Nifty BeES! Isn't it an interesting name? Let's explore what it means!

The details of what it means, how it functions, and its advantages are provided here.

In India, there are thousands of publicly listed companies. Every stock must be tracked separately, which is impossible for any investor to do. This situation brings the significance of ‘index’ into focus.  

An index in finance is a statistical measure of changes in the economy or a security market generally or in specific areas, such as the combined value of 30 blue-chip stocks listed on the Bombay Stock Exchange is known as the Sensex (Sensitive Index). Investors can better understand overall market sentiments by tracking the Sensex's upward or downward movement.  

‘Index funds’ track benchmark index and when you invest money in an index fund, that money is then used to acquire shares of all the companies that comprise that index, giving you a portfolio that is more diverse than the one you would have had, if you had purchased individual stocks.  

An exchange-traded fund (ETF) is simply a collection of securities that may be traded on stock exchanges. An ETF and an index fund differ primarily in that, an ETF can be traded throughout the day whereas index funds can only be transacted at a predetermined price point at the close of trading.  

The 'Nifty BeES', which tracks the Nifty 50 index, was the first ETF launched in India in 2001. BeES stands for ‘benchmark exchange traded scheme’ and each unit is equal to 1/100 of the Nifty 50 index. Investors can benefit from its diversification, liquidity and transparency. It is listed on the BSE and NSE and for a brokerage fee, it may be bought and sold through a trading and demat account just like a stock.