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Bharat Bond Exchange

Posted on : 09 Dec 2019

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  • The Union cabinet cleared Bharat Bond ETF, India’s first exchange-traded fund housing corporate bonds issued by state-run companies.
  • ETFs invest in a basket of securities representing an index, security or commodity, and are traded on the stock exchange like any listed security. The Bharat Bond ETF will be managed by Edelweiss Mutual Fund.
  • In 2014, the government had launched the first equity-based ETF.
  • Under regulations issued by the Securities and Exchange Board of India, every ETF must have at least eight companies, and no single issuer can have more than 15% weight in the fund.
  • The ETF will include mostly AAA-rated bonds such as those issued by REC Ltd, National Highways Authority of India, NHPC Ltd and NTPC Ltd.

About Exchange Traded Funds

  • Exchange Traded Funds (ETFs) are mutual funds listed and traded on stock exchanges like shares.
  • Index ETFs are created by institutional investors swapping shares in an index basket, for units in the fund.
  • Usually, ETFs are passive funds where the fund manager doesn’t select stocks on your behalf. Instead, the ETF simply copies an index and endeavours to accurately reflect its performance.
  • In an ETF, one can buy and sell units at prevailing market price on a real time basis during market hours.

Article Related Questions

  1. With reference to Exchange Traded Funds, consider the following statements
    1.Exchange Traded Funds (ETFs) are mutual funds listed and traded on stock exchanges like shares.
    2.In an ETF, one can buy and sell units at prevailing market price on a real time basis during market hours.
    Which of the following statement is/are correct?

  2. 1.1 only

    2.2 only

    3.Both 1 and 2

    4.Neither 1 nor 2

    Right Ans : Both 1 and 2


  3. The 1857 Uprising was the culmination of the recurrent big and small local rebellions that occured in the preceding hundred years of British Rule. Elucidate (Answer in 150 words) - 2019 Mains


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