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Nifty BeES Share Price: How Has the ETF Performed in the Last Decade?

Nifty Bees share price

Investing in exchange-traded funds or ETFs provide investors an opportunity to lower overall risk and seek diversification. An ETF basically holds a basket of funds across sectors and depends on the theme of the fund. For example, the Nifty BeES ETF, also called the Nippon India Nifty 50 BeES ETF, is a fund that tracks the performance of stocks part of the Nifty 50 index.

The Nifty 50 index provides investors with exposure to the 50 largest companies in India, allowing potential shareholders to buy and hold shares of several blue-chip stocks in their portfolio.

What is the Nifty BeES ETF?

For early investors, BeES refers to Benchmark Exchange Traded Scheme, basically tracking the performance of an associated index.

The Nifty BeES ETF aims to provide investment returns that correspond to the total returns of the Nifty 50 index before expenses. According to Nippon, the Nifty BeES ETF employs a passive investment approach to track index performance. It seeks to achieve fund objectives by investing in Nifty 50 stocks in the same proportion as in the index.

In addition to lowering your risk, ETFs offer several other advantages. A passively managed fund such as the Nifty BeES has lower fees, increasing your total returns over time. Further, an ETF also offers higher liquidity compared to mutual funds.

Main features of the Nifty BeES ETF

  • The Nifty Fees was the first exchange-traded fund to be launched in India on December 28, 2001.
  • The ETF is managed by Mehul Dama, and it provides the NAV (net asset value) on a real-time basis.
  • Similar to a stock, the Nifty BeES ETF can be traded anytime on the NSE.
  • The fund currently has over ₹10,200 crores in assets under management.
  • The minimum investment for the Nifty BeES ETF is ₹50,000 and in multiples of the same.

A look at Nifty BeES share price over time

As seen in the below chart, the Nifty BeES share price has returned almost 14% annually in the last five years. Since its inception 21 years back, annual returns have been closer to 15.9%. So, an investment of $10,000 in the Nifty BeES ETF five years back would be worth $18,500 today. This investment at the inception of the fund would be worth close to $220,000 today.

Comparatively, the benchmark would have turned a $10,000 investment into $235,000, which suggests investors would have paid close to $17,000 in management fees.

The appreciation of the Nifty BeES share price has allowed investors to generate sizeable gains over time and easily outpace inflation over two decades.

Top 10 stocks of the Nifty BeES

The top 10 holdings of the Nifty BeES ETF include stalwarts such as

Stock Name% of Holdings
Reliance Industries Limited11.02%
HDFC Bank Limited8.25%
ICICI Bank Limited7.93%
Infosys Limited7.05%
Housing Development Finance Corporation Limited5.61%
Tata Consultancy Services Limited4.10%
ITC Limited3.85%
Kotak Mahindra Bank3.50%
Larsen & Toubro Ltd.3.06%
Axis Bank3.00%

Pros and cons of investing in the Nifty BeES ETF

The appreciation of the Nifty BeES share price has allowed the ETF to gain significant traction in recent years. In addition to risk diversification, investing in the fund allows you to:

Lower cost: You can gain access to India’s 50 largest corporate houses at a much lower cost by investing in the Nifty BeES ETF. It also has an expense ratio of 0.80%, which is pretty low compared to other mutual funds.

Liquidity: The Nifty BeES ETF can be easily bought and sold like a stock with a settlement period of T+2 days.

Easy to understand: The ETF simplifies investing, especially for early investors. The performance of the fund can be easily calculated as it is linked to the Nifty 50 fund. Further, there is no entry and exit load on the fund.

But there are certain disadvantages, such as:

Lower returns: The Nifty BeES ETF is ideal for investors with a moderate risk profile. It will not be an attractive bet for those who want to beat the broader market by investing in individual stocks.

Exposure to two sectors: The Nifty BeES ETF is tilted towards sectors, such as financial services and information technology, that account for more than 50% of the fund. So, the Nifty BeES share price will primarily depend on the performance of the banking and tech sectors.

The final takeaway

Nifty BeES is an investment vehicle that should be a part of your portfolio, especially if you are bullish on the Indian economy over the long term. You can reduce portfolio risk by gaining access to large caps, thereby generating consistent returns year after year.

FAQs on the Nifty BeES ETF

What is the Nifty BeES share price in 2022?

Nifty BeES share price is currently ₹203.40. The ETF was priced at ₹10.82 in January 2002.

Is Nifty BEES ETF good?

The ETF is good for investors who want to earn returns similar to the Nifty 50 index.

Will I get a dividend if I buy Nifty BeES ETF?

The trustee of the scheme will provide dividends to the unitholders depending on whether a surplus of assets is available or not. The dividend amount and the frequency at which the dividend amount is distributed depends on the decision taken by the trustee.

What is BeES in Nifty?

It stands for Benchmark Exchange Traded Scheme

Which companies are part of the Nifty BeES ETF?

The largest 50 companies in India, such as Reliance Industries, Airtel, and SBI Bank, are part of the Nifty BeES ETF.

This is the opinion of the author and not investment advice. Past returns are not indicative of any future returns.


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