Nippon India ETF Gold BeES – Features, NAV and performance – Should you invest?

Gold BeES Price: One can buy or sell units of Gold ETFs all through the trading hours similar to equity shares.

Even while the equity market had crashed big-time in March 2020, the portfolio of many investors is in the green because of the yellow metal. Thanks to the increase in the price of gold which has worked to the advantage of many investors with exposure to gold. The gold price per 10 gram has moved by about 40 over the last one year and 15 per cent since January 1, 2020. If you are considering to ride on the bandwagon, Gold Exchange Traded Fund (ETF) can be a suitable instrument to invest in. Among the several Gold ETFs, Nippon India ETF Gold BeES is one such Gold ETF that we are considering now.

Volume of trading

Buying and selling Gold ETF is better if the trading volume on the stock exchange is high. This will ensure liquidity is maintained and you can buy and sell units at any time and any volume. The Nippon India ETF Gold BeES has an average monthly trading volume of Rs 3,845.26 Cr. and is the highest among all listed gold ETFs.

Source: NSE website (As on July 9)

Type of Scheme

Like any other gold ETF, Nippon India ETF Gold BeES is listed on the stock exchanges and one can buy or sell units all through the trading hours similar to equity shares. And, it tracks the domestic gold prices. Nippon India ETF Gold BeES is an open-ended scheme, listed on the stock exchange such as NSE, BSE in the form of an Exchange Traded Fund (ETF) investing in physical gold.

Source: NSE website (As on July 9)

Scheme Objective

The Scheme employs an investment approach designed to track the performance of physical gold. The investment objective of Nippon India ETF Gold BeES is to provide returns that, before expenses, closely correspond to the returns provided by Domestic price of Gold through physical gold. The Scheme seeks to achieve this goal by investing in physical gold and gold-related securities. However, similar to mutual funds, there can be no assurance or guarantee that the investment objective of the Scheme will be achieved.

Performance

Source: Company website (As on May 31)

Features

NAV: Rs 42.8760 ( As on July 8)
Benchmark – Domestic gold prices
Portfolio Turnover (Times)- 0.15
Tracking Error – 0.08%
Total Expense Ratio- 0.79
Load structure
Entry Load: Nil
Exit Load: Nil

Holdings

As on 30 June, Nippon India ETF Gold BeES had 99.49 per cent exposure in gold holding Gold 995 1 KG bar.

What to do

Almost all financial planners suggest keeping gold in one’s portfolio. Depending on your risk profile it can be anywhere between 15 to 20 per cent. While comparing different gold ETFs, keep an eye on the expense ratio, the lower the expense ratio, the better and also on the tracking error, which should be as low as possible.

Gold ETFs are better suited for liquidity, however as an alternative one may consider sovereign gold bonds too. And, if you are wondering about the current gold price, remember, investing in gold should be your long term decision and not based on short term performance of gold price. Nippon India ETF Gold BeES can be a good start to invest in paper-gold.