Are there any assured returns in Bharat Bond ETF ? .

Are there any assured returns?

There are 'NO' assured returns. During the investment period, value of investments can go up or down depending on

market conditions, and are dependent on interest rates movements in the economy. However, if investors stay invested

till maturity of the ETF then return can be inline with the yield of the portfolio at the time of investments.

How is BHARAT Bond ETF different from Fixed Maturity Plan (FMP)?

Unlike FMP, BHARAT Bond ETF will be traded on exchange and investors can buy and sell units on exchange on real time

basis. Investors can also buy and sell ETF units directly through AMC, which is not possible in case of an FMP. One cannot

invest or redeem form FMP as it is a close ended structure unlike BHARAT Bond ETF which is an open-ended structure.

Unlike FMP, BHARAT Bond ETF can invest only in bonds which are eligible and part of the index and offers more

transparency.

What is the Index methodology?

The Index will follow below mentioned criteria for inclusion of issuers and their bonds:

Selection:

Issuers that are CPSEs/CPSUs/CPFIs and other Government organizations are eligible to be part of the Index. Bonds

issued by these issuers should be rated “AAA”. Further, issuers should have total outstanding of minimum Rs.

100 crores.

Weight Allocation:

Weight of bonds in the index will be based on total outstanding amount of each issuer. Single issuer weight will

capped at 15%.

Index Rebalancing:

Index will be rebalanced/reconstituted at the end of each calendar quarter.

What happens if any Security downgrades?

The fund and the index have a mandate to invest only in AAA rated securities only. If a credit downgrade

happens by any of the authorized rating agency approved by SEBI, then particular security will be removed from

the Index in next rebalancing.

Consequently, the ETF will also exit its investment from that particular security by selling it in the secondary

market depending on the nature of the downgrade. Any such downgrade in the issuer’s rating will be brought

to the attention of DIPAM.

For more questions regarding Bhart Bond ETF, Please refer to link