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    Nifty Bees (N) 1

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    ankushishwar
    Nifty BeES is India's first Exchange Traded Fund that tracks the S&P CNX Nifty Index. It offers real-time trading on the NSE at 1/10th the price of the Nifty index. With an expense ratio of 0.80% per annum, Nifty BeES has the lowest fees of any fund in India. As an ETF, it provides benefits such as intraday liquidity, transparency of holdings, and the ability to hedge positions. Research has found that Nifty BeES has the best tracking performance and lowest costs compared to traditional open-ended index funds in India.

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    Nifty Bees (N) 1

    Uploaded by

    ankushishwar
    85 views14 pages
    Nifty BeES is India's first Exchange Traded Fund that tracks the S&P CNX Nifty Index. It offers real-time trading on the NSE at 1/10th the price of the Nifty index. With an expense ratio of 0.80% per annum, Nifty BeES has the lowest fees of any fund in India. As an ETF, it provides benefits such as intraday liquidity, transparency of holdings, and the ability to hedge positions. Research has found that Nifty BeES has the best tracking performance and lowest costs compared to traditional open-ended index funds in India.

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    Nifty BeES is India's first Exchange Traded Fund that tracks the S&P CNX Nifty Index. It offers real-time trading on the NSE at 1/10th the price of the Nifty index. With an expense ratio of 0.80% per annum, Nifty BeES has the lowest fees of any fund in India. As an ETF, it provides benefits such as intraday liquidity, transparency of holdings, and the ability to hedge positions. Research has found that Nifty BeES has the best tracking performance and lowest costs compared to traditional open-ended index funds in India.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    85 views14 pages

    Nifty Bees (N) 1

    Uploaded by

    ankushishwar
    Nifty BeES is India's first Exchange Traded Fund that tracks the S&P CNX Nifty Index. It offers real-time trading on the NSE at 1/10th the price of the Nifty index. With an expense ratio of 0.80% per annum, Nifty BeES has the lowest fees of any fund in India. As an ETF, it provides benefits such as intraday liquidity, transparency of holdings, and the ability to hedge positions. Research has found that Nifty BeES has the best tracking performance and lowest costs compared to traditional open-ended index funds in India.

    Copyright:

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    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 14

    Nifty BeES

    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

    No. Of ETF 3 3 4 21 21 31 33 92 202 280 282 318

    Assets No. Of ETF

    Source: Bloomberg, Morgan Stanley Research


    How Nifty BeES work
    Primary market Secondary market

    Seller

    Cash Nifty BeES


    Authorised
    Participants / Buy / sell
    Financial NSE
    Market making /
    Institutions
    Arbitrage
    Creation Redemption Nifty BeES
    Cash
    in-kind in-kind
    Buyer
    Fund
    ETF Liquidity
    Underlying Equity
    Futures (Creation / Redemption
    Process)

    ETF
    Liquidity

    Intra-day
    Buy/Sell

    The notional liquidity of an ETF is the average


    volume of the underlying.
    Nifty BeES Advantages
    Simple – Can be bought/ sold on NSE like a share…real-time
    Economical – No load scheme. Annual expense one of the lowest
    for any mutual fund scheme in India.
    Diversification – It’s 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 represented on a daily basis
    Premium/Discount to NAV – Between +&-0.5%
    (Source: Business Standard)
    Nifty BeES Details
    NSE SYMBOL : NIFTYBEES
    ISIN: INF732E01011
    Reuters – NBES.NS
    Bloomberg – NBEES.IN
    Moneyline Telerate – IN;NBFN
    TOTAL EXPENSE RATIO:
    0.80% (upto Rs.1000 mn)
    0.70% (next Rs.4000 mn)
    0.65% (over Rs.5000 mn)

    ENTRY/ EXIT LOAD: NIL


    Tracking Error
    Annualized Six-month Tracking Error (TE) calculated as on July 08, 2004

    Nifty BeES

    Junior BeES

    SBI Magnum Index Fund - Grow th

    UTI Nifty Fund

    Tata Index Fund - Nif ty Plan - Option B

    Birla Index Fund - Grow th

    Tata Index Fund - Nifty Plan - Option A

    Franklin India Index Fund - NSE Nifty Plan - Dividend

    Prudential ICICI Index Fund

    PRINCIPAL Index Fund - Grow th

    HDFC Index Fund - Nif ty Plan

    LIC MF Index Fund - Nifty Plan - Grow th

    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

    “Investing in Nifty BeES is a comparatively better method of


    participating in any market rally”
    - The Economic Times, December 2, 2002
    THANK YOU

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