Everything about Bank BeES in India


India’s banking sector has seen steady growth in the past five years with the Nifty bank index, the index which tracks major banks in India, growing more than 100% as of November end, 2021. This makes investing in the banking sector a lucrative way to create steady profits.

But with more than a handful of stock market listed banks, picking what stocks to buy and maintaining a portfolio based on their growth could become a bit difficult. However, Bank BeES could make the job easier for you.

What is Bank BeES?

It is an Exchange Traded Fund (ETF) containing stocks of all major banks in India. The majority of money is invested in shares of companies from the Nifty bank index and the rest in treasury bills, government bonds, etc.

Bank BeES works just like a mutual fund. There is a fund manager who pools money from different investors and maintains a portfolio. But since it’s an ETF, units can be traded in the stock market just like shares. Since it can be traded, Bank BeES is more liquid and you can employ several strategies, including options, to get the maximum out of your investment.

Advantages of investing in Bank BeES

What makes Bank BeES a good option is its inclusion of all major bank stocks. Let’s see what else makes it a wise investment option.

  • It is economical

Investing in Bank BeES is a pocket-friendly way to invest in India’s major banks’ stocks which are showing steady growth in the stock market today. Investing in one stock alone of one of these banks would cost you anywhere between Rs. 700 to Rs. 1,500. But the Bank BeES’ Net Asset Value (NAV) is just about Rs. 362. That means that you could get the benefits of investing in all the bank stocks for about a fraction of the price.

  • Low expense ratio

Bank BeES is not actively managed. The fund manager tries to create an exact replica of the Nifty bank index and doesn’t try to outperform the index. Since its management is passive, the cost associated with it is also less. Bank BeES has an expense ratio of a mere 0.18% compared to other banking sector mutual funds, which charge more than 1%, on average. A lower expense ratio means that your profit will be higher as well.

  • No exit loads or lock-in periods

Since Bank BeES is an ETF, its characteristics are similar to those of a stock. It is tradable in the stock market and you can redeem it anytime you want with no exit loads. Hence, it doesn’t have a lock-in period either which makes it very liquid.

  • It facilitates intraday trading

Since there is no lock-in period, you have the liberty to opt for intraday trading as well. Intraday means buying stocks for a short period of time and selling them for a profit. Since bank BeES is an ETF, its unit price fluctuates throughout the day as well, making it ideal for intraday trading.

How to buy Bank BeES?

You can buy units of Bank BeES from most of the trusted brokers. The online process is easy and hassle-free. Bank BeES is considered to be a good basket of all the major banks’ stocks in the stock market today. If you are planning to invest in it, make sure you do your research. You can also consult a financial advisor to figure out your investment goals and risk appetite to make the most out of your investment.