Nippon India ETF Gold BeES is an open-ended exchange-traded fund (ETF) that aims to closely track the domestic price of physical gold. Launched on March 8, 2007, by Nippon India Mutual Fund, the ETF provides investors with an opportunity to gain exposure to gold price movements in India without the need to hold physical gold.
Investment Objective:
The primary goal of Nippon India ETF Gold BeES is to generate returns that, before expenses, correspond to the performance of the domestic price of gold through investments in physical gold. However, there is no assurance or guarantee that the investment objective will be achieved.
Fund Details:
- Ticker Symbol: GOLDBEES
- Benchmark: Domestic price of gold
- Fund Manager: Vikram Dhawan (since February 2022)
- Asset Under Management (AUM): ₹9,781.14 crore (as of April 12, 2024)
- Purity of Gold Held: All gold bullion held in the scheme’s allocated account with the custodian has a fineness (purity) of 99.5% (995 parts per 1,000).
Performance Overview (as of August 31, 2024):
Over the past year, Nippon India ETF Gold BeES has delivered a Compound Annual Growth Rate (CAGR) of 19.72%. Over three and five years, the CAGR stands at 13.87% and 11.50%, respectively. Since its inception, the fund has achieved a CAGR of 11.20%.
Trading Information:
Investors can buy or sell units of Nippon India ETF Gold BeES on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) during trading hours. The minimum investment on the exchange is one unit, which approximately represents 0.01 gram of gold. As of April 12, 2024, the price per unit was ₹61.91.
Key Benefits:
- Liquidity: The ETF is listed and traded on major stock exchanges, providing investors with the flexibility to enter or exit positions during trading hours.
- Cost Efficiency: Investing in the ETF eliminates the need for storage and security concerns associated with physical gold.
- Purity Assurance: The fund ensures that all gold holdings meet the specified purity standards.
Considerations:
- Market Risk: The value of the ETF is directly linked to the domestic price of gold, which can be volatile.
- Tracking Error: While the fund aims to replicate the performance of gold prices, there may be slight deviations due to expenses and other factors.
Is Nippon India ETF Gold BeES Good?
Whether Nippon India ETF Gold BeES is a good investment depends on your financial goals, risk appetite, and market conditions. Here are the key points to consider:
Pros of Investing in Nippon India India ETF Gold BeES
- Convenient Exposure to Gold – Offers an easy way to invest in gold without worrying about physical storage.
- Highly Liquid – Traded on NSE & BSE, making it easy to buy and sell during market hours.
- Cost-Effective – Lower expense ratio (0.82%) compared to physical gold investments.
- Diversification & Hedge Against Inflation – Gold is a traditional safe-haven asset during economic downturns.
- Purity Assurance – Backed by physical gold of 99.5% purity.
Cons & Risks to Consider
- Gold Price Volatility – Returns are directly linked to gold prices, which can fluctuate.
- No Interest or Dividends – Unlike stocks or bonds, gold ETFs don’t generate income.
- Tracking Error – Small deviation from actual gold prices due to fund expenses.
- Long-Term Performance – Historically, gold has underperformed equities over long periods.
Is It a Good Investment?
- If you want stability & inflation protection, YES, it’s a great choice.
- If you seek high growth, NO, stocks & equity funds offer better long-term returns.
- If you want portfolio diversification, YES, a small allocation (5-15%) to gold ETFs can balance risk.
Nippon India ETF Gold BeEs Review
Nippon India ETF Gold BeES is an open-ended exchange-traded fund (ETF) that aims to mirror the performance of physical gold in the domestic market. Launched in March 2007 by Nippon India Mutual Fund, it offers investors a convenient avenue to gain exposure to gold price movements without the challenges of holding physical gold.
Key Highlights:
- Net Asset Value (NAV): As of February 13, 2025, the NAV stands at ₹71.74.
- Assets Under Management (AUM): The fund manages assets worth ₹16,975.8 crore as of December 31, 2024.
- Expense Ratio: The expense ratio is 0.82% for the regular plan as of January 31, 2025.
Performance Overview:
The ETF has demonstrated consistent returns over various time frames:
- 1-Year Return: 33.52%
- 3-Year CAGR: 19.28%
- 5-Year CAGR: 14.58%
- Since Inception: 11.88%
These figures are closely aligned with the benchmark returns, indicating effective tracking of gold prices.
Investment Strategy:
The fund invests primarily in physical gold, ensuring a purity of 99.5%. This strategy provides investors with returns that closely correspond to the domestic price of gold.
Liquidity and Trading:
Units of Nippon India ETF Gold BeES are listed and traded on major stock exchanges like the NSE and BSE, offering high liquidity. Investors can buy or sell units during regular trading hours, with the minimum investment being one unit.
