absolutely
Future has a premium. What is nifty etf beta?
It is 1
14906−15175=269 nifty
159.64−162.10=2.46 nifty bees
14906÷159.64=93.37 quantity to gain same points
93.37258…×2.46=229 actual gained nifty bees
But today nifty is up 269
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Go look at niftybees factsheet
Beta is close to 1 but not actually 1 due to tracking error. Your next best bet would be to buy stocks in the proportion of the current weightage.
Exactly, how much quantity should I buy to mimic any idea?
Nifty value / etf value = qty
I was asking about stocks
You can google current index weightage based on that allocate your capital.
On SBI Nifty 50 ETF website (under the Unit Creation tab), they have shared the exact quantity of each Nifty 50 stock required for creating the Creation Unit (which is 50,000 quantity of the ETF) -
SBI - ETF Nifty 50 - Unit Creation For Date 2021-05-21
| SECURITY NAME | QUANTITY | CLOSING PRICE | VALUE |
|---|---|---|---|
| Adani Ports And Special Economic Zone Ltd. | 86 | 769.2 | 66151.2 |
| Asian Paints Ltd. | 53 | 2832.5 | 150122.5 |
| Axis Bank Ltd. | 294 | 730.9 | 214884.6 |
| Bajaj Auto Ltd. | 15 | 4125.55 | 61883.25 |
| Bajaj Finance Ltd. | 31 | 5631.75 | 174584.25 |
| Bajaj Finserv Ltd. | 7 | 11265.15 | 78856.05 |
| Bharat Petroleum Corporation Ltd. | 109 | 461.05 | 50254.45 |
| Bharti Airtel Ltd. | 283 | 530.95 | 150258.85 |
| Britannia Industries Ltd. | 14 | 3435.75 | 48100.5 |
| Cipla Ltd. | 59 | 926.9 | 54687.1 |
| Coal India Ltd. | 245 | 147.2 | 36064 |
| Divi’S Laboratories Ltd. | 15 | 4079.9 | 61198.5 |
| Dr. Reddy’S Laboratories Ltd. | 14 | 5216.45 | 73030.3 |
| Eicher Motors Ltd. | 16 | 2522.3 | 40356.8 |
| Grasim Industries Ltd. | 45 | 1371.85 | 61733.25 |
| Hcl Technologies Ltd. | 127 | 930.65 | 118192.55 |
| Hdfc Bank Ltd. | 509 | 1497.3 | 762125.7 |
| Hdfc Life Insurance Company Ltd. | 97 | 670.7 | 65057.9 |
| Hero Motocorp Ltd. | 15 | 2884.4 | 43266 |
| Hindalco Industries Ltd. | 171 | 389.8 | 66655.8 |
| Hindustan Unilever Ltd. | 104 | 2362.25 | 245674 |
| Housing Development Finance Corporation Ltd. | 211 | 2518.05 | 531308.55 |
| Icici Bank Ltd. | 809 | 642.45 | 519742.05 |
| Indian Oil Corporation Ltd. | 297 | 104.3 | 30977.1 |
| Indusind Bank Ltd. | 66 | 1016 | 67056 |
| Infosys Ltd. | 433 | 1354.5 | 586498.5 |
| Itc Ltd. | 1022 | 209.05 | 213649.1 |
| Jsw Steel Ltd. | 113 | 698.2 | 78896.6 |
| Kotak Mahindra Bank Ltd. | 171 | 1757.65 | 300558.15 |
| Larsen & Toubro Ltd. | 141 | 1418.05 | 199945.05 |
| Mahindra & Mahindra Ltd. | 112 | 818.95 | 91722.4 |
| Maruti Suzuki India Ltd. | 16 | 6814.65 | 109034.4 |
| Nestle India Ltd. | 4 | 17497.1 | 69988.4 |
| Ntpc Ltd. | 556 | 112.85 | 62744.6 |
| Oil & Natural Gas Corporation Ltd. | 427 | 112.75 | 48144.25 |
| Power Grid Corporation Of India Ltd. | 300 | 227.95 | 68385 |
| Reliance Industries Ltd. | 378 | 2002.55 | 756963.9 |
| Sbi Life Insurance Company Ltd. | 46 | 969.25 | 44585.5 |
| Shree Cement Ltd. | 2 | 27622.65 | 55245.3 |
| State Bank Of India | 449 | 401.2 | 180138.8 |
| Sun Pharmaceutical Industries Ltd. | 126 | 690.4 | 86990.4 |
| Tata Consumer Products Ltd. | 70 | 649.7 | 45479 |
| Tata Consultancy Services Ltd. | 121 | 3080.5 | 372740.5 |
| Tata Motors Ltd. | 210 | 313.1 | 65751 |
| Tata Steel Ltd. | 91 | 1113.1 | 101292.1 |
