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One unit of NIFTY BeES is equal to one-tenth of the value of S&P CNX
Nifty Index. On 29.09.09, Nifty 50 index has closed at 5,007; whereas,
NIFTY BeES was quoting at Rs 498 on day’s closing. The small
difference (technically called tracking error) between the underlying Nifty
index and NIFTY BeES is due to the supply and demand factors of NIFTY
BeES on NSE. On 29.09.09, its day’s high was Rs 500 and day’s low was
Rs 495. During the trading hours, the price of NIFTY BeES will fluctuate
in tune with the movement of Nifty 50 index.
If the NIFTY Index goes up to 6,000 in the next six months, the value of
one unit of NIFTY BeES will go up to Rs 600 or if the Nifty Index retraces
to 4,500, then the value of one unit of NIFTY BeES will be readjusted to
Rs 450 in tune with the movement of the general market
The structure of Nifty BeES is such that it does not hurt long-term
investors from the inflow and outflow of short-term investors. This is
because the Fund does not bear extra transaction cost when buying /
selling due to frequent subscriptions and redemptions.
It is traded only on the NSE (face value Rs 10) & it is India’s first ETF
Exit Load: With effect from August 01, 2009, Exit load (technically referred
as CDSC) (if any) of up to 1% of the redemption value charged to the unit
holder on redemption of units shall be retained by each of the Schemes in
a separate account and will be utilized for payment of commissions to
mutual fund advisors and to meet other marketing and selling expenses
Short-term capital gains tax (for holdings of less than one year) is 15 per
cent, plus surcharge (if any) and 3% education cess
STT is applicable for buying and selling of units of NIFTY BeES on NSE
As NIFTY BeES is bought from NSE like any share, brokerage needs to
be paid by the investor for buy/sell transactions
Fifty stocks that are part of NIFTY Index are selected based on high
degree of liquidity
Trading of NIFTY BeES has been going on since its inception on NSE on
28.12.2001
Source: ValueResearch
* Benchmark is S&P CNX NIFTY INDEX
Returns upto 1-year are absolute & above 1-year compounded annual growth rate-CAGR
600
500
400
Rs
300
200
100
0
10/29/2008
11/29/2008
12/29/2008
9/29/2008
1/29/2009
2/28/2009
3/29/2009
4/29/2009
5/29/2009
6/29/2009
7/29/2009
8/29/2009
9/29/2009
Source: NSE. Data as on September 29, 2009.One-year price chart.
In just 11 months, it jumped by 100%! You may not believe it, but it’s true.
5000
4500
4000
3500
Rs lakh
3000
2500
2000
1500
1000
500
0
10/29/2008
11/29/2008
12/29/2008
9/29/2008
1/29/2009
2/28/2009
3/29/2009
4/29/2009
5/29/2009
6/29/2009
7/29/2009
8/29/2009
9/29/2009
The data on the right side of the above table gives an idea about the top holdings of an investor
who is holding NIFTY BeES units worth Rs 5 lakhs on a given day, that is, August 31st, 2009. By
buying units worth Rs 5 lakh, you’re indirectly holding Rs 0.56 lakh of RIL, Rs 0..40 lakh of
Infosys, Rs 0.36 lakh of L&T and so on.
80.00 71.24
70.00
60.00
% holding
50.00
40.00
30.00 22.14 21.79
20.00 11.78 8.61 6.92
10.00
0.00
Energy Financials Technology Diversified Metals Total top 5
sectors
Note: Energy-RIL, ONGC, etc; Financials-ICICI Bk, HDFC, SBI, Axis Bk, etc; Technology-Infoysy,
TCS, etc; Diversified-L&T, Grasim, etc; and Metals-Tata Steel, Sterlite Inds, Jindal S&P, etc
An investor can buy or sell minimum 10,000 units of Nifty BeES and in multiples
thereof directly with the Benchmark Mutual Fund. This route is usually used by
High Networth Individuals (HNIs) and institutions to buy this exchange-trade
product. It is very convenient for corporates also.
For more on this ‘Creation Unit’, HNIs and institutions can visit:
http://www.benchmarkfunds.com/creationUnit.pl?product=nb
1) MARKET RISK: The returns of this fund are linked to the movement of
stock markets in India in general. If the overall market turns adverse, then
the fund will give negative returns to investors
3) TRACKING ERROR RISK: The fund may not be able to invest the entire
corpus in the same proportion as in the underlying S&P CNX Nifty Index
due to certain factors such as: expenses incurred by the fund, corporate
actions, cash balances, dividend payouts, changes in the underlying index
and regulatory policies.
PHILIP A. FISHER:
"In the stock market, a good nervous system is more
important than a good head."