Nifty Bees (N) 1
Nifty Bees (N) 1
Nifty Bees (N) 1
About Benchmark
Only Mutual Fund in India with exclusive focus on
quantitative and passive investment management
Monitored by Securities and Exchange Board of India
(SEBI)
Managed proactively by the Trustees, separate from the
Asset management firm
Trustees meet compulsorily once in 2 months and report to
SEBI every quarter
The Compliance Officer reports independently and directly
to the Trustees bi-monthly
Benchmark
Benchmark is also regulated by the National Stock Exchange of India
rules and bye laws
The securities and other assets of the Fund are held by ABN AMRO
Introduction to Nifty BeES
First Exchange Traded Fund (ETF) in India
Combination of a share and a mutual fund unit
Real-time Trading on NSE
Real-time Indicative NAV on www.benchmarkfunds.com
Available across 4000 NSE terminals in 400 cities
Tracks the S&P CNX Nifty Index
Priced at 1/10th of the Nifty Index
Investment management fees is 0.35% and the total expense ratio is 0.80%
per annum, the lowest in India
Structured as a Mutual Fund under the SEBI 1996 regulations
History of ETFs
First ETF came in 1993 on S&P500 called SPDRs
SPDRs and QQQs (ETF on Nasdaq 100) are the most actively
traded ETFs
Globally, there are currently 348 ETFs managed by 43
managers across 31 exchanges.
On February 28 , 2005 the ETF market globally was $313.60
billion (Source: MSDW)
ETFs launched across the world include Japan in September
2001 and in Korea and Singapore in 2002
Nearly 60% of trading volumes on American Stock Exchange
comprises of ETFs
S&P CNX Nifty Index
India’s premier benchmark index introduced in November
1995 and was developed as a basis for introducing index based
derivatives
Only companies having a high degree of liquidity defined in
terms impact cost are included as constituents of the Index
Nifty is calculated using the market capitalisation weighted
method
Impact cost of the S&P CNX Nifty is 0.10% for a portfolio size
of Rs.5 million
Represents about 66% of total market capitalisation
Correlation with Morgan Stanley Capital International
(MSCI) India Index is about 97% over last 3 years
Attracts most of the Futures of over $ 1 bn daily. The
underlying trades over $ 1.2 bn daily.
ETFs Growth - Global
Growth of International ETF
300,000 350
300
200,000 250
200
150
100,000 100
50
- 0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Assets 811 1,121 2,302 5,268 8,234 17,596 39,605 74,337 104,80 141,62 212,01 247,96
Seller
ETF
Liquidity
Intra-day
Buy/Sell
Nifty BeES
Junior BeES
0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00%
Source: www.mutualfundsindia.com
Nifty BeES vs. Open ended Index funds
Attribute Nifty BeES Traditional Open
Ended Index Funds
Traded throughout the day Yes No
Low Expense Ratio Yes No
Trade at any brokerage firm Yes No
Hedging Tool Yes No
Ability to lend units Yes No
Tracking Best Average
NAV Indicative Real time Daily
Liquidity Fund / Stock market Fund
Structure Insulates long term Does not insulate
investor from short term long term investors
trading activity from short term
investor activity
Independent Research Review
“Nifty BeES seems the best index fund when it comes to all three
parameters; Entry loads, Expense ratios and Tracking Error.It is
India’s first and only Exchange Traded Fund or simply put, a next
generation index fund.”
- Business World, September 30, 2002