BHARAT 22 ETF FFO 2 opens for subscription on October 3

Further Fund Offer 2 or FFO 2 of ICICI Prudential’s BHARAT 22 Exchange Traded Fund, an open ended exchange traded fund investing in S&P Bharat 22 Index managed by ICICI Prudential Mutual Fund, will open for subscription for anchor investors on October 3, said a note from the fund house. The FFO 2 will open for non-anchor investors on October 4.

The foundation of BHARAT 22 ETF was laid in the budget speech in 2017, and BHARAT 22 ETF had one of the largest NFO in the history of Indian mutual fund industry.

The S&P BSE Bharat 22 Index is designed to measure the performance of select companies dis-invested by the central government according to the disinvestment program, said the note. The fund follows a stock weighting mechanism of Free Float Market Capitalization Weighting Method.


The fund follows a stock level cap of 15 per cent and sector level cap of 20 per cent. The re-balancing is done annually in March.

Reasons to invest in the FFO 2, according to the fund house:

Diversified exposure: Six sectors (Basic Materials, Energy, Finance, FMCG, Industrials and Utilities). Secular growth prospects (FMCG and Utilities) + Cyclicals (Energy, Metals, Industrials). Diversification can help reduce volatility and improve risk adjusted returns.

Seeking Stability + Growth: Mix of leaders from different sectors representing balance between stability and growth.

Stock and Sector cap: Stock level cap of 15% and sector level cap of 20% applied annually at rebalancing.

Free Float Market Capitalization Method: Reduces concentration of few heavy weight companies by considering shares available for trading in the market.

Milestones

The foundation of BHARAT 22 ETF was laid in Union Budget Speech 2017.

BHARAT 22 ETF had the largest NFO in the history of Indian Mutual Fund industry.

During the NFO: 3.35 lakh retail applications amounting to Rs 32,000 crore.

Initial offer of Rs 8,000 crore. Government disinvested Rs 14,500 crore during the NFO period.

During the FFO: 1.2 lakh retail applications amounting to Rs 15,436 crores.

Further Fund offer of Rs 6,000 crore. Government disinvested Rs 8,400 crore during the FFO.