Explore Bharat 22 ETF: Benefits, Performance, and How to Invest

The Bharat 22 ETF (Exchange Traded Fund) is an investment product launched by the Government of India in collaboration with ICICI Prudential Mutual Fund. It offers investors an opportunity to invest in a diversified basket of public sector undertakings (PSUs) and private companies where the government holds significant stakes.

Key Features of Bharat 22 ETF:

(1) Diversified Portfolio: It includes stocks from sectors like basic materials, energy, finance, industrials, utilities, and fast-moving consumer goods (FMCG).

(2) Benchmark: The ETF tracks the S&P BSE Bharat 22 Index, which is specifically designed for this product.

(3) Underlying Companies: Prominent stocks include companies like ONGC, NTPC, Coal India, Indian Oil Corporation, Power Grid, SBI, Axis Bank, ITC, and others.

(4) Government Initiative: It is part of the government’s disinvestment program, aimed at reducing fiscal deficit and enhancing public participation in PSUs.

(5) Low-Cost Structure: ETFs typically have a lower expense ratio compared to actively managed funds.

(6) Liquidity: Being listed on stock exchanges like NSE and BSE, it provides liquidity and ease of trading similar to stocks.

(7) Tax Efficiency: Gains from ETFs are treated similarly to other equity investments, offering tax benefits under long-term capital gains tax rules.

Advantages:

• Passive Investment: Tracks the index without active management.

• Sector Exposure: Allows investors to gain exposure to multiple sectors in a single investment.

• Government Backing: Offers a sense of security as it includes companies with significant government stakes.

Disadvantages:

• Market Risks: Like all equity investments, it is subject to market fluctuations.

• Limited Control: Investors cannot pick and choose specific stocks within the ETF.

Sector Allocation:

The Bharat 22 ETF provides exposure to six core sectors:

Basic Materials: Hindustan Zinc, Nalco.

Energy: ONGC, Indian Oil Corporation, BPCL, Coal India, and Power Grid.

Finance: SBI, Axis Bank, Bank of Baroda.

Industrials: Engineers India, NBCC, Bharat Electronics, and other infrastructure-related firms.

Utilities: NTPC, GAIL, NHPC.

FMCG: ITC.

Tax Implications:

Short-Term Capital Gains (STCG): If units are sold within one year, the gains are taxed at 15%.

Long-Term Capital Gains (LTCG): Gains above ₹1 lakh, if held for over one year, are taxed at 10% without indexation.

Dividends: Taxed at the investor’s applicable slab rate due to the Dividend Distribution Tax (DDT) being abolished.

Comparison with Other ETFs:

Aspect	Bharat 22 ETF	CPSE ETF	Nifty 50 ETF
Focus	Government-owned companies	PSUs only	Broad market (top 50 cos)
Diversification	Broad across 6 sectors	Limited to PSUs	Broad
Expense Ratio	Low	Low	Very Low

Bharat 22 ETF Share Price

As of December 19, 2024, the Bharat 22 ETF is trading on the National Stock Exchange (NSE) under the ticker symbol ICICIB22.

Recent Performance:

• Current Price: Approximately ₹112.49 per unit.

• 52-Week Range: The ETF has fluctuated between a low of ₹85.52 and a high of ₹124.00 over the past year.

Returns:

• 1-Month Return: Approximately 1.4%.

• 6-Month Return: Approximately -1.11%.

• 1-Year Return: Approximately 25%.

• 3-Year Return: Approximately 35.87%.

• 5-Year Return: Approximately 26.47%.

• Since Inception: Approximately 16.5%.

Key Metrics:

• Net Asset Value (NAV): ₹110.73 (as of December 18, 2024).

• Expense Ratio: 0.07%.

• Assets Under Management (AUM): ₹20,613 Crores.

Portfolio Composition:

The ETF comprises 22 stocks across various sectors, with significant holdings in:

• ITC: 16.26%

• Larsen & Toubro: 14.21%

• NTPC: 9.50%

• Power Grid Corporation of India: 8.26%

• Axis Bank: 7.36%

• State Bank of India: 7.35%

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