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Should You Invest in Bharat 22 ETF? Research Team | Posted On Monday, November 13,2017, 06:05 PM

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Should You Invest in Bharat 22 ETF?



Bharat 22 ETF will be open for subscription to anchor investors on November 14th. You and other retail investors can invest in the Bharat 22 Exchange Traded Fund (ETF) from November 15th to November 17th. The Government plans to raise Rs 8,000 Crores this week by divesting its holdings in 22 Companies.

You need to understand Bharat 22 ETF before investing in it. The Bharat 22 ETF is an exchange traded fund which will invest in 22 stocks from CPSE, SUUTI and PSU Banks listed on BSE. Bharat ETF will have 19 public sector Companies. Bharat 22 ETF tracks the S&P BSE Bharat 22 Index.

So what is an ETF? An exchange traded fund also called ETF, is a security which tracks an index, a commodity or even a basket of stocks. An ETF trades like a stock on an exchange. ETF's track a particular index and this means lower operating expenses than actively invested mutual funds. You also enjoy the benefit of diversification (You invest across sectors), if you invest in Bharat 22 ETF.

ETFs can give very good returns on investment. Want to know more on mutual funds and ETFs? We at will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. is not a seller of any financial products. We only provide FREE financial advice / education to ensure that you are not mis-guided while buying any kind of financial products.

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Should You Invest in Bharat 22 ETF?

Bharat 22 ETF is a well diversified ETF. It spans 6 sectors. It invests in basic materials, energy, finance, industrials, FMCG and even utilities. The weightage of each individual stock in the index is capped at 15%. The weightage of each sector is capped at 20%.

You need a demat account to invest in Bharat 22 ETF during the NFO. There is no entry/exit load. Bharat 22 ETF has hardly any fund running expense. The expense ratio is up to 0.0095% for 3 years from the date of listing of units of Bharat 22 ETF.

You and retail investors can invest a minimum amount of Rs 5000 in the NFO of Bharat 22 ETF and in multiples of 1 thereafter up to INR 2 Lakhs.

SEE ALSO: Invest with the power of Bharat-22

Which Companies come under Bharat 22 ETF?

You have ITC, SBI, Power Grid Corporation, Axis Bank, NTPC, ONGC, GAIL, IOC, BPCL, NALCO, Coal India, Bharat Electronics Ltd., Engineers India Ltd., Bank of Baroda, REC, NHPC, PFC, NBCC, NLC India, Indian Bank, L&T and SJVN which come under Bharat 22 ETF.

Why invest in Bharat 22 ETF?

If you or retail investors invest in Bharat 22 ETF during the NFO period, you get a 3% discount. About 16 of the 22 Companies in the Bharat 22 ETF are Maharatna, Miniratna-I and Navratna companies. ICICI Prudential AMC will manage the ETF. Asia Index will be the index provider. Bharat 22 ETF will be rebalanced annually.

After demonetization, citizens are shifting their investments from traditional investment options like gold, real estate and FD's to mutual funds. Bharat 22 ETF has a lower Price-to-Earnings and Price-to-Book value than the BSE Benchmark Sensex and the NSE Nifty 50. Bharat 22 ETF can be a good long term investment.

The Government wants you and other investors to enjoy India's growth story. The constituents of Bharat 22 ETF capture various reforms and initiatives of the Government like financial inclusion, digital, cashless, Make in India and GST.

SEE ALSO: Aadhaar Card Check Online

Tax benefits of investing in Bharat 22 ETF

Bharat 22 ETF is taxed just like equity shares or equity mutual funds. If you stay invested in Bharat 22 ETF for less than a year, your profit/gains are short term capital gains (STCG). These are taxed at 15% + surcharge + cess. If you stay invested in Bharat 22 ETF for more than a year and then sell, your gains are long term capital gains (LTCG). LTCG is tax free.

Bharat 22 consists of large cap, dividend paying Companies. The Government is offering a discount to retail investors. This could be a good investment for beginners in the stock market, who are willing to stay invested for the long term. Be Wise, Get Rich.

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