Nippon India Etf Nifty Bees: A Beginner's Guide To Investing

Nippon India ETF Nifty 50 BeES is an open-ended index scheme listed on the exchange in the form of an ETF tracking the Nifty 50 Index. The scheme aims to provide returns close to the total return of stocks as represented by the Nifty 50 Index. It is an Exchange-Traded Fund listed on the capital market (rolling settlement) segment of the NSE. The scheme employs a passive investment approach designed to track the performance of the Nifty 50 TRI and seeks to achieve its goal by investing in securities constituting the Nifty 50 Index in the same proportion as the index.

Investment Objective

The Nippon India ETF Nifty 50 BeES is an open-ended index scheme, listed on the Exchange in the form of an ETF tracking the Nifty 50 Index. The investment objective of this scheme is to provide returns that closely correspond to the total returns of the securities represented by the Nifty 50 Index.

The scheme aims to provide returns close to the total return of stocks as represented by the Nifty 50 Index. It is an Exchange-Traded Fund (ETF) listed on the capital market (rolling settlement) segment of the NSE. The scheme is mandated to invest at least 80% of its assets in large-cap stocks at all times and employs a passive investment approach. This means that it replicates the portfolio of its chosen benchmark index, the Nifty 50 TRI, by investing in the securities that constitute the Nifty 50 Index in the same proportion as the index.

The scheme is suitable for investors seeking long-term capital appreciation and investment in securities covered by the Nifty 50 Index. However, there is no assurance or guarantee that the investment objective of the scheme will be achieved.

When investing in this scheme, it is important to note that it has a very high-risk level and is suitable for conservative equity investors. It is recommended to invest for at least five years to expect gains that beat the inflation rate and returns of fixed-income options. Additionally, investors must redeem their investment only through the SIP route and avoid investing if they need to redeem their investment in less than five years.

Investment Returns

The Nipponsection name> Nippon India ETF Nifty 50 BeES fund aims to provide returns that closely correspond to the total returns of the securities represented by the Nifty 50 Index. This Exchange Traded Fund (ETF) is listed on the capital market (rolling settlement) segment of the NSE. The scheme employs a passive investment approach, investing in the securities that constitute the Nifty 50 Index in the same proportion as the index.

The fund has delivered 15.80% returns since its inception 22 years ago. As of April 4, 2024, the Net Asset Value (NAV) of the fund was ₹248.2109. The fund does not guarantee any returns, and there is a warning that investors should not invest if they need to redeem their investment in under five years.

If you invest in this fund for five years or more, you can expect gains that exceed the inflation rate and returns on fixed-income options. However, you should be prepared for fluctuations in your investment value. This is a large-cap fund that invests in big companies, and such funds tend to fall less when stock prices fall, making them more suited to conservative equity investors.

When it comes to taxation, if the mutual fund units are sold after one year from the date of investment, gains up to Rs 1 lakh in a financial year are exempt from tax. Gains over Rs 1 lakh are taxed at a rate of 10%. If the units are sold within one year of the investment, the entire amount of gain is taxed at a rate of 15%. No tax is payable as long as you continue to hold the units. Dividends are taxed according to the investor's tax slab, and if an investor's dividend income exceeds Rs. 5,000 in a financial year, a TDS of 10% is deducted by the fund house before distributing the dividend.

Capital Gains Taxation

If you sell mutual fund units after 1 year from the date of investment, gains up to Rs 1 lakh in a financial year are exempt from tax. Gains over Rs 1 lakh are taxed at a rate of 10%. If you sell mutual fund units within 1 year from the date of investment, the entire amount of gain is taxed at a rate of 15%.

No tax is payable as long as you continue to hold the units. Dividends are added to the income of the investors and taxed according to their respective tax slabs. Furthermore, if an investor's dividend income exceeds Rs. 5,000 in a financial year, the fund house also deducts a TDS of 10% before distributing the dividend.

Dividend Taxation

Dividends are added to the income of the investors and taxed according to their respective tax slabs. If an investor's dividend income exceeds Rs. 5,000 in a financial year, the fund house also deducts a TDS of 10% before distributing the dividend.

If the mutual fund units are sold after 1 year from the date of investment, gains up to Rs 1 lakh in a financial year are exempt from tax. Gains over Rs 1 lakh are taxed at a rate of 10%.

If the mutual fund units are sold within 1 year from the date of investment, the entire amount gained is taxed at a rate of 15%.

Where to Invest

Nippon India ETF Nifty 50 BeES is an open-ended index scheme listed on the exchange in the form of an ETF tracking the Nifty 50 Index. The scheme aims to provide returns that closely correspond to the total returns of the securities represented by the Nifty 50 Index.

You can invest in the Nippon India ETF Nifty 50 BeES fund directly from the website of the fund house, Nippon India Mutual Fund. You can also invest through platforms like MF Central and MF Utility. Most banks also act as mutual fund distributors, so you can connect with your bank for assistance.

When investing in the Nippon India ETF Nifty 50 BeES, there are two options: regular and direct. The only difference between the two is the commission paid to your mutual fund broker/distributor. As an investor, you do not need to pay any additional fees to purchase either option. However, regular funds have a higher expense ratio, while direct funds have a lower expense ratio due to the commission paid to the broker/distributor.

The Nippon India ETF Nifty 50 BeES fund can be purchased through a Systematic Investment Plan (SIP) or a lump sum investment. A SIP allows you to invest a small amount regularly, such as Rs. 500, while a lump sum investment is a one-time larger investment.

It is important to note that there is no lock-in period for the Nippon India ETF Nifty 50 BeES fund, and you should only invest if you do not need to redeem your investment in less than five years.

Frequently asked questions