4-Aug-2017: New Exchange Traded Fund (ETF) by the Name “BHARAT 22”

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 Rs 72,500 crore. During the current Financial Year 2017-18, the Government has realised approx. Rs 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 include:
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 Rs.8500 crore by divesting through CPSE ETF in FY'16-17.