Nippon India Nifty BeES ETF volume hits 20-yr high

Suresh P. Iyengar | | Updated on: Dec 22, 2021

Market crash attracts investors to index ETFs

The recent sharp fall in equity market seems to be shifting investors interest towards the index-based ETFs. Nippon India Nifty BeES, one of the oldest exchange traded funds, registered the highest volume of ₹205 crore in last 20-year amid the massive market crash on Monday. The benchmark Sensex crashed 1,190 points on Monday and recovered some lost ground since then.

Nippon India ETF has been adding 4-5 lakh investors a month almost in line with the rapid rise in new demat accounts being opened. Nifty BeES trading volume was 74 per cent of the aggregate trading volumes of ₹281 crore on the NSE. SBI Nifty 50 and ICICI Pru Nifty50 ETFs occupied the second and third position accounting for 14 per cent and 12 per cent.

Hemen Bhatia, Deputy Head (ETF), Nippon India Life AMC, said during a massive fall in indices, investors are comfortable buying a basket of stocks through a broad index ETF like the Nifty rather than an individual stock as they do not know which stock will bounce back.

The arbitrage opportunity between the ETF price on stock exchange and real-time NAV published by the mutal funds has created more liquidity with jobbers leading the front with active support of algo-traders, according to sources.

Liquidity factor

One of the most important criteria for ETF selection has been the daily average trading volume and not necessarily the size of asset under management. The ATV decides the impact cost for an investor.

Published on December 22, 2021
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