Know about Bharat ETF Bonds…
(1) They are associated with fixed deposits in the bond market. Edelweiss Global Investment Advisors says it will be cheaper for retail investors to buy units of ETFs than bonds. Asset management company will charge only 0.0005 per cent as management fees. In simple words, there will be a fee of only one rupee on an investment of Rs 2 lakh, but the asset management company hopes to add 3 lakh investors through this fund. It will be open till 20 December.
(2) Bharat Bond ETF is a simple fixed income product. Here an average investor can keep his money with full confidence. It is easy to estimate its returns. The income from this will not be tax-free, but it will get the benefit of indexation.(How much profit will be earned against FD (Understand through graphics)
(3) In other words, inflation will be adjusted in the return. Retail investors can start investing in new funds from Rs 1,000. Investors who do not have demat can invest through the Funds of Funds scheme.(4) This scheme will invest in ETFs. There is a plan to raise Rs 15,000 crore through the issue. There is also an option of over-allotment of Rs 8,000 crore. It has been specifically designed keeping long-term investors in mind.
(5) Bharat Bond ETF will invest in around 15 CPSEs. Investment in any one bond will not exceed 15 percent. Bharat Bond ETF offers two investment options of three-year and 10-year fixed maturity periods.
Let's know the answers to all the questions related to this …
(1) Question: What is the minimum amount of money required?
answer: At least investors can invest Rs 1,000 in Bharat Bond ETF. After this, you can invest in multiple of Rs 1,000. Let me tell you that money can be invested till December 20.
(2) Question: For how many years do you have to invest money?
answer: An investor can invest for 3 years and 10 years. On completion of 30 days from the date of allotment or before it, the investment load will be 0.10%. However, there will be no charge for redemption / switching on completion of 30 days.
(3) Question: Will there be more money in India bonds than FDs?
answer: Anand Rathi Wealth Management Deputy CEO Feroze Aziz says that if a small investor wants, India can invest in ETF bonds. It is expected to get better returns than FD. Because the situation of banks is also not much. At the same time, this ETF includes many large AAA rated government companies of the country.
Feroze Aziz says that any investor in FD can lock in only 5 years of interest. While 10 years of interest can be locked in this bond.
(4) Question: How much tax to pay?
answer: This bond ETF is taxed like a debt mutual fund. That is, if the investment is kept for more than three years, then there is a tax of 20 percent with indexation benefit. At the same time, this tax on FD becomes 30 percent.
Suppose if you invest one lakh rupees, then you get a return of 7.58 percent on it, then in 10 years your money will increase to Rs 2,07,642.
Then on this you will have to pay Rs 7,836 as tax. In this case, you will get Rs 1,99,806. That is why experts Bharat Bond ETF is more beneficial in terms of tax in the long term. This is a good option for Conservative debt fund investors.
(Understand through graphics how much tax you have to pay)
(5) Question: What's in it for small investors?
answer: The management of this ETF is at Edelweiss AMC. It has also launched 'Fund of Fund' (FOF) for this fund. This will allow retail investors to invest like normal mutual funds. For small investors, this FOF is better in terms of convenience and liquidity.
Bharat Bond ETF has a maturity period of 2023 and 2030. In this context, it can be compared with fixed maturity plans and banking and PSU funds. Bond ETFs have a much lower cost compared to debt mutual funds.
The bonds included in the index will be re-balanced on a quarterly basis. Bharat Bond Fund of Fund has been launched for investors who do not have demat account. The investment in each bond shall not exceed 15 percent of the index.