Seeing the past return offered by the government backed CPSE ETF, the new Bharat 22 ETF shall also provide reasonable returns for investors. It is all the more a bet in India's growth story with 22 strong companies being a part of it.
1. Entities part of the ETF to gain significantly from the several reforms: The 22 entities included in it are from CPSE, PSBs and Specified Undertaking of the Unit Trust of India (Suuti). Various reforms such as digital drive, financial inclusion, GST and DBT or other make in India initiatives are likely to benefit these companies and hence their valuations are likely to see an uptrend directly impacting investors positively.
2. Low cost as low expense ratio for Bharat 22 ETF: Bharat ETF can be tapped in at a low cost and hence the mutual fund basket can be digged into with it. Also, there are high chances that during the NFO for the ETF, the discounts are provided.
3. Returns higher than the benchmark index: ETF trend taking into considering CPSE ETF has been higher than the benchmark Sensex as also the dividend yield which remained a way higher.
4. A good diversification option: 92% of the Bharat 22 ETF is comprised by large cap stocks while the 8% is held by high quality mid and cap stocks. And the weightage for each of the stock is capped at 15% while the sectoral limit is set at 20%. So, with bets across sectors investor returns shall see long term return prospects.