The L&T Nifty 50 ETF is an open-ended exchange-traded fund designed to replicate the performance of the Nifty 50 Index, which comprises 50 of India’s largest and most liquid companies across various sectors. This ETF offers investors a convenient way to gain exposure to the Indian equity market, particularly to large-cap stocks.
Key Details:
- Inception Date: November 20, 2015.
- Fund Size: Approximately ₹815.28 crore as of December 31, 2024.
- Expense Ratio: 0.06%, with the direct plan having an expense ratio of 0.00%.
- Benchmark Index: Nifty 50 Total Return Index (NIFTY 50-TRI).
- Fund Manager: Mr. Sumit Bhatnagar (Equity), managing since October 3, 2023.
Top Holdings (as of December 31, 2024):
The ETF’s portfolio mirrors the Nifty 50 Index, with significant allocations to:
- HDFC Bank Ltd.: 12.69%
- ICICI Bank Ltd.: 8.51%
- Reliance Industries Ltd.: 7.77%
- Infosys Ltd.: 6.38%
- ITC Ltd.: 4.24%
These holdings reflect the ETF’s strategy to replicate the Nifty 50 Index’s composition.
Sector Allocation (as of December 31, 2024):
The ETF’s investments are diversified across various sectors, aligning with the Nifty 50 Index’s sectoral distribution. Detailed sector-wise allocation can be found in the fund’s monthly or half-yearly portfolio reports.
Investment Considerations:
- Risk Profile: The ETF is suitable for investors seeking long-term capital growth through exposure to large-cap Indian equities. It carries a high-risk profile due to market volatility.
- Investment Horizon: Ideal for investors with a long-term investment horizon of 3 years or more.
- Liquidity: Being an ETF, it offers liquidity similar to stocks, allowing investors to buy and sell units on the stock exchange during trading hours.
Tax Implications:
- Short-Term Capital Gains (STCG): If units are sold within one year of investment, gains are taxed at 15% (plus applicable surcharge and cess).
- Long-Term Capital Gains (LTCG): If units are held for more than one year, gains exceeding ₹1 lakh in a financial year are taxed at 10% without indexation (plus applicable surcharge and cess).
L&T Nifty 50 ETF Holdings
The L&T Nifty 50 ETF aims to track the Nifty 50 Index, so its holdings mirror the 50 constituent stocks of the Nifty 50 Index. These stocks are some of the largest and most liquid companies in India, primarily from sectors such as banking, information technology, energy, consumer goods, and pharmaceuticals.
As of the latest data (December 2024), here are the top holdings of the L&T Nifty 50 ETF:
1. HDFC Bank Ltd. – 12.69%
- Sector: Financials
- HDFC Bank is one of India’s largest private-sector banks, offering a range of banking services including retail and corporate banking.
2. ICICI Bank Ltd. – 8.51%
- Sector: Financials
- Another major private-sector bank in India, ICICI Bank offers a variety of financial products and services across retail, corporate, and international banking.
3. Reliance Industries Ltd. – 7.77%
- Sector: Energy, Conglomerate
- A diversified conglomerate with in petrochemicals, refining, oil, telecommunications, and retail.
4. Infosys Ltd. – 6.38%
- Sector: Information Technology
- Infosys is a leading multinational IT services and consulting company, specializing in software development, business consulting, and technology services.
5. ITC Ltd. – 4.24%
- Sector: FMCG, Tobacco
- ITC is a major player in India’s FMCG sector, with products in categories like cigarettes, food, personal care, and hotels.
Other Notable Holdings:
The ETF also holds significant weights in various other prominent companies across different sectors, such as:
- Tata Consultancy Services Ltd. (TCS) – 4.08%
- Larsen & Toubro Ltd. (L&T) – 3.89%
- Hindustan Unilever Ltd. (HUL) – 3.67%
- Axis Bank Ltd. – 3.43%
- Bharti Airtel Ltd. – 3.18%
- Kotak Mahindra Bank Ltd. – 2.87%
Sectoral Allocation:
The L&T Nifty 50 ETF’s holdings are diversified across multiple sectors, with the largest weightings in:
- Financials (Banking, Insurance) – Around 30-35%
- Information Technology – Around 15-20%
- Energy (Petroleum, Power) – Around 10-15%
- Consumer Goods (FMCG) – Around 10-15%
- Telecom and Pharma – Around 5-10%
Conclusion:
The L&T Nifty 50 ETF offers exposure to a broad range of the Indian economy, with a heavy focus on financials, IT, and consumer goods, which dominate the Nifty 50 Index. Its top holdings reflect India’s largest and most influential companies, providing both stability and growth potential to the ETF. For more detailed and updated information, you can check the fund’s monthly or quarterly reports, as the weightings may vary slightly with market movements.
