Is the Nifty 50 Exchange Traded Fund (ETF) like NiftyBeES best and safest in the share market as market is falling and you are tempted to invest in the stocks which you always wanted to buy?
Because as soon as you get into the stock, the share price of that particular stock starts falling, left you in frustration. This is the normal story of most of the investors. So, what is the solution, how to skip this up and down cycle and almost be sure not to lose your hard-earned money?
In nifty on NSE, there are 50 stocks any time which gets changed based on the market value of stocks time to time. Likewise there are 30 companies in the Sensex on BSE, which gets updated time to time.
There was a time when many PSUs and bluechip companies like BHEL, GAIL, Hindalco, Reliance communication, MTNL etc. were the part of Nifty or Sensex in the past, but now they are not. So, likewise out of 50 stocks today, many stocks won’t be in the future.
So, If I invest seeing nifty stocks today for long-term, then may be that stock would not be the part of Nifty after 2 / 3 / 5 years. But, Nifty or Sensex may zoom ahead as always these will include best 50 and best 30 stocks respectively based on their trading pattern, volume and value.
So, one solution comes to mind that why not follow Nifty stocks, why not buy all the 50 stocks of Nifty? But, It is very hard to execute this, as this plan requires much higher amount and a complex calculation to buy the 50 stocks in the same ratio as the weightage of stocks are different. And again, time to time maintaining the inclusion and exclusion of stocks in Nifty index is an uphill task.
ETF, Exchange Traded Fund – what is ETF?:
So, to overcome all these above problems, Exchange Traded Fund like niftybees, ICICINIFTY, SETFNIF50 etc. seems the panacea, solution of all problems. ETF is a ‘group of stocks’ following the underlying index. ETF is traded like equity share. ETFs are of many types: Index ETF like Nifty 50 ETF, Sensex ETF, Nifty Next 50 ETF, Sector themed ETF like Bank ETF, IT ETF, Auto ETF, Gold ETF, PSUs ETF etc.
Many Mutual fund houses and others like Government launch these ETFs and list on the exchanges like NSE and BSE. A manger manages all the fund activities and acts according to the theme of ETF. Cost is also very less in comparison to the normal mutual fund as manager has to replicate only here without any brainstorming.
Like on 14th Jan 2020, Nifty 50 index was 12,362 and Niftybees share price was 131 but on 26th May 2020, Nifty 50 index was on 9,029 and Niftybees share price was 96. So, it is still 36 % left to touch the same position. And for our country like India, there are still miles to go as we are still developing and towards the developed.
So, if you want to avoid all the uncertainties of stock, Mutual fund, Fixed deposit in banks etc, just follow Nifty ETF. Only caution here is that, the returns in good days may seem less in it, but almost certain.
Nifty 50 ETFs (Exchange Traded Fund) listed on NSE:
Today’s equity ETF like Niftybees share price can be checked by clicking on underlined NSE symbol like NIFTYBEES in the below table.
|S.N.||Nifty ETF Listed on NSE||Type||NSE Symbol||Daily Volume||% of All|
|1||NIPPON INDIA ETF NIFTY BEES||Equity||NIFTYBEES||2194346||87.779|
|2||ICICI Prudential Nifty ETF||Equity||ICICINIFTY||131478||5.259|
|3||SBI-ETF Nifty 50||Equity||SETFNIF50||117826||4.713|
|4||Kotak Nifty ETF||Equity||KOTAKNIFTY||39015||1.561|
|6||LIC MF ETF||Equity||LICNETFN50||2782||0.111|
|7||Motilal Oswal MOSt Shares M50 ETF||Equity||M50||2698||0.108|
|8||HDFC Nifty ETF||Equity||HDFCNIFETF||1754||0.070|
|9||Tata Nifty ETF||Equity||NETF||1736||0.069|
|10||Aditya Birla Sun Life Nifty ETF||Equity||BSLNIFTY||218||0.009|
|11||Indiabulls Nifty50 ETF||Equity||IBMFNIFTY||98||0.004|
|12||IDFC Nifty ETF||Equity||IDFNIFTYET||93||0.004|
|13||AXIS NIFTY ETF||Equity||AXISNIFTY||41||0.002|
|14||Invesco India Nifty ETF||Equity||IVZINNIFTY||6||0.000|
|15||Quantum Nifty ETF||Equity||QNIFTY||4||0.000|
|16||Edelweiss ETF – Nifty 50||Equity||NIFTYEES||0||0.000|
Trading volumes of all Nifty ETFs on NSE in Pie-Chart:
So, which Nifty 50 ETF is best? we can take help from volume of traded shares of all listed NIfty 50 ETF, and then take a call.
In the above table and pie-chart of all the listed Nifty ETFs, Exchange Traded Fund, the most traded volume-wise ETFs (dated 26.05.2020) are NIPPON INDIA ETF NIFTY BEES, ICICI Prudential Nifty ETF and SBI – ETF Nifty 50, which contributes more than 95% of total traded ETF.
It is clear from the graph that Nifty ETF, Exchange Traded Fund follows the Nifty 50 index very closely and looks like its mirror-image. Here, Niftybees share price is similarly following the Nifty 50 index.
So, irrespective of any duration or period, finally it can be said that stocks will continue to come and go, but the index Nifty 50 on NSE will go on as ever and it may touch even 15000, 20000, 25000 etc. So, investing in Nifty 50 ETF on NSE might be the best investment idea in the stock market.
But, we must invest in Nifty 50 ETF, Exchange Traded Fund like niftybees, ICICINIFTY, SETFNIF50 etc. in staggered way or in steps to take the advantage of falling market.
So, best of luck. Happy Nifty 50 ETF investing.
Disclaimer: As this article is a guidance only, so kindly consult your financial advisor before investment