Should you invest in Bharat Bond ETF?
Morningstar 9 June 2020 A reader asked us about Bharat Bond ETF 2023 and 2030, citing their “fantastic annualized returns”. He wanted to invest Rs 25 lakhs for a duration varying between 4 to 12 months. Our response. When looking at fund returns, consider ‘Absolute Returns’ for investment periods less than 1 year, annualized returns for longer time periods. Also, remember that returns rarely follow a straight line, the only exceptions being funds such as Overnight Funds and Liquid Funds. The Bharat Bond ETF April 2023 and April 2030 are Exchange Traded Funds (ETFs) that invest and replicate the NIFTY Bharat Bond index of the respective maturities. The index comprises of AAA-rated Public Sector Undertakings (PSUs). The index constituents, and thus the fund holdings, are constituted such that they are run with a target maturity date of April 2023 and April 2030, respectively. i.e. the bonds mature around the given maturity date of the ETF (before not after). ...