What is NIFTY BEES - ETF?

What is Nifty Bees?

Nifty BeES, the first ETF in India, was introduced by Benchmark Asset Management Company in 2002 and currently managed by Nippon India Mutual Fund.

 

NIFTY BEES - is the first ETF (Exchange Traded Fund) in India, which seeks to provide investment returns that closely correspond to the total returns of securities as represented by the S&P CNX Nifty Index. 

 

It gives you the most diversified exposure at lowest possible unit size. Approximately value of Nifty bees will be 1/100 th value of the prevailing Nifty price.

 

Its units are traded in NSE and BSE. 

 

Nifty 50 TRI (Total Return Index) is the benchmark index which is the Total Return variant of Nifty 50.

 

 

Why ETFs?

 

ETFs are types of Mutual Funds that aim to track the performance of a specific index such as NIFTY 50, NIFTY Next 50, NIFTY Bank etc. 

ETFs offer several advantages to investors:

• Expense Ratio is lower.
• Tracking Error is lower.
• Can easily be bought / sold like any other stock on the exchange.
• Minimum investment is one unit, which is as low as Rs.100.
• Enjoy flexibility of a stock and diversification of index fund.

On one hand, investors can buy an ETF to get underlying Index returns at low cost (low expense ratio) and on the other hand they can trade in an ETF like a stock at live NAV, to benefit from intra-day volatility, if desired. 

Many AMCs have launched ETFs replicating various indices, among which Nifty 50 Index has more ETFs available. 

Among Nifty 50 ETFs, Nifty Bees has high liquidity and over 1 million units traded daily in NSE.The Nifty BeES also scores over other index funds due to its low tracking error and expense ratio, apart from easier tradeability.  

Performance:

With large cap funds finding it increasingly difficult to outperform benchmark indices like NIFTY 50, ETF provides a low cost investment avenue to take exposure of various segments of the markets including large caps. 

Through investment in ETFs, investors may create wealth along with comfort of
portfolio transparency and tradability like stock. 

Complete list of  ETFs