Nippon India ETF Junior BeES is an open-ended index exchange-traded fund (ETF) managed by Nippon India Mutual Fund. The fund aims to provide returns that closely correspond to the performance of the Nifty Next 50 Index by investing in the securities constituting this index.
Fund Overview:
- Launch Date: February 21, 2003
- Benchmark Index: Nifty Next 50 Total Return Index (TRI)
- Fund Manager: Himanshu Mange (since December 2023)
- Expense Ratio: 0.17%
- Asset Under Management (AUM): ₹3,194 crore (as of July 31, 2023)
- Latest NAV (as of December 10, 2024): ₹779.0370
Investment Details:
- Minimum Investment: The minimum number of units that can be bought or sold on the exchange is 1 unit and in multiples of 1 unit.
- Entry and Exit Load: Nil
- Dematerialization: Units of the scheme are available only in dematerialized (electronic) form.
Portfolio Composition (as of July 31, 2023):
- Equity: 99.82%
- Cash & Cash Equivalents: 0.18%
How to Invest:
Investors can purchase units of Nippon India ETF Junior BeES through the National Stock Exchange (NSE) or directly from Nippon India Mutual Fund’s website. The fund is also available on various investment platforms and through mutual fund distributors.
Additional Information:
The fund’s NAV is declared on every business day and is available on the Association of Mutual Funds in India (AMFI) website by 11:00 p.m. on the day of declaration.
For a comprehensive understanding of the fund’s features, performance, and portfolio, investors are advised to refer to the official fund page on Nippon India Mutual Fund’s website.
Nippon India ETF Junior BeES Returns:
As of November 30, 2024, the fund’s performance is as follows:
| Period | Fund Returns (%) | Benchmark Returns (%) |
| 1 Year | 47.83% | 48.24% |
| 3 Years (CAGR) | 19.89% | 20.18% |
| 5 Years (CAGR) | 20.52% | 20.83% |
| Since Inception (CAGR) | 20.17% | 21.22% |
Risk Considerations:
Investing in the Nippon India ETF Junior BeES carries inherent market risks, including:
- Market Volatility: The fund’s value can fluctuate due to changes in the market prices of its underlying securities.
- Tracking Error: The fund may not perfectly replicate the performance of the Nifty Next 50 Index due to factors like expenses, cash holdings, and regulatory constraints.
Investment Suitability:
This ETF is suitable for investors who:
- Seek long-term capital appreciation by investing in a diversified portfolio of companies that are part of the Nifty Next 50 Index.
- Are willing to accept high levels of risk associated with equity investments.
- Prefer a passive investment strategy that mirrors the performance of a specific index.
Conclusion:
Nippon India ETF Junior BeES offers investors an opportunity to gain exposure to the Nifty Next 50 Index through a passive investment approach. However, potential investors should carefully assess their risk tolerance and investment objectives before investing in this ETF. Consulting with a financial advisor is recommended to ensure alignment with individual financial goals and risk appetite.
Is Nippon India ETF Junior BeES a Good Investment?
Whether Nippon India ETF Junior BeES is a good investment depends on your investment goals, risk appetite, and market outlook. Here’s a breakdown to help you decide:
Reasons to Invest:
1) High Growth Potential 📈
- The Nifty Next 50 Index consists of companies that are potential future Nifty 50 entrants. Historically, some of these stocks have delivered strong returns.
- 5-year CAGR of ~20.52% shows solid past performance.
2) Diversification & Passive Investing 📊
- This ETF provides diversified exposure to 50 mid-to-large-cap stocks across sectors.
- As a passive fund, it simply mirrors the Nifty Next 50 Index, meaning lower expense ratio (0.17%) compared to actively managed funds.
3) No Fund Manager Bias
- Since it’s passively managed, there’s no human intervention, avoiding fund manager bias in stock selection.
4) Lower Cost Compared to Mutual Funds
- No exit load & lower expense ratio than actively managed funds make it cost-efficient.
5) Liquidity & Transparency
- Since it’s an ETF, it can be bought/sold anytime on NSE/BSE like a stock.
- Holdings are disclosed daily, ensuring transparency.
Risks & Downsides:
1) Market Volatility
- Being equity-based, it can be highly volatile, especially during market downturns.
- Nifty Next 50 is historically more volatile than Nifty 50.
2) Tracking Error
- The fund may not perfectly match the Nifty Next 50 due to minor cash holdings or rebalancing delays.
3) Liquidity Risk in Low Market Conditions
- While ETFs trade on exchanges, bid-ask spreads may be wider in times of low volume.
4) Not Ideal for Short-Term Investors
- Since it’s an equity-based ETF, it is best suited for long-term investors (5+ years) rather than short-term traders.
Final Verdict:
- Nippon India ETF Junior BeES is a strong option for long-term investors seeking high-growth opportunities with a passive, low-cost approach.
- However, it carries higher volatility than Nifty 50, so be prepared for short-term fluctuations.
- If you can hold for the long term and stomach volatility, it’s a great investment.
- If you’re risk-averse, consider safer alternatives like Nifty 50 ETFs.