| Tech Mahindra Ltd. | 72 | 980.5 | 70596 |
| Titan Company Ltd. | 49 | 1538.35 | 75379.15 |
| Ultratech Cement Ltd. | 13 | 6637.6 | 86288.8 |
| Upl Ltd. | 64 | 779.85 | 49910.4 |
| Wipro Ltd. | 173 | 512.7 | 88697.1 |
| Total Basket Value | NAV (₹) | NAV Date | Basket Size (Units) | Cash Component Per Basket |
|---|---|---|---|---|
| 7681845.65 | 153.66 | 21-05-2021 | 50000 | 969.35 |
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It’s an ideal senario, but in reality date to expiration and short term demand and supply also affects the price of the future
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Hi @Prayag, the link that you’ve posted above does show the weightage of each stock but this keeps on regularly changing. It obviously is difficult for anyone to keep on tracking the change and accordingly re-manage it in your portfolio. Isn’t it?
I guess nity bees is sufficient if you are looking for longterm .
short term i guess it is impossible to imitate coz even the big fund managers like sbi nifty , kotak nifty , nippon etf there will be a tracking error
I beg to differ. During Many of high volatility days the etf prices do not go parallel to that of index. The classical example was the lower circuit day, when being oblivious to this fact, I bought lots of nifty bees only to find later that the prices of nifty bees was not linear that point in time and my buy prices of etf were corresponding to roughly 1000 points higher nifty.
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When a stock is added/removed from the index (which happens semi-annually) or certain kinds of corporate actions occur (like rights issue, mergers, etc), then rebalancing would be required but otherwise, the index is self-weighting in nature and doesn’t require constant changes. Sharing information I came across in a FAQ about Indices on the NSE website -
You say that buying a NIFTY 50 portfolio yields the same returns as percentage changes on the NIFTY 50 index. But the weights will have to keep on changing from day to day when market caps change?
No. The market-cap weighted index is “self weighting”. I.e. when weights change because prices change, yesterday’s index portfolio continues to be today’s index portfolio. Hence a buy and hold strategy is all that is required to replicate index returns under normal circumstances. Note that someone who buys and holds a NIFTY 50 portfolio earns dividends, this should be compared with the NIFTY 50 TR index and not plain NIFTY 50.
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Upon revisiting the SBI Nifty 50 ETF website (under the Unit Creation tab), I noticed there had been minor changes in the quantities of multiple stocks in the last one month. I believe you are right in saying that it would be extremely difficult for a person to keep track of these changes and rebalance their portfolio on a regular basis. This likely might have happened because multiple Nifty 50 companies had issued dividends which had to be re-invested back as the ETFs follow the Nifty 50 TR index. Hence my previous reply is partly incorrect as in real-world conditions, there would always be some kind of corporate actions occurring in one of the companies which would require adjustments -
SBI - ETF Nifty 50 - Unit Creation For Date 2021-06-25
