Will Bharat 22 ETF gain favour with retail investors?
Second tranche of Bharat 22 ETF, which has 22 scrips as its constituents, opens today for retail investors. The follow-on fund offer (FFO) could add over Rs 6000 crore to government coffers
Second tranche of Bharat 22 ETF, which has 22 scrips as its constituents, opens today for retail investors. The follow-on fund offer (FFO) could add over Rs 6000 crore to government coffers. It remains to be seen whether it attracts subscriptions after its underwhelming performance since launch last year. The ETF launched on June 19 for institutional investors, and subscribed 3.44 times to the tune of Rs 5,163 crore.
Value Research Founder Dhirendra Kumar told ET Now that Bharat 22 ETF was a combination of 60 percent relatively superior quality PSUs and 40 percent private companies which are relatively out of favour. Bharat ETF covers sectors include Basic Materials (5.47%), Energy (18.44%), Finance (20.55%), FMCG (15.32%), Industrials(19.82%) and Utilities (20.40%). The scheme offers diversified exposure to leaders across 6 sectors representing balance between stability and growth.
Bharat 22 ETF can't invest more than 15 percent in one particular stock and 20 percent in a single sector. L&T, ITC, SBI, AXIS bank, NTPC, Power Grid Corp of India, ONGC, Coal India, GAIL and NALCO are the top constituents of the ETF. ICICI Prudential AMC manages the Bharat 22 ETF Index.
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The scheme invests in constituents of the underlying Index in the same proportion as in the underlying index. The FFO is part of government's disinvestment program announced by the Department of Investment and Public Asset Management (DIPAM), Ministry of Finance.