutual funds. Thus, ETFs may improve your rate of return on investments. In addition, ETFs have no investment minimums or sales loads, unlike traditional mutual funds, which often have both.

2. As part of the NFO, an upfront discount of 3% would be offered to all categories of investors. The expense ratio of BHARAT 22 ETF is up to 0.0095% for three years from listing of units of Bharat 22 ETF. Investors who hold a demat account can apply for units of the ETF during the NFO.

3. The state-owned companies or Public Sector Units (PSUs) that are part of CPSE as well as the Bharat-22  ETF include ONGC, IOC, BPCL, Coal India, Gail Bharat Electronics, REC, PFC, and Engineers India. The other central public sector entities on the list are, Engineers India, NBCC, NTPC, NHPC, SJVNL, GAIL, Power Grid, and NLC India.

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