BHARAT 22 ETF FFO 2 Opens For Subscription On 3rd October

BHARAT 22 ETF FFO 2 Opens For Subscription On 3rd October

BHARAT 22 ETF FFO 2 Details

The government plans to launch the fourth tranche FFO scheme on October 3, 2019. The name of FFO is BHARAT 22 ETF FFO 2. The Further Fund Offer 2 is open-ended exchange-traded fund investing in S&P Bharat 22 Index. The offer should manage by ICICI Prudential Mutual Fund. As of the reports, the offer opens for anchor investors on 3rd October and on 4th October for non-anchor investors.

Bharat 22 ETF had one of the largest new fund offers in the history of the Indian mutual fund industry. The offer is suitable for investors who are seeking long term wealth creation.

According to the draft papers, the scheme should follow the free-float market capitalization method.

The exchange-traded fund is a type of fund in mutual funds. Generally, ETFs should track an underlying index. These can be easily bought or sold like any other stock on the exchange. The minimum investment of the ETF is one unit. 

Basic Details of BHARAT 22 ETF FFO 2

 Type  An Open-Ended Exchange Traded Fund investing in S&P BSE Bharat 22 Index
 FFO 2 Period  Anchor Investor: October 3, 2019, | Non-Anchor Investor: October 4, 2019
 Entry/ Exit Load  Nil
 Underlying / Benchmark  S&P BSE Bharat 22 Index
 Listed At   BSE and NSE

The underlying index of the scheme is S&P BSE Bharat 22 Index. Entry and Exit loads do not apply to the issue.

Objects of the Issue

The primary objective of the issue is to invest in constituents of the underlying index in the same proportion as in the underlying index, and endeavor to provide returns before expenses, which closely correspond to the total returns of the underlying Index.

All categories of investors are eligible for subscribing to the scheme. It allows retail investors, retirement funds, qualified institutional investors, non-institutional investors to invest in this scheme.

Minimum Investment:

As of the Sebi norms, the minimum subscription amount is different for each category of investors.

Anchor Investors (Qualified Institutional Buyers or Retirement
Funds applying during the Anchor Investor FFO): 

Anchor Investors can invest with the minimum application amount of Rs. 10,00,00,000 and in multiples of Re. 1 thereafter.

Retail Individual Investors:

Investors in this category can invest with the minimum investment amount of Rs. 5,000 and in multiples of Re.1 thereafter, subject to a maximum investment amount of Rs. 2,00,000.

Retirement Funds:

Investors in this category can invest with a minimum investment amount of Rs. 2,00,001 and in multiples of Re. 1 thereafter.

QIBs:

Investors in this category can invest with a minimum investment amount of Rs. 2,00,001 and in multiples of Re. 1 thereafter.

Non-Institutional Investors:

This category of investors can invest a minimum of Rs. 200,00 and in multiples of Re. 1 thereafter.

Assets Allocation Pattern:

Instruments  Indicative allocations (% of total assets)

Maximum-Minimum

 Risk Profile

High/Medium/ Low

 Securities of companies constituent the underlying index  100%  95%  Medium to High
 Units of Liquid/Money Market Mutual Fund schemes, Money Market instruments (with a maturity not exceeding 91 days), including TREPs, cash and cash equivalents.  5%  0%  Low to Medium

Reasons to invest in BHARAT 22 ETF

The fund offers an attractive dividend yield and reasonable valuations. It uses the free-float market capitalization method. Moreover, it has a highly liquid index. Diversified Exposure to leaders across 6 sectors describing an equilibrium between stability and growth is another reason to invest in the scheme.

Disclaimer: This post is just information about the scheme. It does not give any advice or recommendation. Mutual Fund investments are regulated to market risk. Please read the offer document carefully before investing.

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