Risk Considerations:
While the ETF offers a convenient way to invest in gold, potential investors should be aware of certain risks:
- Market Risk: The value of the ETF is directly linked to gold prices, which can be volatile.
- Tracking Error: Minor deviations from actual gold prices may occur due to fund expenses and other factors.
- No Regular Income: Unlike dividend-yielding stocks or interest-bearing instruments, gold ETFs do not provide regular income.
Conclusion:
Nippon India ETF Gold BeES serves as a viable option for investors seeking exposure to gold without the complexities of physical ownership. Its strong performance, high liquidity, and cost-effectiveness make it an attractive choice for portfolio diversification and as a hedge against inflation. However, it’s essential to assess individual financial goals and risk tolerance before investing.
Nippon India ETF Gold BeES Give Returns
As of February 14, 2025, the Net Asset Value (NAV) of Nippon India ETF Gold BeES stands at ₹71.74.
Below is a table summarizing the fund’s performance over various periods:
| Period | CAGR (%) | Value of ₹10,000 Invested |
| 1 Year | 19.72 | ₹11,972 |
| 3 Years | 13.87 | ₹14,766 |
| 5 Years | 11.50 | ₹17,244 |
| Since Inception | 11.20 | ₹64,029 |
These figures indicate that an investment of ₹10,000 in Nippon India ETF Gold BeES would have grown to ₹11,972 over 1 year, ₹14,766 over 3 years, ₹17,244 over 5 years, and ₹64,029 since its inception on March 8, 2007.
Strengths of Nippon India ETF Gold BeES
1) Easy & Secure Gold Investment
- No need to worry about storage, theft, or purity verification like with physical gold.
- Gold is held by the fund in secure vaults with strict regulatory oversight.
2) High Liquidity
- Listed and traded on NSE & BSE, allowing easy buying and selling during market hours.
- No restrictions on when you can exit, unlike gold mutual funds or sovereign gold bonds.
3) Low Expense Ratio
- Expense ratio of 0.82% makes it cost-effective compared to buying physical gold (which includes making charges and storage costs).
4) 99.5% Purity Assurance
- Gold held by the ETF is 99.5% pure, ensuring authenticity and standardization.
- Eliminates the risk of buying counterfeit or impure gold.
5) Hedge Against Inflation & Currency Depreciation
- Gold is a safe-haven asset that tends to rise in value during inflation or economic uncertainty.
- Helps protect wealth when the Indian Rupee depreciates against the US Dollar.
6) No Entry/Exit Load
- Unlike mutual funds, there are no additional charges for buying/selling units on the stock exchange.
7) No Lock-in Period
- Unlike sovereign gold bonds (SGBs), which have an 8-year tenure, you can buy or sell Gold BeES anytime.
8) Diversification Benefit
- Gold typically moves opposite to stocks and bonds, helping reduce overall portfolio risk.
- A 5-15% allocation to gold ETFs is recommended in a well-balanced portfolio.
Risks of Nippon India ETF Gold BeES
1) Gold Price Volatility
Gold prices fluctuate based on global factors, such as:
- US Federal Reserve interest rate decisions.
- Inflation rates and geopolitical risks.
- Central banks’ gold reserves and demand from major buyers like China & India.
2) No Regular Income
- Unlike stocks (which provide dividends) or bonds (which give interest payments), gold ETFs do not provide any passive income.
- Returns depend entirely on capital appreciation (gold price movement).
3) Tracking Error
Gold BeES aims to match the domestic price of gold, but slight differences may occur due to:
- Fund management fees.
- Buying/selling costs of physical gold.
- Time lag between gold price movement and ETF adjustments.
4) Tax Implications
- Short-Term Capital Gains Tax (STCG): If sold within 3 years, gains are added to your income and taxed as per your tax slab.
- Long-Term Capital Gains Tax (LTCG): After 3 years, gains are taxed at 20% with indexation benefits (which reduces taxable income by adjusting for inflation).
5) Long-Term Growth Potential vs. Equities
- Historically, gold has underperformed equities over long periods.
- While gold preserves wealth, equity investments create wealth through compounding.
6) Exchange Liquidity Risk
- While Gold BeES is highly liquid, if market demand falls, bid-ask spreads could widen, making it slightly harder to exit quickly at the desired price.
Final Verdict: Is Nippon India ETF Gold BeES a Good Investment?
YES, if:
- You want a safe, easy, and liquid way to invest in gold without physical hassles.
- Portfolio diversification and a hedge against inflation.
- You are a medium- to long-term investor (3+ years).
NO, if:
- You seek high growth like equities over the long term.
- Regular income from your investments.
- You are trading gold in the short term (due to price volatility).
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