Debt ETFs

Debt ETFs are exchange-traded funds that invest in a portfolio of fixed-income instruments — such as government securities, treasury bills, state development loans, or corporate bonds — and are listed and traded on stock exchanges like NSE and BSE. Unlike debt mutual funds that are bought and sold at the end-of-day NAV directly through the AMC, debt ETFs can be bought and sold throughout the trading day at market prices. In India, the Bharat Bond ETF series — launched by EDELWEISS AMC and backed by the government — is the most prominent example of debt ETFs, investing in AAA-rated PSU bonds with defined maturity dates. Debt ETFs combine the predictability and capital safety of bonds with the liquidity and accessibility of exchange-traded instruments. The key risks include interest rate risk (for longer-duration debt ETFs), credit risk (for corporate bond ETFs), and liquidity risk in the secondary market if trading volumes are thin.