The Union Government launched BHARAT-22 Exchange Traded Fund (ETF) managed by ICICI Prudential Mutual Fund targeting an initial amount of about Rs. 8,000 Crore.
Bharat 22 Index comprise of 22 stocks including those of central public sector enterprises (CPSEs), public sector banks (PSBs) and its holdings under the Specified Undertaking of Unit Trust of India (SUUTI).
ETF has been created Index S&P BSE BHARAT-22 INDEX. It is unique blend of shares of key CPSEs, Public Sector Banks (PSBs) and also Government owned shares in blue chip private companies. It is well-diversified ETF spanning six sectors — basic materials, energy, finance, industrials, FMCG and utilities with a 20% cap on each sector and a 15% cap on each stock.
The sector wise weightage in the Bharat 22 Index is basic materials (4.4%), energy (17.5%), finance (20.3%), FMCG (15.2%), industrials (22.6%), and utilities (20%). This combination makes the Index broad-based and diversified. It has retirement fund as separate category of Investors.
The banking segment includes stocks from State Bank of India (SBI), Axis Bank, Bank of Baroda (BoB), Indian Bank, Rural Electrification Corporation and Power Finance Corporation. The energy segment includes Oil and Natural Gas Corporation (ONGC), Indian Oil Corporation (IOC), Bharat Petroleum (BP), and Coal India.
The BHARAT-22 ETF is expected to benefit long term and retail investors by providing an opportunity of participation in equity stocks of Government run companies and earn stable returns. It will help to speed up Government’s disinvestment programme budgeted to raise a record Rs 72,500 crore in the FY 2018.
Exchange Traded Fund (ETF)
ETF is index funds that offer the security of a fund and liquidity of stock listed and traded on exchanges. Much like index funds they mirror the index, commodity, bonds or basket of assets. They are similar to mutual funds in a certain manner but are more liquid as they can be sold quickly on stock exchanges like shares. The ETFs trading value is based on the net asset value of the underlying stocks that it represents. Their price changes daily as they are traded throughout the day.