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BeES
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What are BeES?
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BeES (Benchmark Exchange Traded Scheme) are a family of Exchange Traded Funds (ETFs)
launched by Goldman Sachs Mutual Fund. ETFs are mutual fund schemes, which combine the
best features of open ended and close-ended funds. They are like stocks, listed
on NSE, liquid, tradable throughout the day, priced continually and in demat form.
At the same time, BeES are like index funds. They offer the benefits of diversification,
index tracking and low expenses. BeES represent a unique tool for investing in a
mutual fund at the price and time of your choice.
Following are the ETFs launched by Benchmark:
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Equity ETFs
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GS Nifty BeES - This scheme is based on the popular S&P CNX Nifty Index. The investment objective of Goldman Sachs Nifty Exchange Traded Scheme (GS Nifty BeES) is to provide investment returns that, before expenses, closely correspond to the total returns of the securities as represented by the S&P CNX Nifty Index. However, the performance of scheme may differ from that of the underlying index due to tracking error. There can be no assurance or guarantee that the investment objective of GS Nifty BeES will be achieved.
GS Junior BeES - Based on the CNX Nifty Junior Index, considered as the next rung of liquid securities after the S&P CNX Nifty Index. Invariably, most constituents in this index are midcap companies. The investment objective of GS Junior BeES is to provide returns that, before expenses, closely correspond to the returns of securities as represented by CNX Nifty Junior Index. However, the performance of scheme may differ from that of underlying index due to tracking error. There can be no assurance or guarantee that the investment objective of GS Junior BeES will be achieved.
GS Bank BeES - This scheme is based on the CNX Bank Index, which constitutes 12 key stocks of the Banking sector. The investment objective of GS Bank BeES is to provide returns that, before expenses, closely correspond to the total returns of the securities as represented by the CNX Bank Index. However, the performance of scheme may differ from that of the underlying index due to tracking error. There can be no assurance or guarantee that the investment objective of GS Bank BeES will be achieved.
GS PSU Bank BeES - This scheme is based on the CNX PSU Bank Index, which constitutes 12 Public Sector Banks. The investment objective of Goldman Sachs PSU Bank Exchange Traded Scheme (GS PSU Bank BeES) is to provide returns that, before expenses, closely correspond to the total returns of the securities as represented by the CNX PSU Bank Index. However, the performance of scheme may differ from that of the underlying index due to tracking error. There can be no assurance or guarantee that the investment objective of GS PSU Bank BeES will be achieved.
GS S&P Shariah BeES - This scheme is benchmarked to S&P CNX Nifty Shariah Index. The investment objective of GS S&P Shariah BeES is to provide returns that, before expenses, closely correspond to the total returns of the securities as represented by the S&P CNX Nifty Shariah Index by investing in securities which are constituents of S&P CNX Nifty Shariah Index in the same proportion as in the Index. However, the performance of scheme may differ from that of the Underlying Index due to tracking error. There can be no assurance or guarantee that the investment objective of GS S&P Shariah BeES will be achieved.
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International ETFs
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GS Hang Seng BeES - The investment objective of GS Hang Seng BeES is to provide returns that, before expenses, closely correspond to the total returns of securities as represented by Hang Seng Index of Hang Seng Data Services Limited, by investing in the securities in the same proportion as in the Index. However, the performance of scheme may differ from that of the Underlying Index due to tracking error.
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Non Equity ETFs
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GS Gold BeES - The investment objective of Goldman Sachs Gold Exchange Traded Scheme (GS Gold BeES) is to provide returns that, before expenses, closely correspond to the returns provided by domestic price of gold through physical gold. There can be no assurance or guarantee that the investment objective of GS Gold BeES will be achieved.
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Debt ETFs
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GS Liquid BeES - GS Liquid BeES has a face value of each unit being Rs. 1,000. The returns will accrue to the investors in the form of daily dividend, which is compulsorily reinvested in the scheme. The units arising out of dividend reinvestment will be credited to the investors once every month. The investment objective of the scheme is to enhance returns and minimize price risk by investing in basket of call money, short term government securities and money market instruments of short and medium maturities while maintaining the safety and liquidity. There can be no assurance or guarantee that the investment objective of GS Liquid BeES will be achieved.
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What are the advantages of BeES?
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i. Simple
ii. Economical
iii. Convenient
iv. Liquid
v. Neutral
vi. Transparent
vii. Instant Diversification
viii. Equitable Structure
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How do I buy/sell BeES?
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BeES can be traded on the Capital Market segment of the National Stock Exchange
of India Ltd (NSE). BeES can be purchased and sold during market hours through any
member of NSE. There is no minimum investment, although units are purchased in round
lots of 1.
Following are the NSE symbols for BeES:
GS Nifty BeES NIFTYBEES
GS Junior BeES JUNIORBEES
GS Bank BeES BANKBEES
GS PSU Bank BeES PSUBNKBEES
GS Liquid BeES LIQUIDBEES
GS Gold BeES GOLDBEES
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At what price should I buy or sell BeES?
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The real-time NAV of BeES is available on the website of Goldman Sachs Mutual Fund i.e.
www.gsam.in. Units can be bought or sold at prices close
to this NAV. For Liquid BeES, the Fund endeavors to keep the NAV constant at Rs.
1,000.
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How do I settle BeES?
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As BeES trade just like any other normal listed security on the NSE, settlement
is just like any other stock. In case an investor has purchased BeES from the market,
he has to pay the broker before the pay-in on T+2 and in the case of sale, an investor
has to transfer BeES from his demat account to his brokers account before the settlement
on T+2.
