Nippon India ETF Nifty BeES vs UTI Nifty Index Fund: Which is better? (2023)

FAQs

Which is better Nifty index fund or Nifty BeES? ›

Most investors prefer Nifty BeEs over mutual funds because of their cost-effectiveness.

Fund Key Highlights

1. Current NAV: The Current Net Asset Value of the Nippon India ETF Nifty 50 BeES as of Nov 22, 2022 is Rs 199.46 for IDCW option of its Regular plan. 2. Returns: Its trailing returns over different time periods are: -5.07% (1yr), 15.77% (3yr), 12.14% (5yr) and 15.39% (since launch).

The big advantage in favour of an ETF vs index fund is that the Expense ratio in an Index ETF is much lower than an index fund. In India generally index funds have an expense ratio of 1.25% while index ETFs have an expense ratio of about 0.35%. That is just the TER that is debited to the index ETF.

ETFs are often cheaper than index funds if bought commission-free. Index funds often have higher minimum investments than ETFs, although some fund providers, like Fidelity Investments, are dropping their minimum investments on mutual funds.

ETFs are known to be traded in mostly intraday shares via AMCs and can give higher profits. Index Funds are known to trade primarily in securities via AMCs and offer more security in investment. In the comparison to index fund vs etf, ETFs are a much riskier form of investment than Index Funds.

Yes, you can buy Nifty for the long term through ETFs. Nifty BeES is a benchmark ETF that invests in S&P CNX Nifty companies. You can invest in Nifty BeES through a demat account. It is similar to investing in stocks.

It is owned and managed by NSE Indices Limited and as the name indicates, comprises 50 stocks covering 13 sectors.

Yes. Nifty BeES track its underlying index without any pressure or need to outperform the same. This makes it a relatively risk free option for beginners or risk-averse investors.

So both Index Funds and ETFs offer adequate diversification across tens, hundreds, and even thousands of securities. They both also offer a low expense ratio and, of course, potentially long-term solid returns. Therefore, it is safe to say that both ETFs and Index Funds have a lot in common.

Do ETFs return more than index funds? ›

Although they are less flexible than ETFs, index funds deliver the same strong returns over the long term. Another benefit of index funds that makes them ideal for many buy-and-hold investors is their simplicity.

Most notably, ETFs can be traded throughout the trading session, much like a stock, while index fund trades are executed once the market closes. This major difference makes ETFs more attractive to active investors. Additionally, unlike many index funds, there is usually no minimum investment requirements for ETFs.

Because ETFs are bought and sold on the open market like stocks or bonds, the sale of shares from one investor to another has no effect on the fund itself. But when mutual fund shareholders sell shares, they redeem them from the fund directly. That often requires the fund to sell some assets to cover the redemption.

Exchange-traded funds (ETFs) take the benefits of mutual fund investing to the next level. ETFs can offer lower operating costs than traditional open-end funds, flexible trading, greater transparency, and better tax efficiency in taxable accounts.

NIFTY BeES is an equity exchange traded Fund combining the flexibility of stock market investment and the simplicity of equity mutual funds. By simply buying an ETF which is benchmarked to Nifty 50, you will end up buying the index itself.

Both can track indexes as well, however ETFs tend to be more cost effective and more liquid as they trade on exchanges like shares of stock. Mutual funds can provide some benefits such as active management and greater regulatory oversight, but only allow transactions once per day and tend to have higher costs.

Which is best ETF in India? ›

Nifty BeES is Simple: Nifty BeES can be bought / sold like a share through any NSE terminal at prices available on the screen. The underlying portfolio of Nifty BeES very closely replicates that of the S&P CNX Nifty. Hence, Nifty BeES tracks the movement of S&P CNX Nifty.

There is no fund manager bias. As Nifty BeES replicates the S&P CNX Nifty, investors can know at any given point of time where and how much is invested in each stock. Investing in just one unit gives exposure to fifty shares of the S&P CNX Nifty.

Once purchased, these securities can be held in demat form, just like a stock. Latest market information on Nifty Bees can be found here. Because it can be easily bought and sold through the day, Nifty Bees brings to its investors the advantage of liquidity.

