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Mutual Fund Scheme Analysis - GS Nifty BeES

HDFC Sec | Published: 10 Oct, 2012  | Source : | Follow Author | Add to my Favourites

Goldman Sachs Nifty Exchange Traded Scheme (GS Nifty BeES) – a review:

Features of GS 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
  • Available across NSE terminals
  • Tracks the S&P CNX Nifty Index
  • Priced at 1/10th of the Nifty Index
  • The maximum total expense ratio is 0.80% per annum
  • Structured as a Mutual Fund under the SEBI 1996 regulations

Advantages of GS Nifty BeES:

  • Simple – Can be bought/ sold on NSE like a share…real-time
  • Economical – No load scheme. Annual expense is 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 on a daily basis

GS Nifty BeES – Scheme Details:

  • NSE Symbol :NiftyBEES
  • BSE Code :590103
  • ISIN :INF732E01011
  • Reuters :NBES.NS
  • Bloomberg :NBEES.IN
  • Closing Price :571.40 (Rs as on Oct 08, 2012)
  • NAV :574.82 (Rs as on Oct 08, 2012)
  • Expense Ratio :0.50% (as on Sep ’12)
  • Tracking Error :0.12%*
  • Issued Cap :1,00,67,476(shares) as on 08-Oct-2012
  • Market Cap :575.85 (Crore) as on 08-Oct-2012
  • 52 week high/low price :585/462.85
  • Impact cost :0.10 (as on Sep ’12)
  • Entry / Exit Load :Nil
  • P/E multiple of Nifty :17.64 (as on 31 Aug 2012)
  • P/B multiple of Nifty :2.87 (as on 31 Aug 2012)
  • Dividend yield of Nifty :1.57% (as on 31 Aug 2012)

•*- Tracking Error is calculated based on daily Rolling Returns for last 12 months (Source: NAVIndia).

Rationale behind investing in an Index:

  • Investing in an index is considered as efficient investment option as the index includes large actively traded stocks from diversified and performing industries
  • Indices are revamped periodically representing the changes in the importance of sectors and growth cycle of stocks. The world changes, so the index should change
  • Investors benefit out of these changes as they need not take a call on entering or exiting a particular sector or stock

Rationale behind investing in GS Nifty BeES

GS Nifty BeES gives a chance to
  • Participate in the most happening large cap stocks that will ride on growth in Indian economy
  • Incur low cost in terms of expenses of scheme (compared to a diversified fund) or lower transaction costs (in the case of direct equity requiring frequent reshuffling)
  • Go in for SIP and take advantage of volatility in the markets to arrive at a lower entry level
  • Avoid possibility of underperforming the benchmark
  • Avoid the need of constantly monitoring and reviewing portfolio


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