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What happens in case of default on payment or delivery of BeES?
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As clearing and settlement is done through the exchanges, the exchange's clearing
house guarantees all trades. Any shortfall in units will be auctioned by the exchange
and the investor is protected by the exchange mechanism.
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Is there any Entry or Exit Load on BeES?
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There is no entry or exit load on direct subscription and redemption of BeEs in
creation unit size with the Fund.
Also there is no entry or exit load on BeES purchased and sold on NSE. However,
an investor would be paying cost in the form of a bid and ask spread and brokerage
and other charges as may be levied by his broker.
In case, there are no quotes on the NSE for five trading days consecutively, an
investor can redeem units of Nifty BeES, Junior BeES and Bank BeES in less than
creation unit size directly with the Fund with an exit load of upto 5% of NAV.
In case, there are no quotes on the NSE for five trading days consecutively, an
investor can redeem units of PSU Bank BeES in less than creation unit size directly
with the Fund with an exit load of 3% of NAV.
In case, there are no quotes on the NSE for five trading days consecutively, an
investor can redeem the units of Liquid BeES in less than creation unit size directly
with the Fund with an exit load of 2% of NAV.
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Can I buy or sell BeES directly with Benchmark?
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Yes, BeES can be directly purchased and redeemed from Benchmark but only in certain
lot sizes called "Creation unit". Following are the Creation Unit Size for each
Scheme:
GS Nifty BeES - 10,000 units
GS Junior BeES - 16,000 units
GS Bank BeES - 10,000 units
GS PSU Bank BeES - 10,000 units
GS Liquid BeES - 2,500 units
GS Gold BeES - 1,000 units
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What are the basic requirements to invest in BeES?
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The basic requirements are:
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A Share Trading Account
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A Demat Account
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What will happen to dividends?
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GS Nifty BeES
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Dividend
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09-Jul-09
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Rs. 4.5 per Unit
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413.0488
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Dividend
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15-Sep-08
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Rs. 5.00 per Unit
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414.75
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Dividend
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08-Jan-07
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Rs. 8.00 per unit
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402.754
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Dividend
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18-Feb-05
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Rs. 3.50 per unit
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209.3494
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Dividend
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21-Aug-03
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Rs. 3.00 per unit
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133.2838
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Bonus
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21-Feb-03
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1:110 units
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-
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GS Junior BeES
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Dividend
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09-Jul-09
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Rs. 1.25 per Unit
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75.3772
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Dividend
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19-Feb-04
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Rs. 4.00 per Unit
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352.026
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Bonus
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19-Feb-04
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1:4 units
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-
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GS Bank BeES
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Dividend
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09-Jul-09
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Rs. 4.5 per Unit
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413.0488
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Dividend
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15-Sep-08
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Rs. 5.00 per Unit
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414.75
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Dividend
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08-Jan-07
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Rs. 8.00 per unit
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402.754
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Dividend
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18-Feb-05
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Rs. 3.50 per unit
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209.3494
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Dividend
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21-Aug-03
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Rs. 3.00 per unit
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133.2838
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Bonus
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21-Feb-03
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1:110 units
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GS PSU Bank BeES
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Dividend
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10-Nov-09
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Rs. 6.00 per unit
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350.6454
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GS Liquid BeES
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Click here
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What is a Creation Unit?
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Creation Unit is a fixed number of BeES, which is exchanged for a basket of shares
underlying the index called the "Portfolio Deposit" and a "Cash Component".
e.g. To subscribe 10,000 units of Nifty BeES with the Fund, an investor has to deposit
a pre-defined underlying portfolio. In exchange of this portfolio and payment of
a "cash component", the Fund will allot 10,000 units to the investor.
Alternatively, investors can follow the "cash subscription" route in which they
can pay cash directly to the Fund for purchasing the underlying portfolio.
This "in-kind" exchange of underlying portfolio for units is a unique feature of
ETFs.
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How do BeES compare with traditional open-ended index funds?
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Short-term investor:For the short-term investors, costs in BeES will be in the form
of brokerage and bid-offer spread. The biggest advantage of BeES is that short-term
investor can take advantage of intra-day price movements, which is not possible
with traditional open-ended index funds.
Long-term investor:Long-term investors benefit due to the lower overall costs of
BeES as compared to traditional open-ended index funds.
Performance History of BeES (as on 30th May, 2008)
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GS Nifty BeES
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(15.41)%
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13.73%
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34.58%
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39.36%
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28.65%
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GS Junior BeES
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(28.28)%
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2.06%
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23.53%
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38.47%
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40.27%
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GS Bank BeES
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(29.51)%
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5.05%
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25.08%
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28.45%
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GS PSU Bank BeES
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(29.54)%
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-
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-
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(18.84)%
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GS Gold BeES
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13.29%
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23.73%
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17.33%
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GS Liquid BeES *
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7.37%
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6.78%
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6.22%
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5.32%
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* For Lquid BeES returns are based on Gross Dividend P.U.(Inclusive of Distribution
Tax) declared by the Fund till May 30, 2008. Actual dividend in the hands of each
investor will vary based on category and rate of dividend distribution tax applicable
thereon. Returns for all the period are annualized.
Returns for less than one year are absolute and more than one year are compounded
annualized.
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What are the taxation rules that apply to BeES?
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Same rules apply as in the case of buying or selling stocks or mutual fund units.
Kindly refer the respective Offer Document / Key Information Memorandum.
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It is also managing Portfolio Management Schemes based on Quantitative Models.
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