What are ETFs?
Exchange Traded Funds are essentially Index Funds that are listed and traded on exchanges like stocks. Until the development of ETFs, previously this was not possible. Globally, ETFs have opened a whole new panorama of investment opportunities for retail as well as institutional money managers. ETFs enable investors to gain broad exposure to entire stock markets in different Countries and specific sectors with relative ease, on a real-time basis and at a lower cost than many other forms of investing.
An ETF is a basket of stocks that reflects the composition of an Index, such as CNX Nifty or BSE Sensex. The ETFs trading value is based on the net asset value of the underlying stocks that it represents. Think of it as a Mutual Fund that you can buy and sell in real-time at a price that changes throughout the day.
Exchange Traded Funds are essentially Index Funds that are listed and traded on exchanges like stocks. Until the development of ETFs, previously this was not possible. Globally, ETFs have opened a whole new panorama of investment opportunities for retail as well as institutional money managers. ETFs enable investors to gain broad exposure to entire stock markets in different Countries and specific sectors with relative ease, on a real-time basis and at a lower cost than many other forms of investing.
An ETF is a basket of stocks that reflects the composition of an Index, such as CNX Nifty or BSE Sensex. The ETFs trading value is based on the net asset value of the underlying stocks that it represents. Think of it as a Mutual Fund that you can buy and sell in real-time at a price that changes throughout the day.
Introduction to Nifty BeES
Nifty BeES is the first Exchange Traded Fund (ETF) in India. It is an combination of a share and a mutual fund unit. It allows you to?trade Real-time on NSE and gives you Real-time Indicative NAV. With Nifty BeES you can tracks the S&P CNX Nifty Index. Nifty BeES is Priced at 1/10th of the Nifty Index and the Investment management fee is 0.35% and the total expense ratio is 0.80% per annum, probably the lowest in India. It Structures as a Mutual Fund under the SEBI 1996 regulations.
What is S&P CNX Nifty Index
S&P CNX Nifty Index is India?s premier benchmark index introduced in November 1995. It was developed as a basis for introducing Index Based Derivatives. S&P CNX Nifty is calculated using the Free Float methodology. Only companies having a high degree of liquidity defined in terms of low Impact Cost are included as Constituents of the Index. Impact Cost of the S&P CNX Nifty is 0.06% for a portfolio size of Rs. 50 Lakhs and it represents about 53.61% of the Total Market Capitalization of NSE as on 31st Dec 2010.
What are benefits of Nifty BeES?
Simple - Can be bought/ sold on NSE like a share real-time.
Economical - No load scheme. Annual expense is one of the lowest for any mutual fund scheme in India.
Diversification - Its a cost efficient way to invest in a basket of securities.
Equitable Structure - Long term investors insulated from short term trading activity.
Transparent - Investors have access to information on the portfolio constituents represented on a daily basis.
Nifty BeES is the first Exchange Traded Fund (ETF) in India. It is an combination of a share and a mutual fund unit. It allows you to?trade Real-time on NSE and gives you Real-time Indicative NAV. With Nifty BeES you can tracks the S&P CNX Nifty Index. Nifty BeES is Priced at 1/10th of the Nifty Index and the Investment management fee is 0.35% and the total expense ratio is 0.80% per annum, probably the lowest in India. It Structures as a Mutual Fund under the SEBI 1996 regulations.
What is S&P CNX Nifty Index
S&P CNX Nifty Index is India?s premier benchmark index introduced in November 1995. It was developed as a basis for introducing Index Based Derivatives. S&P CNX Nifty is calculated using the Free Float methodology. Only companies having a high degree of liquidity defined in terms of low Impact Cost are included as Constituents of the Index. Impact Cost of the S&P CNX Nifty is 0.06% for a portfolio size of Rs. 50 Lakhs and it represents about 53.61% of the Total Market Capitalization of NSE as on 31st Dec 2010.
What are benefits of Nifty BeES?
Simple - Can be bought/ sold on NSE like a share real-time.
Economical - No load scheme. Annual expense is one of the lowest for any mutual fund scheme in India.
Diversification - Its a cost efficient way to invest in a basket of securities.
Equitable Structure - Long term investors insulated from short term trading activity.
Transparent - Investors have access to information on the portfolio constituents represented on a daily basis.
