scorecardresearchThis 21-year-old ETF garners ₹10,000 crore in AUM. Should you invest?

This 21-year-old ETF garners 10,000 crore in AUM. Should you invest?

Updated: 21 Oct 2022, 08:12 AM IST

Nippon India ETF Nifty 50 BeES is the first exchange traded fund of India. Having surpassed an AUM of 10,000 crore recently, it has delivered 15.68 percent CAGR since its launch in December 2001.

This exchange traded fund (ETF) was launched on December 28, 2001 

This exchange traded fund (ETF) was launched on December 28, 2001 

Nippon India’s ETF Nifty 50 BeEs recently crossed 10,000 crore of assets under management (AUM). This exchange traded fund was the first scheme in its category in India and was launched on December 28, 2001. The scheme’s fund manager since September 2021 is Mehul Dama.

The success in terms of longevity and accumulation of funds is seen as another reaffirmation of passive investing for investors.

There are a total of 141 exchange traded funds and 105 index funds in India, according to the latest data shared by the Association of Mutual Funds in India (AMFI).

The scheme employs a passive investment approach designed to track the performance of Nifty 50 TRI by investing in stocks that comprise Nifty 50 index in the same proportion as in the index.

As per the risk-o-meter, the fund scheme has a ‘very high’ risk.

Returns offered

This scheme accrued a return of 13.09 percent per annum in the past five years, and 15.41 percent in the past three years.

Since inception, however, the return delivered by the fund scheme was 15.68 percent. This means if someone had invested 10,000 in this scheme, it would have now swelled to 2,06,173.

It is significant to note that the return of benchmark index — Nifty 50 TRI — during this period was a tad higher at 16.07 percent.

Duration                                                 Return (%) Benchmark return (%)
3 years CAGR                                        15.4115.57
5 years CAGR                                     13.0913.19
CAGR since inception                       15.6816.07

(Benchmark index is Nifty 50 TRI)

Portfolio constituents: The major constituents of this fund scheme are Reliance Industries (10%), HDFC Bank (8.26%), ICICI Bank (7.93%), Infosys (6.83%), HDFC (5.48%), TCS (4.07%) and ITC (3.86%).

The top four sectors in which the fund scheme has invested are financial services (36.79%), Information technology (13.81%), oil, gas and consumable fuels (12.46%) and FMCG (9.18%).

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First Published: 21 Oct 2022, 08:12 AM IST