The fourth bond-only exchange-traded fund started the four-day process of selling its investment units on Saturday at Tehran Stock Exchange.
The ETF, named Parand, will only invest in fixed-income assets that have seen rising demand in the past year due to turmoil in the equity markets.
Unlike most ETFs, which are listed on Iran Fara Bourse over-the-counter market, the fund will be listed at TSE, Iran’s largest equity market.
This is the first bond ETF that offers its units for underwriting in the current Iranian year (started March 20).
Arman Ati Investment Advisory is creating the fund. Sepehr Investment Bank will manage and market the bonds for Parand.
The two companies, in cooperation with Khobregan Brokerage, started Sepehr Khobregan Naft hybrid ETF last July. The fund’s net asset value has grown 14.5% last year.
Investing in an ETF is simpler than investing in a mutual fund. These shares are traded on exchanges and can be bought and sold via a broker or on an online trading platform. They rid you of management costs mutual funds rack up while offering easy access to a diversified portfolio.
There are only eight ETFs that have been active for over a year. They managed 4.48 trillion rials (about $128 million at market exchange rate) combined as of March 2015. Of those eight, five invest in stocks only. Two are hybrid funds, investing in both stocks and bonds. The remaining one, Etemad Afarin Parsian, only holds bonds in its portfolio and is by far the largest with 3.3 trillion rials ($94.7 million) in assets.
