Edelweiss AMC Consolidates Bharat Bond ETFs

Edelweiss Mutual Fund has announced the merger of Bharat Bond ETF – April 2025 into Bharat Bond ETF – April 2030, effective April 15, 2025. As a result, the April 2025 ETF will cease to exist, and its unitholders will be transferred to the April 2030 ETF.

Exit Window for Investors

Unitholders of Bharat Bond ETF – April 2025 who do not wish to continue with the transferee scheme have the option to exit or switch their investments without any exit load between March 10, 2025, and April 8, 2025. Investors who do not opt out will automatically be transferred to the April 2030 ETF.

Details of the Merging and Transferee Schemes

Bharat Bond ETF – April 2025 is an open-ended target maturity exchange-traded fund (ETF) that invests in AAA-rated bonds issued by government-owned entities under the Nifty Bharat Bond Index – April 2025. It carries moderate interest rate risk and low credit risk.

Bharat Bond ETF – April 2030, which will absorb the merging scheme, follows the Nifty Bharat Bond Index – April 2030. It carries a relatively higher interest rate risk while maintaining a low credit risk. 

Since both ETFs belong to the same index series, the underlying investments remain similar.

Unit Allocation and Tax Treatment

Investors who do not exit will be allotted units in the April 2030 ETF at Net Asset Value (NAV) on April 15, 2025. The units will be treated as fresh subscriptions under the new scheme, but the original holding period will be considered for tax purposes. 

Under Section 47(xviii) of the Income-tax Act, 1961, the merger will not be treated as a taxable event, and investors will not incur immediate capital gains tax.

Maturity and Delisting of April 2025 ETF

The Bharat Bond ETF – April 2025 will be delisted two working days before its maturity date. Investors who do not provide consent for the merger will have their units redeemed at applicable NAV, with proceeds credited within T+3 working days. Edelweiss AMC has issued a notice regarding this merger, informing all unitholders.

Conclusion

All in all, this merger allows for a transition of investments within the same bond index series, maintaining the underlying portfolio structure. Investors are advised to review the merger details and take necessary action within the specified exit window if required.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.