The Government on Monday announced the launched of the New Fund Offer (NFO) of Bharat 22, an open-ended Exchange Traded Fund (ETF), which is a part of the Government's overall disinvestment programme. The latest offering from the government is more diversified than the Central Public Sector Enterprise (CPSE) ETF, which was heavy on the energy sector. The ETF aims to bring Rs 8,000 crore to the government. The ETF will open for anchor investors on Tuesday and for non-anchor investors on November 15. "We believe the ETF offers an attractive long-term investment opportunity to partake in the India growth story by way of a diversified blend of companies spread across several sectors and are available at attractive valuation and a good subscription discount", ICICI Prudential AMC managing director and CEO Nimesh Shah said.
The fund aims to replicate the S&P BSE Bharat 22 Index, which will invest in 22 stocks in CPSE universe, stakes held under the Specified Undertaking of the Unit Trust of India (SUUTI) and Public Sector Banks (PSBs), mostly largecap companies across six sectors. Among non-anchor investors, retail investors can apply for Rs 5,000 and in multiples of Rs 1 thereafter up to Rs 2 lakh. Unlike actively managed funds, it has a very low expense ratio of up to 1 bps (1 bps=0.001 per cent).