What is Nifty BeEs? How to invest in it?

Is it possible to enter the stock market at a low cost and relatively lower risk than individual stocks? The Exchange Traded Fund [ETF] offers you that option. An ETF is a single fund that contains a diversified collection of stocks. It can be a great entry point into the stock market for a new investor and good investment for seasoned investors. And one such ETF that follows the Nifty 50 Index is the Nifty BeES.  

What is Nifty BeES?

The Nifty BeES is an ETF offered by Nippon India AMC and aims to offer returns similar to the Nifty 50 index. It is India’s first ETF, introduced in January 2002. As an ETF, the Nifty BeES combines the benefits of both mutual funds and stocks.

The Nifty BeES is traded on the stock exchanges like NSE and BSE. Investing in one unit of the Nifty BeES gives you exposure to the whole Nifty 50 index, consisting of 50 different stocks from 13 different sectors in the Indian market. Therefore, returns from investing in the Nifty BeES mimic the returns of the Nifty 50 index.

Additional read: What is ETF? Advantages of Exchange Traded Funds

How to invest in Nifty BeES?

To invest in Nifty BeES, you need to open a trading and demat account. Just as you would purchase shares, you can buy Nifty BeES units during trading hours on the stock exchange at prevailing market prices. Transacting in Nifty BeES could attract brokerage costs similar to buying shares. You can choose either the lump-sum mode or a Systematic Investment plan [SIP] to invest in Nifty BeES.

Lump-sum mode: You can use this option to buy Nifty BeES units in real time prices. The lump-sum mode can be ideal when markets are corrected cyclically.

SIP investing. Choose a date to start your monthly SIPs in Nifty BeES. The SIP option allows you to invest at every level of the market. It can be an ideal approach to begin a disciplined and regular investment mode for the long run.

What are the advantages of investing in Nifty BeES?

Diversification Benefit:

Investing in the Nifty BeES ETF helps diversify your investment portfolio. It offers exposure to 50 different stocks from 13 different sectors. This ensures that your risks are diversified as well.

Simple to Invest In:

To buy and sell Nifty BeES units, you need a trading and demat account. Also, you can choose to trade in it like stocks.

High Liquidity:

The Nifty BeES is listed on the stock exchanges and is regarded as a highly-liquid ETF. That’s because it is the oldest ETF in the market, with several takers for it. Hence, you can exit your position at your inconvenience.

Transparent and Easy to Follow:

Since the ETF mimics the Nifty 50 index, you can know the exact composition of your investment. All you have to do is follow the Nifty 50 index and monitor the readily-available information on multiple platforms, making it easy to for you to keep track.

Inexpensive investment:

You can buy a single unit of the ETF and enjoy the diversification benefits of 50 different companies. Also, since it is a passive investment strategy, its Total Expense Ratio is nominal. 

Takeaway

Investing in the Nifty BeES ETF is easy and convenient. It provides you with consistent returns and tracks one of the most-reliable indexes in the country. All you need is a trading and demat account to invest in Nifty BeES. Open your trading and demat account with ICICI Direct now to start investing.

Disclaimer – ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100.  AMFI Regn. No.: ARN-0845. We are distributors for Mutual funds. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. Please note, Mutual Fund related services are not Exchange traded products and I-Sec is just acting as distributor to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest.  I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.