The Union Finance Minister Shri Arun Jaitley announced a new Exchange Traded Fund (ETF) by the name BHARAT 22.
Bharat 22 consists of 22 stocks of CPSE's, PSB's & strategic holding of SUUTI .
Compared to energy heavy CPSE ETF, Bharat 22 is a well diversified portfolio with 6 sectors (Basic Materials, Energy, Finance, FMCG, Industrials & Utilities).
The Bharat 22 Index will be rebalanced annually. ICICI Prudential AMC will be the ETF Manager and Asia Index Private Limited (JV BSE and S& P Global) will be the Index Provider.
In the Budget Speech of 2017-18, the Finance Minister Shri Arun Jaitley had promised to use ETF as a vehicle for further disinvestment of shares.
The target for CPSE’s disinvestment in 2017-18 was set at INR 72,500 crore. During the current Financial Year 2017-18, the Government has realised approx INR 9,300 crore through nine disinvestment transactions so far.
Globally ETF Assets have grown significantly.
Globally today there are 4 trillion dollar worth Assets Under Management (AUM).
These are expected to touch $7 trillion by 2021.
Large Investors (Sovereign/Pension Funds) prefer investing in ETFs due to the benefits of ETF being Low cost & Less risky; being Highly Liquid assets; Transparent Investment and that these can be traded at Real Time Market Price
Highlights of Growth of ETF market in India- Flexibility in Investment guidelines of PF to invest in equity/ETF
- ETF Assets Under Management (AUM) has grown ∽5 times in last 3 years
- ETF has been a preferred instrument for investment by PF's following flexibility given to them by govt. for their investments.
- Government raised INR 8500 crore by divesting through CPSE ETF in FY'16-17.
