NIFTY BeES is an equity exchange traded Fund combining the flexibility of stock market investment and the simplicity of equity mutual funds.
If you are looking to start the stock market journey, investing or buying the index can be a good starting point. One of the leading stock market indices in India is Nifty 50, representing the top 50 stocks in terms of market capitalization, which also makes it highly liquid in terms of buying and selling. But, one cannot buy the index. However, exposure into each and every index stock can be taken by buying an Exchange Traded Fund (ETF) that is benchmarked to the index. So, by simply buying an ETF, which is benchmarked to Nifty 50, you will end up buying the index itself.
While there are several such Nifty 50 ETFs from various fund houses, the NIPPON India ETF NIFTY BeES is the oldest, largest and comes with enough liquidity and thus can be considered to be a part of your long-term portfolio. Even while you continue investing in mutual fund schemes, NIFTY BEES can still be a part of your portfolio.
What is Nifty BeES
Nippon India ETF Nifty BeES is an open-ended large cap equity scheme which belongs to Nippon India Mutual Fund House. NIFTY BeES is a typical Equity Exchange Traded Funds (ETFs) combining the flexibility of stock market investment and the simplicity of equity mutual funds.
The fund is benchmarked against NIFTY 50 Total Return Index and thus is any other large-cap mutual fund. ETFs like NIFTY BEES differ from an index fund as the former is available for buying and selling on a stock exchange during the trading hours. The underlying portfolio of Nifty BeES very closely replicates that of the Nifty 50 index.
How to buy Nifty BeES
Nifty BeES can be bought / sold like a share through any NSE terminal at prices available on the screen. In order to buy NIFTY BeES , you need to have a demat account where you hold stocks purchased on any stock exchange. The units of NIFTY BeES can be bought at the prevailing market price anytime during the trading hours on the stock exchange.
Investing in just one unit of Nifty BeES gives exposure to 50 shares of the Nifty 50 index. This allows investors to spread risk with one single decision. The performance of Nifty BeES is simply the result of performance of shares in the Nifty 50 Index and demand & supply in the market. There is no Fund manager bias.
Buying NIFTY BeES can help you accumulate corpus for your long term goals. As and when markets dips or sees a correction, one can keep adding new money to add more units at lower prices. Nearing goals, one can then either withdraw units or shift funds into less volatile debt funds.