Hyderabad Stocks：Nifty BeEs： What is it & how to invest？

Nifty BeES is an exchange-traded fund (ETF) that tracks the performance of the Nifty50 index. It was launched in 2001 and is the first Indian ETF. It is listed on the stock exchanges and can be bought or sold like a stock through the demat account. Nifty BeEs offers the benefit of diversification as it invests in the top 50 Indian companies.

ETFs have become popular in India as they combine features of both mutual funds and stocks. They have higher liquidity and lower costs than mutual funds. Moreover, you can trade an ETF easily like a stock on the exchange. Nifty BeEs is a well-tracked Indian ETF and investors consider it a great investment as it helps diversify their portfolio.

Nifty BeEs is designed to mimic the movement of the Nifty50 index. The ETF holds a portfolio of stocks that closely matches the composition and weightage of the stocks in Nifty50. Nifty BeEs intends to deliver returns that resemble that of the index. The liquidity of Nifty BeEs depends on the liquidity of the underlying stocks and the demand from investors in the market.

Investors earn returns on Nifty BeEs based on the movement in the market. You can invest in Nifty BeEs directly using your demat account by paying a brokerage fee associated with it. It can be sold and bought anytime during the trading session just like a stock.

The salient features of Nifty BeEs are - Nifty BeEs was launched on December 28, 2001 and is the first Indian ETFIt is managed by Nippon India Mutual Fund Each unit of Nifty BeEs is 1/10th part of the S&P CNX Nifty Index value and 1/100th part of the Nifty 50 IndexHow Nifty’s value is calculated on a real-time basis, Nifty BeEs also provides real-time NAV and can be traded anytime It can be sold or bought anytime on the stock exchanges in a dematerialized form just like sharesThe minimum investment size is ₹50,000

The advantages of investing in Nifty BeEs are – Risk Diversification – Nifty BeEs provides diversification as it tracks 50 shares of the Nifty50 index. An investor can just purchase one unit of Nifty BeEs and enjoy the advantage of a bigger portfolio.Cost Reduction – The annual expense ratio for Nifty BeEs, including management fees, is up to 0.80%. It is one of the lowest for any Indian mutual fund scheme. Convenient – Nifty BeEs can be easily bought and sold using your demat account like any share during the trading session.Flexibility – Nifty BeEs can easily be bought and sold like any other share and encashed on T+1 day. Investors can also place limit orders.Liquidity – Nifty BeES attracts liquidity from buying and selling by investors, arbitrage with index futures or arbitrage by authorised participants. The volume for Nifty BeEs is high, offering good liquidity.Unbiased – Nifty BeEs is free from any bias of fund managers as it moves in the direction of the Nifty 50 Index.Transparent and Economical – As Nifty BeES mirrors the Nifty50 index, investors know how much is invested in each stock at a given point in time. Further, there is no entry and exit load on this fund. Lower Returns – Nifty BeEs could provide lower returns as compared to certain mutual funds as it tracks the movement of a particular index.Extra diversification – Sometimes extra diversification can lead to lower returns. This loss in an investment can create confusion in the minds of investors who might find it difficult to understand the diverse companies of the index.Hyderabad Stocks

Investing in Nifty BeEs is quite simple. It is quite similar to investing in a stock and here are a few easy steps through which you can invest in this ETF:Setup a Trading & Demat Account

You will need a trading and demat account to invest in Nifty BeEs. You can open it easily without any cost on INDmoney. Search for Nifty BeEs

You can look for Nifty BeEs on the trading app. This ETF is listed on both NSE and BSE. Place Order

You can buy Nifty BeEs by simply placing an order like you do for a stock. You need to determine the quantity you want to buy. Investors can opt for lumpsum investment or set up a periodic SIP.

Nifty BeEs are taxed in line with other stock market investments. Here’s a look:

Short-term capital gains tax: If an investor sells Nifty BeEs units in less than one year of purchase, the gains made on it are treated as short-term capital gains. They are taxed at a flat rate of 15%.

Long-term capital gains tax: If an investor sells Nifty BeEs units after holding them for over one year, the gains are treated as long-term capital gainsLucknow Investment. They are taxed at a rate of 10%.

Returns of Nifty BeEs are -

(Data as of 31st May, 2024; returns on CAGR basis)

Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns

The constituents of the Nifty 50 Index will also be the constituents of Niftybees. Financial Services account for the top with a share of 34% followed by oil, gas & consumer fuels sector at 12.48%.

(Data as of 31st May, 2024)

Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns.

Investment in Nifty BeEs will help investors move in tandem with the market. It will also help investors enjoy the benefit of investing in a large portfolio of Nifty stocks by purchasing just one unit. This diversification across stocks from different sectors could help mitigate risk. Anyone looking for an investment that provides returns in line with the market can invest in Nifty BeEs.

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