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Is Bharat-22 ETF a good bet? Here is a look at its pros and cons

Business Standard / 22 Apr 18 | 10:53 PM

The government is planning a follow-on offer of the Bharat-22 Exchange Traded Fund (ETF). ICICI Prudential Mutual Fund has filed draft papers. Here is a look at its pros and cons


Pros

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This ETF's year-to-date track record is poorer than that of Sensex and Nifty ETF (it was launched towards end November 2017). But this time span is too short to make any judgementIndex's back-tested long-term returns are attractive  Core sectors of the economy, like industrials, basic materials, energy and finance included. Can be used to capture the India growth storyExpense ratio is very lowIf the government offers a discount, as it did last time, the offer will become more attractive
Cons


A more concentrated ETF that could be more volatile More of a thematic, PSU-focused investment
What should you do?

May consider this ETF for your satellite portfolio, with allocation of 3-5 per cent of equity portfolioNot for new investors

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