Nippon India ETF Junior BeES Dividend
Nippon India ETF Junior BeES is an exchange-traded fund (ETF) that aims to replicate the performance of the Nifty Next 50 Index by investing in its constituent securities. As an ETF, it primarily focuses on capital appreciation rather than regular income distribution through dividends.
Dividend Distribution:
Historically, this ETF has not declared regular dividends to its unit holders. The fund’s structure and investment strategy are designed for growth by tracking the Nifty Next 50 Index, and any returns are typically reflected in the fund’s Net Asset Value (NAV) appreciation rather than dividend payouts.
Investor Considerations:
- Growth-Oriented Investors: Those seeking capital appreciation through exposure to the Nifty Next 50 Index may find this ETF suitable, as it allows participation in the potential growth of the underlying securities.
- Income-Seeking Investors: Investors looking for regular income through dividends might consider other investment options, such as dividend-yielding mutual funds or stocks, as this ETF does not provide consistent dividend payouts.
Conclusion:
Nippon India ETF Junior BeES is tailored for investors aiming for long-term capital growth by mirroring the performance of the Nifty Next 50 Index. It does not offer regular dividends, making it more suitable for growth-focused investors rather than those seeking regular income.
Portfolio of Nippon India ETF Junior BeES
Nippon India ETF Junior BeES is an exchange-traded fund (ETF) designed to mirror the performance of the Nifty Next 50 Index, which includes 50 companies ranked immediately after the Nifty 50 in terms of market capitalization. This ETF offers investors exposure to these companies, providing potential for growth as they may progress toward inclusion in the Nifty 50.
Portfolio Composition:
As of November 29, 2024, the ETF’s portfolio closely aligns with the Nifty Next 50 Index, encompassing a diverse range of sectors. While specific holdings may vary due to market movements and periodic rebalancing, the ETF typically includes companies from sectors such as:
- Financial Services: Including banks and financial institutions
- Consumer Goods: Encompassing both durable and non-durable goods manufacturers
- Pharmaceuticals: Covering major pharmaceutical companies
- Information Technology: Including IT services and software firms
- Energy: Comprising oil, gas, and power companies
- Automobiles: Including manufacturers of vehicles and auto components
Top Holdings:
While the exact holdings can change, some of the prominent companies often found in the Nifty Next 50 Index, and consequently in the ETF, include:
- Avenue Supermarts Ltd.
- Pidilite Industries Ltd.
- Godrej Consumer Products Ltd.
- Larsen & Toubro Infotech Ltd.
- ICICI Lombard General Insurance Company Ltd.
Sector Allocation:
The ETF’s sector allocation mirrors that of the Nifty Next 50 Index, providing diversified exposure across various industries. This diversification helps in mitigating sector-specific risks and capitalizing on growth across the broader market.
Investment Objective:
The primary objective of Nippon India ETF Junior BeES is to deliver returns that, before expenses, closely correspond to the returns of securities represented by the Nifty Next 50 Index. However, there is no assurance or guarantee that the investment objective will be achieved.
Conclusion:
Nippon India ETF Junior BeES offers investors a cost-effective and efficient way to gain exposure to the Nifty Next 50 Index’s constituents. By investing in this ETF, individuals can participate in the growth potential of companies that are on the cusp of entering the Nifty 50, thereby potentially enhancing their investment returns over the long term.
Strengths of Nippon India ETF Junior BeES
1) High Growth Potential
- Invests in Nifty Next 50 stocks, which include companies that are potential future Nifty 50 entrants.
- These stocks have historically shown strong performance and growth potential.
2) Diversification
- Provides exposure to 50 large and mid-cap companies across multiple sectors.
- Reduces the impact of poor performance in any single stock or sector.
3) Low Expense Ratio (0.17%)
- Cheaper than actively managed mutual funds, making it cost-effective for long-term investors.
4) Passive Investing – No Fund Manager Bias
- The ETF mirrors the Nifty Next 50 Index, avoiding human bias and active management risks.
5) Liquidity & Transparency
- Listed on NSE & BSE, meaning investors can buy/sell anytime during market hours.
- Holdings are disclosed daily, unlike traditional mutual funds that disclose monthly.
6) No Exit Load
- Unlike mutual funds, there are no exit charges, making it a flexible investment.
Risks of Nippon India ETF Junior BeES
1) High Volatility
- Nifty Next 50 stocks tend to be more volatile than Nifty 50 stocks.
- Greater price fluctuations can occur, making it riskier than large-cap ETFs.
2) Market Risk
- Subject to market downturns, and returns are not guaranteed.
- If the stock market declines, this ETF’s value will also drop.
3) Tracking Error
- The ETF may not perfectly replicate the Nifty Next 50 Index due to minor differences in holdings and expenses.
- Tracking error of ~0.1%-0.3% may affect returns.
4) Liquidity Risk
- Though listed, low trading volumes can lead to wider bid-ask spreads, making it difficult to sell at the desired price.
5) No Regular Income (Dividends)
- Unlike dividend-paying stocks or mutual funds, this ETF does not offer regular dividends.
6) Not Ideal for Short-Term Investors
- This ETF is better suited for long-term investors (5+ years).
- Short-term investors may experience losses due to volatility.
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