Bharat 22 ETF: Offers a diversified portfolio of stocks

After the successful launch of CPSE ETF FFO II in March 2017, the Government of India is coming out with yet another exchange traded fund (ETF) offer for retail investors. The new ETF would be called Bharat 22 ETF and would be open for subscription from November 15, 2017.

As the name suggests, the ETF would invest in 22 stocks, out of which 19 would be stocks of public sector undertakings, while three stocks will be of companies from the private sector. The PSU portfolio will comprise of diversified stocks from various sectors and will include ONGC, NTPC, NHPC, IOC, BPCL, Coal India, GAIL, REC, PFC, BEL, EIL, NALCO, NBCC, PGCIL, SBI, BOB, Indian Bank, NLC India and SJVN Ltd. The stocks of three private sectors companies will include L&T, ITC and Axis Bank. The Government of India holds strategic holdings in the three private sector companies through the Specified Undertaking of Unit Trust of India (SUUTI).

As is evident from the list of proposed holdings, Bharat 22 offers a more diversified portfolio of stocks than the previous ETFs. The companies belong to various sectors such as banking, power, engineering, metals, construction, oil and gas, etc. Most of these companies are leaders in their respective sectors and almost all of these companies are large cap companies, hence the portfolio of Bharat 22 will be less volatile. Apart from capital appreciation, some of the PSUs have given high returns in the past in the form of dividend. 
 
Investors looking for long term growth in the form of capital appreciation and decent income in the form of dividend can subscribe to Bharat 22 ETF.