The merger is voluntary and investors need to give their consent to the fund house either online or physically between March 14 and April 12. If no consent is given, money will be returned by the fund house on maturity.
In a letter to unitholders, Edelweiss Mutual Fund said, “By doing so you can benefit from the current higher interest rates and enjoy additional indexation benefits, which will reduce your tax liability.”
As per the Income Tax Act 1961, these mergers will not result in capital gain or loss for the merging schemes but will be treated as a continuous investment into the next scheme.
Bharat Bond ETF-April 2025 currently offers a yield of 7.84% and has a portfolio of AAA-rated public sector undertakings bonds and assets of ₹9,600 crore, while Bharat Bond ETF-FoF has assets of ₹3,900 crore. The ETF has an expense ratio of less than 1 basis point, while the FoF has an expense ratio of 5 basis points.
A basis point is a hundredth of a percentage point.
“Attractive yields, low expense ratio and tax efficiency make this a good bet for investors who wish to continue with a debt allocation for a two-year time horizon,” said Joydeep Sen, corporate trainer-debt.Bharat Bond ETF-April 2023, launched in December 2019, has given investors an annualised return of 6.5% since inception. It has assets of ₹7,800 crore, while the FoF has assets of ₹4,200 crore and has given a return of 6.5% since inception.
