ETFs are exchange traded funds . They are similar to shares in the sense that they can be bought and sold like shares on an exchange platform. The various types of ETFS are:

• Gold Bees
• Liquid Bees
• NIFTY Bees

• A trading account with a broker
• A Demat Account ( since Gold BeES can be settled only in Demat form)

The Fund declares daily dividend. If you have units in your Demat account, you become entitled to this dividend. The dividend declared is reinvested in the form of units of Liquid BeES after deducting Dividend Distribution Tax; hence the returns in your hands are absolutely TAX FREE.

Nifty BeES, the first ETF in India, was introduced on January 8, 2002.

• Nifty BeES is Simple: Nifty BeES can be bought / sold like a share through any NSE terminal at prices available on the screen. The underlying portfolio of Nifty BeES very closely replicates that of the S&P CNX Nifty. Hence, Nifty BeES tracks the movement of S&P CNX Nifty.

• Nifty BeES is Economical: Nifty BeES is a no load scheme. The annual expense ratio including management fees is a maximum of 0.80% of the Daily Average Net Assets, which is one of the lowest for any mutual fund scheme in India. The costs reduce further to 0.65%, for assets over 500/- crore.

• Nifty BeES is Convenient: As it is listed and traded on the NSE, Nifty BeES can be bought / sold throughout the trading day just by a call to your broker. This gives you the power to react swiftly to changes in the market. You can even place limit orders. Nifty BeES can be held in your DP account with other portfolio holdings.

• Nifty BeES is Liquid: The structure of Nifty BeES attracts liquidity from various sources such as buying / selling by investors, arbitrage with index futures, arbitrage by authorized participants with the underlying shares.

• Nifty BeES is Neutral: The performance of Nifty BeES is simply the result of performance of shares in the S&P CNX Nifty Index and demand & supply in the market. There is no Fund manager bias.

• Nifty BeES is Transparent: As Nifty BeES replicates the S&P CNX Nifty, investors can know at any given point of time where and how much is invested in each stock.

• Nifty BeES gives Instant Diversification: Investing in just one unit gives exposure to fifty shares of the S&P CNX Nifty. This allows investors to spread risk with one single decision.

• Nifty BeES is an Equitable Structure: The unique ?in-kind? mechanism of creating / redeeming Nifty BeES by exchanging a pre-defined portfolio ensures that long-term investors do not bear the cost of short term trading as observed in traditional Open-ended structure. This insulates long-term investors from short-term trading activity.