| SECURITY NAME | QUANTITY | CLOSING PRICE | VALUE |
|---|---|---|---|
| Adani Ports And Special Economic Zone Ltd. | 86 | 712.2 | 61249.2 |
| Asian Paints Ltd. | 53 | 3003.9 | 159206.7 |
| Axis Bank Ltd. | 295 | 761.35 | 224598.25 |
| Bajaj Auto Ltd. | 15 | 4196.15 | 62942.25 |
| Bajaj Finance Ltd. | 31 | 6075.8 | 188349.8 |
| Bajaj Finserv Ltd. | 7 | 12486.6 | 87406.2 |
| Bharat Petroleum Corporation Ltd. | 109 | 470.05 | 51235.45 |
| Bharti Airtel Ltd. | 283 | 535.1 | 151433.3 |
| Britannia Industries Ltd. | 14 | 3670.05 | 51380.7 |
| Cipla Ltd. | 60 | 957.1 | 57426 |
| Coal India Ltd. | 246 | 148.75 | 36592.5 |
| Divi’S Laboratories Ltd. | 15 | 4248.75 | 63731.25 |
| Dr. Reddy’S Laboratories Ltd. | 14 | 5309.3 | 74330.2 |
| Eicher Motors Ltd. | 16 | 2720.8 | 43532.8 |
| Grasim Industries Ltd. | 45 | 1506.85 | 67808.25 |
| Hcl Technologies Ltd. | 127 | 995.65 | 126447.55 |
| Hdfc Bank Ltd. | 511 | 1515.1 | 774216.1 |
| Hdfc Life Insurance Company Ltd. | 97 | 725.95 | 70417.15 |
| Hero Motocorp Ltd. | 15 | 2939.2 | 44088 |
| Hindalco Industries Ltd. | 171 | 375.9 | 64278.9 |
| Hindustan Unilever Ltd. | 105 | 2448.65 | 257108.25 |
| Housing Development Finance Corporation Ltd. | 211 | 2509.2 | 529441.2 |
| Icici Bank Ltd. | 811 | 649 | 526339 |
| Indian Oil Corporation Ltd. | 298 | 111.4 | 33197.2 |
| Indusind Bank Ltd. | 66 | 1012.9 | 66851.4 |
| Infosys Ltd. | 435 | 1574.2 | 684777 |
| Itc Ltd. | 1025 | 205.05 | 210176.25 |
| Jsw Steel Ltd. | 113 | 689.5 | 77913.5 |
| Kotak Mahindra Bank Ltd. | 172 | 1735 | 298420 |
| Larsen & Toubro Ltd. | 142 | 1523.85 | 216386.7 |
| Mahindra & Mahindra Ltd. | 112 | 794.25 | 88956 |
| Maruti Suzuki India Ltd. | 16 | 7649 | 122384 |
| Nestle India Ltd. | 4 | 17506.7 | 70026.8 |
| Ntpc Ltd. | 557 | 116.05 | 64639.85 |
| Oil & Natural Gas Corporation Ltd. | 428 | 120.9 | 51745.2 |
| Power Grid Corporation Of India Ltd. | 301 | 230.85 | 69485.85 |
| Reliance Industries Ltd. | 379 | 2104.45 | 797586.55 |
| Sbi Life Insurance Company Ltd. | 46 | 1007.15 | 46328.9 |
| Shree Cement Ltd. | 2 | 28729.1 | 57458.2 |
| State Bank Of India | 450 | 428.8 | 192960 |
| Sun Pharmaceutical Industries Ltd. | 127 | 672.25 | 85375.75 |
| Tata Consumer Products Ltd. | 70 | 757.6 | 53032 |
| Tata Consultancy Services Ltd. | 121 | 3380.8 | 409076.8 |
| Tata Motors Ltd. | 210 | 339.65 | 71326.5 |
| Tata Steel Ltd. | 91 | 1165.25 | 106037.75 |
| Tech Mahindra Ltd. | 73 | 1089.5 | 79533.5 |
| Titan Company Ltd. | 49 | 1753.85 | 85938.65 |
| Ultratech Cement Ltd. | 14 | 6923 | 96922 |
| Upl Ltd. | 65 | 805.15 | 52334.75 |
| Wipro Ltd. | 174 | 547.5 | 95265 |
| Total Basket Value | NAV (₹) | NAV Date | Basket Size (Units) | Cash Component Per Basket |
|---|---|---|---|---|
| 8057695.10 | 161.18 | 25-06-2021 | 50000 | 1069.90 |
My suggestion here would be to go for Nifty Exchange Traded Funds or Futures.
| Symbol | Open | High | Low | Last Traded Price | Change | %Change | Traded Volume(lacs) | Traded Value(crs) | 52 Week High | 52 Week Low | 365 Days % Change | 30 Days % Change |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| NIFTY 50 | 16,382.50 | 16,509.55 | 16,376.05 | 16,450.50 | -118.35 | -0.71 | 3,508.17 | 30,118.02 | 24,479.40 | 4,632.70 | 44.49 | 4.43 |
how is 365 Days % Change|30 Days % Change is calculated? @Prayag