Government of India has announced a new exchange-traded fund (ETF), Bharat-22 in order to raise a record Rs 72,500 crore in the fiscal year to March 2018.
The Bharat – 22 ETF comprises 22 best performing traded scrips including blue chips such as Oil and Natural Gas Corp (ONGC), Indian Oil Corp (IOC) and State Bank of India (SBI) — all state-owned companies — along with partial stakes in Axis Bank, ITC and Larsen & Toubro that it holds through the Specified Undertaking of the Unit Trust of India (SUUTI).
Investors can purchase ETF units, which will be listed on the stock exchanges. The value of an ETF unit will rise or fall in line with the value of the 22 stocks. ETFs are similar to mutual funds in a certain manner but are more liquid as they can be sold quickly on stock exchanges like shares.