L&T Nifty 50 ETF Returns
The L&T Nifty 50 ETF is designed to replicate the performance of the Nifty 50 Index, comprising 50 of India’s largest and most liquid companies. While specific historical return data for this ETF is not readily available, we can look at the performance of similar Nifty 50 ETFs to gain an understanding of potential returns.
Here is a comparison of the Nippon India ETF Nifty 50 BeES, which closely tracks the Nifty 50 Index:
| Time Period | Nippon India ETF Nifty 50 BeES (%) | Nifty 50 TRI (%) |
| 1 Year | 21.17% | 21.27% |
| 3 Years | 13.70% | 13.76% |
| 5 Years | 16.08% | 16.21% |
| Since Inception | 15.94% | 16.30% |
These figures indicate that the Nippon India ETF Nifty 50 BeES has closely mirrored the performance of the Nifty 50 TRI over various time frames. Given that the L&T Nifty 50 ETF aims to replicate the same index, its performance is expected to be similar.
For the most accurate and up-to-date return data for the L&T Nifty 50 ETF, I recommend visiting the official L&T Mutual Fund website or consulting financial platforms that provide detailed fund performance metrics.
L&T Nifty 50 ETF Dividend
The L&T Nifty 50 ETF offers a dividend option, but it’s important to note that, as an ETF, the dividend payout depends on the underlying stocks in the Nifty 50 Index and the fund’s dividend policy.
Key Details about the L&T Nifty 50 ETF Dividend:
(1) Dividend Payout:
- The L&T Nifty 50 ETF distributes dividends to its investors based on the dividends received from the underlying stocks in the Nifty 50 Index.
- Dividends are typically paid on a quarterly or annual basis, depending on the ETF’s policy.
(2) Dividend History:
- The ETF’s dividend payouts vary from year to year and are dependent on the earnings and dividends declared by the companies within the Nifty 50 Index.
(3) Taxation:
- Dividend Distribution Tax (DDT): If dividends are received, they are subject to tax according to the prevailing rules. As of the latest regulations, dividends above ₹5,000 are subject to tax at 10% (for individuals) after the 2020 tax amendments.
- Taxation on Dividend Income: For retail investors, the dividend income is taxable based on the individual’s tax slab, after considering the ₹10,000 tax-free threshold for interest income.
(4) Dividend Option vs. Growth Option:
- If you prefer a dividend payout, you can opt for the Dividend Option of the ETF. Otherwise, the Growth Option will reinvest the dividends, and you will see capital appreciation instead of receiving dividends in cash.
For specific details on the dividend declared, ex-dividend date, and amount, you can check the latest factsheets, reports, or the official website of L&T Mutual Fund.
Strengths of the L&T Nifty 50 ETF:
Diversification: Investing in the ETF grants exposure to a broad spectrum of sectors, including financials, information technology, energy, and consumer goods, thereby reducing the risk associated with individual stocks.
Cost-Effectiveness: As a passively managed fund, the ETF typically has lower expense ratios compared to actively managed mutual funds, making it a cost-effective investment option.
Liquidity: Listed on the National Stock Exchange (NSE), the ETF can be bought and sold during market hours, providing flexibility and ease of trading.
Transparency: The ETF’s holdings mirror the Nifty 50 Index, offering investors clear visibility into the underlying assets.
Risks Associated with the L&T Nifty 50 ETF:
Market Risk: The ETF’s value is subject to market fluctuations. A downturn in the Indian stock market can lead to a decline in the ETF’s value.
Tracking Error: While the ETF aims to replicate the Nifty 50 Index, slight deviations can occur due to factors like management fees and transaction costs.
Liquidity Risk: Although generally liquid, some ETFs may face low trading volumes, potentially making it challenging to buy or sell units at desired prices.
Concentration Risk: The ETF’s performance is heavily influenced by the top companies in the Nifty 50 Index. A significant downturn in these companies can adversely affect the ETF’s value.
Conclusion:
The L&T Nifty 50 ETF offers a diversified, cost-effective, and transparent investment option for those seeking exposure to India’s leading companies. However, investors should be mindful of the inherent market risks and ensure that the ETF aligns with their investment objectives and risk tolerance.
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