Edelweiss Asset Management will launch the third tranche of Bharat Bond ETF and Fund of Fund with the target to raise ₹1,000 crore. The issue is open for subscription during December 3-9. The Bond ETF and FoF, an initiative of the Government, mature on April 15, 2032.

The ETF will invest in constituents of the Nifty Bharat Bond Indices, consisting of AAA-rated public sector companies. The FoF with similar maturities will also be launched for investors who do not have demat accounts. The Bharat Bond ETF AUM stood at ₹36,359 crore at the end of October 2021.

Tuhin Kanta Pandey, Secretary, DIPAM, Ministry of Finance, said the Bharat Bond ETF programme has provided aggregate savings in borrowing cost for participating CPSEs/CPSUs/CPFIs and given retail investors easy access to bond markets. Further, adequate liquidity on the exchange is encouraging investor participation and helping to deepen the bond markets. The organic increase in AUM of existing Bharat Bond ETFs in the last two years reflects investor confidence in the product, he said at a press conference on Wednesday.

Post the launch of Edelweiss Bharat Bond ETF in 2019, the total AUM for the passive debt category has grown to about ₹50,000 crore as of October.

Radhika Gupta, CEO, Edelweiss Mutual Fund, said about 20 new passive debt funds have been filed and nine passive debt funds have already been launched by different AMCs post the launch of Bharat Bond ETF in December 2019. The total AUM of this category has reached about ₹50,000 crore as of October 2021 and Edelweiss AMC has over 80 per cent market share. With the new launch, the Bharat Bond ETFs have five maturities on the yield curve — 2023, 2025, 2030, 2031 and 2032, which will help investors to choose according to their needs.