Blog by Tickertape
In ETF

Nifty BeES – Meaning, Price, and How To Invest

6 Mins Read

what is buyback of shares

Last Updated on Feb 7, 2023 by

Every stock market beginner is aware of Exchange Traded Funds (ETFs), a single fund with a diversified collection of stocks. It is not just a good investment option for a new investor in the stock market but also for seasoned investors. There are several ETFs in the market, and an ETF that follows the Nifty 50 Index is the Nifty BeES. 

In this article, let’s learn about Nifty BeES, its working, the companies involved, how to invest and its benefits.   

What is Nifty BeES?

Nifty BeES stands for ‘Benchmark Exchange Traded Scheme’. It was introduced by an Asset Management Company called ‘BENCHMARK’ on 8th January 2022 and is currently managed by Nippon India Mutual Fund.


It is an Exchange Traded Fund (ETF) that tracks the S&P CNX Nifty index to replicate its returns. Like other ETFs, Nifty BeES is listed and traded on the stock exchange.

How do the Nifty BeES work?

The Nifty BeES was launched in 1992 as the first ETF in India. The ETF is listed on the National Stock Exchange (NSE). 

Each unit of the Nifty BeES fund is equal to 1/10th of the S&P CNX Nifty Index or commonly called Nifty 50 (an index that tracks the top 50 companies from across sectors). The face value of each unit is Rs.10, but depending on the trading volume and demand and supply, the per-unit market price fluctuates.

What are Nifty BeES companies?

Here are the top 10 Nifty BeES companies. The data is as of 6th February 2023. 

S. No.Stock nameTotal Holdings (%)
1.Reliance Industries10.98
2.HDFC Bank8.96
3.ICICI Bank7.99
4.Infosys6.90
5.Housing Development Finance Corporation Limited (HDFC)5.94
6.Tata Consultancy Services4.17
7.ITC3.65
8.Kotak Mahindra Bank3.32
9.Axis Bank3.16
10.Larsen & Toubro3.15

How to invest in Nifty BeES?

You can invest in Nifty BeES just like any stock or mutual fund. You need a Demat account and trading account to complete the investment. According to the prevailing market rates, you can buy or sell Nifty BeES at any time of the day (trading hours). 

You can invest in Nifty BeES through SIP or a lumpsum plan. In the case of lumpsum investment, you can buy several units at real-time prices. While in SIP, you can pick a date and start making monthly instalments.   


Benefits of Nifty BeES

Since Nifty BeES combines the features of mutual funds and stocks, it offers a multitude of benefits to investors. These benefits are as follows:

  • Diversification – Like other index funds, Nifty BeES tracks and invests in the stock market across 22 sectors. This builds up a diversified portfolio which helps in risk mitigation.
  • Liquidity – There is no lock-in period or maturity tenure under Nifty BeES. You can exit from the scheme and redeem your investment at your discretion. No exit load is applicable on redemption, and you can sell off your units in real-time on the stock exchange. 
  • Low-cost investment – Nifty BeES is a very economical investment avenue. While it gives you a diversified portfolio like mutual funds, the expenses involved are meagre.
  • Ease of buying – Since Nifty BeES is listed on the stock exchange, it is available to all investors. With a Demat account, one can purchase the scheme in real-time. The minimum investment is Rs. 500. There is no maximum limit to the investment, which makes Nifty BeES suitable for small and large investors.
    Nifty BeES imitates the Nifty 50 index. There is no prejudice or bias exercised by the fund manager when allocating the portfolio. The portfolio allocation matches the benchmark index, making the scheme completely transparent for investors.
  • Inflation-adjusted returns – The stock market is interlinked to the economy. Hence, economic inflation is considered in the movement of the stock market. As such, the returns that one gets from Nifty BeES is inflation-adjusted and relevant for long-term needs.

Things to remember when investing in Nifty BeES

It is important to note that Nifty BeES is not the same as Nifty/Index funds. While Nifty BeES exhibits the features of an ETF, index funds clone mutual funds. Also, Nifty BeES can easily be liquidated in contrast to an index fund. Another fundamental difference between the two is that Nifty BeES are better preferred for trading, while index funds are used to build long-term portfolios.

But given the benefits mentioned above, one might be tempted to invest in Nifty BeES. However, one should keep a few things in mind before investing:

  • Nifty BeES is an equity-oriented scheme. As such, it is exposed to volatility risks. You should have the appetite to bear the risk if you invest in the scheme.
  • Though the scheme tracks the S&P CNX Nifty Index, the returns might not match due to the possibility of a tracking error.

Is Nifty BeES right for you?

If you want to invest in the Nifty 50 index and want a diversified portfolio, Nifty BeES can be an ideal solution. It offers a low-cost investment opportunity with added liquidity, in turn helping you earn attractive returns. If you have a long-term horizon, the risks would be mitigated, and you could enjoy capital appreciation.

The bottom line

Nifty BeES is an ideal choice for investors looking to test equity markets while negating their risk. While returns on this investment can be attractive, the risks associated could be high too. 

You can use Tickertape Stock Screener to analyse the Nifty 50 companies according to key parameters like market cap, 1-yr returns, 5-yr CAGR, net profits, and more. 

Assess your investment needs before you make investment decisions. Understand your financial goals, and then invest accordingly.

FAQs

What is the Nifty BeES ETF?

Nifty BeES ETF is an ETF that tracks the Nifty 50 index to replicate its returns. Like other ETFs, Nifty BeES is listed and traded on the stock exchange. Nippon India Mutual Fund currently manages it. 

What is Nifty BeES share price on NSE?

Like other stocks on the stock market, the Nifty BeES share price also keeps changing daily. Visit the Nippon India ETF Nifty BeES page to get the current price of the ETF. 

What is Nifty BeES return?

As of 6th February 2023, the 1-yr returns are 4.71%, while 5-yr returns are 79.42%. And in the case of SIP, the 5-yr returns are 39.76%. Visit the Nippon India ETF Nifty BeES page to get the current returns of the ETF.
Anjali Chourasiya
Latest posts by Anjali Chourasiya (see all)

Related Posts

guest
2 Comments
Inline Feedbacks
View all comments
Identify the "red flags" in your portfolio
Try Tickertape
Identify the "red flags" in your portfolio
Try Tickertape

The blog posts/articles on our platform are purely the author’s personal opinion and do not necessarily represent the views of Anchorage Technologies Private Limited (ATPL) or any of its associates. The content in these posts/articles is for informational and educational purposes only and should not be construed as professional financial advice. Should you need such advice, please consult a professional financial or tax advisor. The content on our platform may include opinions, analysis, or commentary, which are subject to change, without notice, based on market conditions or other factors. Further, the use of any third-party websites or services linked on the website is at the user's discretion and risk. ATPL is not responsible for the content, accuracy, or security of external sites. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL (in case of IAs) and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. The examples and/or securities quoted (if any) are for illustration only and are not recommendatory. Any reliance you place on such information is strictly at your own risk. In no event will ATPL be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this website.

By accessing this platform and its blog section, you acknowledge and agree to the Terms and Conditions of this website, Privacy Policy and Disclaimer.