Dividend Policy of Nippon India ETF Nifty BeES

The dividend is paid to the unitholder after deducting the applicable taxes at source. The dividend is typically distributed within 30 days from the date of declaration of the dividend.

About Nippon India ETF Nifty 50 BeES

The scheme aims to provide returns close to the total return of stocks as represented by Nifty 50 Index. It is an Exchange Traded Fund which is listed on the capital market (rolling settlement) segment of the NSE.

In order to buy the Index, you'll have to buy the constituent 50 stocks in the same weightage as they hold on the Index. Alternatively, you can also buy NiftyBees, the ETF on the Index which will replicate the performance of the Index.

This can be bought and sold like an ordinary stock on NSE and as it tracks NIFTY S&P CNX Index, it gives you a chance to trade intraday as well as providing you with the real-time NAV.

Best index funds to invest in for November 2022

Fidelity ZERO Large Cap Index. Vanguard S&P 500 ETF. SPDR S&P 500 ETF Trust. iShares Core S&P 500 ETF.

This burgeoning passive index fund industry is dominated by BlackRock, Vanguard, and State Street, which we call the 'Big Three'.

Is UTI Nifty index fund Safe? ›

The fund currently has an Asset Under Management(AUM) of ₹2,23,499 Cr and the Latest NAV as of 23 Nov 2022 is ₹124.14. The UTI Nifty 50 Index Fund Direct Growth is rated Very High risk.

Are ETFs or Index Funds Safer? Neither an ETF nor an index fund is safer than the other, as it depends on what the fund owns. Stocks will always be risker than bonds, but will usually yield higher returns on investment.

Both mutual funds and ETFs are considered low-risk investments compared to cherry-picked stocks and bonds. While investing in general always carries some level of risk, both mutual funds and ETFs carry about the same level.

ETFs are very safe and are an excellent option for long-term investments. According to experts, ETFs are not that volatile and show a slight change in their prices compared to stocks and indices because they are diversified and pooled investments of many investors.

For long-term investing, ETFs are generally considered safer investments because of their broad diversification. Diversification protects your portfolio from any one single downturn in the market since you're money is spread out among these hundreds, or thousands, of stocks.

Best Performing ETFs of Last 10 Years: U. S. Equity

Over the past ten years, the U. S. stock market has been most favorable for large-cap growth investments. The large-cap growth-styled Invesco QQQ Trust ETF (QQQ), with an annualized return of 17.0%, is the best-performing ETF in the U. S. equity category.

Assuming an annual return of 12%, you need to invest around Rs 43,000 every month to create a corpus of Rs 1 crore in 10 years. If you want to make Rs 1 crore in 15 years, you need to invest Rs 19,819 every month. Assuming you have 20 years, you need to invest around Rs 10,000 every month.

Can you get rich investing in ETFs? ›

It's a common belief that investors get rich by picking individual stocks and beating the market. While that can be true, stock picking isn't the only path for investors to build wealth. Funds -- ETFs in particular -- can also make you a millionaire, even though many of them never beat the market.

Nifty BeES' full form is the Nifty Benchmark Exchange Traded Scheme which is the first ever exchange-traded fund (ETF) traded in India which provides returns closely related to the securities on the S&P CNX Nifty Index.

The face value of one unit of Nifty BeES is Rs. 1. Each unit represents approximately 1/100 of the Nifty 50 index and so, by buying just one unit of Nifty BeES, an investor instantly gets the benefit of diversifying across 50 large stocks without any hassle.

Bank BeEs is a collection of the top 10 banks in India. Whereas Nifty BeEs is a collection of 50 biggest stocks in India. Bank BeEs is more compact and sectoral. Whereas Nifty BeEs contains stocks from more than 22 sectors.

Dividend Policy of Nippon India ETF Nifty BeES

The dividend is paid to the unitholder after deducting the applicable taxes at source. The dividend is typically distributed within 30 days from the date of declaration of the dividend.

In order to buy NIFTY BeES , you need to have a demat account where you hold stocks purchased on any stock exchange. The units of NIFTY BeES can be bought at the prevailing market price anytime during the trading hours on the stock exchange.