Nifty BeES (Benchmark Exchange Traded Scheme) is India’s first exchange-traded fund (ETF), introduced in December 2001 by Benchmark Asset Management and now managed by Nippon India Mutual Fund.
Key Features of Nifty BeES:
- Structure: Nifty BeES combines features of both shares and mutual fund units. It trades on the National Stock Exchange (NSE) and can be bought and sold like any other share through a Demat account. Each unit of Nifty BeES represents 1/10th of the Nifty 50 Index value.
- Investment Objective: The fund employs a passive investment approach designed to track the performance of the Nifty 50 Total Return Index (TRI) by investing in the securities constituting the Nifty 50 Index in the same proportion.
- Expense Ratio: Nifty BeES is known for its cost-effectiveness, with an expense ratio of 0.80%. For assets exceeding ₹5 billion, the expense ratio reduces to 0.65%, making it more economical compared to many mutual funds in India.
- Liquidity and Trading: As an ETF, Nifty BeES offers high liquidity, allowing investors to buy or sell units throughout the trading day at real-time prices. This intraday trading capability provides flexibility to react swiftly to market changes.
- Diversification: Investing in Nifty BeES provides exposure to the 50 companies comprising the Nifty 50 Index, offering instant diversification across various sectors of the Indian economy.
- Tax Efficiency: ETFs like Nifty BeES are generally considered tax-efficient due to their unique creation and redemption process, which can minimize capital gains distributions.
Performance Overview (as of November 30, 2024):
- 1-Year Return: 21.17%
- 3-Year CAGR: 13.70%
- 5-Year CAGR: 16.08%
- Since Inception: 15.94%
These returns are closely aligned with the Nifty 50 TRI benchmark, reflecting the fund’s objective to mirror the index’s performance.
Considerations for Investors:
- Market Risk: As Nifty BeES tracks the Nifty 50 Index, its performance is subject to market risks and the volatility associated with the underlying securities.
- No Fund Manager Bias: The passive management approach eliminates fund manager bias, ensuring returns closely follow the index.
- Trading Costs: While the expense ratio is low, investors should consider brokerage fees and Demat account charges associated with trading ETFs.
Who is the owner of Niftybees?
The owner of Nifty BeES is Nippon India Mutual Fund, which is part of Nippon Life India Asset Management Limited (NAM India).
Nifty BeES was originally launched in 2001 by Benchmark Asset Management Company, the pioneer of ETFs in India. In 2011, Benchmark AMC was acquired by Goldman Sachs Asset Management. Later, in 2015, Reliance Nippon Life Asset Management (now Nippon India Mutual Fund) took over the ETF business from Goldman Sachs in India.
Today, Nippon India Mutual Fund manages and operates Nifty BeES as part of its ETF offerings.
What is the return of Niftybees?
As of the latest data, the returns for Nifty BeES are as follows:
- 1-Year Return: ~21.17%
- 3-Year CAGR: ~13.70%
- 5-Year CAGR: ~16.08%
- Since Inception: ~15.94%
These returns are closely aligned with the Nifty 50 Total Return Index (TRI), which Nifty BeES tracks, reflecting the growth of India’s top 50 stocks over time.
Note that these returns can vary depending on market conditions and the performance of the Nifty 50 Index itself. The returns are also subject to the fund’s expense ratio, which is quite low (around 0.65% for larger assets), ensuring minimal impact on long-term growth.
Niftybees dividend
Nifty BeES (Benchmark Exchange Traded Scheme) pays dividends to investors from time to time, as per the fund’s policy. The dividends are generally declared based on the income generated from the underlying stocks in the Nifty 50 Index, such as dividends received from companies within the index.
Key Details about Nifty BeES Dividends:
Dividend Distribution:
- The dividends distributed by Nifty BeES are typically paid out to investors in the form of cash.
- The dividends are subject to tax and are paid after tax deductions at source (TDS), as per applicable tax laws.
Dividend Frequency:
- Nifty BeES generally declares dividends on an annual or semi-annual basis, depending on the income received from the stocks within the Nifty 50 Index.
- The exact dividend payout may vary each year based on the performance of the underlying stocks in the index.
Dividend Payout Options:
- Payout Option: If you choose this option, the dividends will be paid directly to your bank account.
- Reinvestment Option: Instead of receiving the dividends in cash, the dividends can be reinvested to purchase additional units of the Nifty BeES ETF, further compounding your investment.
Dividend Yield:
- The dividend yield of Nifty BeES is reflective of the dividend income generated by the Nifty 50 companies.
- Typically, the dividend yield is low compared to other income-focused investments, as the Nifty 50 Index primarily consists of growth-oriented companies that reinvest their profits rather than paying high dividends.
Tax Implications:
- Dividends received from Nifty BeES are subject to Dividend Distribution Tax (DDT) as per Indian tax laws. Additionally, investors may be subject to TDS on the dividend amount.
- For Indian residents, the tax on dividends is 10% (if the total dividend income exceeds ₹5,000 in a financial year). For non-residents, the TDS rate may be higher depending on the tax treaty between India and the investor’s country of residence.
Recent Dividend History:
Nifty BeES tends to pay dividends when there is a significant dividend distribution from companies in the Nifty 50. You can check specific dividend dates and amounts in the fund’s fact sheet or through your brokerage platform.
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