Bharat ETF assets have more than halved

The Bharat 22 ETF has raised a cumulative Rs 22900 crore for the government through two tranches, but the exchange traded scheme's assets have been steadily dropping. From a peak AUM of Rs 12065.50 crore at the end of June, the fund's assets have declined to Rs 5801.64 by August-end. Unlike open-ended equity funds that have an exit load, ETFs, by design, are traded like stocks and have no exit restrictions. It is ironic that this is one of the reasons why Bharat 22 ETF, despite being a good investment vehicle that gives exposure to high-quality PSUs and private sector giants, has witnessed short-term trading by investors. Read on to know more. Tranche crunch In two tranches (November 2017 and June 2018), the government has raised Rs 22900 crore through Bharat 22 ETF, which is managed by ICICI Prudential AMC. As an ETF, this products tracks the Bharat 22 index which in turn track stocks of companies selected by the Government of India for their divestment program. The index and the ETF comprise 22 stocks of Central Public Sector Enterprises (CPSEs), Public Sector Banks (PSB) and strategic private sector holdings of SUUTI (Specified Undertaking of the Unit Trust of India). The ETF gives 3 immediate benefits to investors. Firstly, the Bharat 22 ETF has an extremely low fee of 0.01%, which is practically free compared to the expense ratios charged by other ETFs and actively managed schemes. Secondly, the Bharat 22 ETF is a low-cost way to gain exposure to 22 stocks of government enterprises and private sector giants with an amount as low as Rs 5,000. Thirdly, Bharat 22 ETF's p