NSE symbol NIFTYBEES
Reuters code NBES.NS
Face value Rs. 10
* low volume (little hard to buy or sell big quantities)
Advantages of Nifty BeES
Nifty BeES is Economical: Nifty BeES is a no load scheme. The annual expense ratio including management fees is a maximum of 0.80% of the Daily Average Net Assets, which is one of the lowest for any mutual fund scheme in India. The costs reduce further to 0.65%, for assets over Rs.500 crore.
Nifty BeES is Convenient: As it is listed and traded on the NSE, Nifty BeES can be bought / sold throughout the trading day just by a call to your broker. This gives you the power to react swiftly to changes in the market. You can even place limit orders. Nifty BeES can be held in your DP account with other portfolio holdings.
Nifty BeES is Liquid: The structure of Nifty BeES attracts liquidity from various sources such as buying / selling by investors, arbitrage with index futures, arbitrage by authorized participants with the underlying shares.
Nifty BeES is Transparent: As Nifty BeES replicates the S&P CNX Nifty, investors can know at any given point of time where and how much is invested in each stock.
Nifty BeES gives Instant Diversification: Investing in just one unit gives exposure to fifty shares of the S&P CNX Nifty. This allows investors to spread risk with one single decision.
Nifty BeES is an Equitable Structure: The unique “in-kind” mechanism of creating / redeeming Nifty BeES by exchanging a pre-defined portfolio ensures that long-term investors do not bear the cost of short term trading as observed in traditional Open-ended structure. This insulates long-term investors from short-term trading activity
The drawback is currently the volumne traded on ETF is very low. It is difficult to buy & sell in large quantities..
ETFs are very popular in US and traded in huge volumes. In India it is yet to attract the required attention..
View from Mr.PonnuSwamy Padmanaban
NIFTYBEES is good avenue for long-term regular investment.
The following analysis shows that 22% – 30% annualised return is possible from NIFTYBEES (i.e. NIFTY) from Rupee Cost Averaging (RCA) and Value Averaging (VA) respectively.
Starting Period: Jan 2002
Till: Jul 2008
Monthly Investment: Rs 10,000
RCA Return – 22% Annualised
VA Return – 30% Annualised
Courtesy – Annualised Calculation : Vetapalem Sridhar