Key Factors Influencing the Performance of ITBEES

Published on: Wed Mar 01 2023

Key Factors Influencing the Performance of ITBEES

Introduction:

The Nippon India ETF Nifty IT, also known as ITBEES, tracks the performance of the Nifty IT Index and provides investors with a cost-effective way to gain exposure to the Indian IT sector. The ETF's performance is dependent on several factors/variables that can influence its returns, including the performance of the IT sector, interest rates, and global economic conditions. In this blog post, we will take a detailed look at the key factors that influence the performance of ITBEES.

Performance of the IT sector:

The performance of the IT sector is the most significant/important factor that influences the performance of ITBEES. The Nifty IT Index includes the top 10 IT companies listed on the National Stock Exchange of India (NSE), such as Infosys, TCS, Wipro, HCL Technologies, and Tech Mahindra, among others. Any positive or negative developments in the IT sector can impact the ETF's performance. For instance, if the IT sector is performing well, the ETF's performance is likely to be positive, and if the sector is underperforming, the ETF's returns could be negative. It is important to note that the IT sector is highly competitive and is susceptible to technological changes, which can impact individual companies' performance within the index.

Interest rates:

Interest rates can also have a significant/important impact on ITBEES's performance. Higher interest rates can make borrowing more expensive, which can negatively impact companies' profitability and earnings growth. This, in turn, can impact the ETF's performance, as the companies within the Nifty IT Index may experience a decline in their share prices. On the other hand, lower interest rates can stimulate economic growth, which can positively impact the IT sector's performance and the ETF's returns.

Global economic conditions:

The IT sector is highly dependent on global economic conditions, and any developments in the global economy can impact/affect ITBEES's performance. For instance, if there is a global recession or economic slowdown, companies within the Nifty IT Index may experience a decline in demand for their products and services, which can negatively impact their earnings growth and, consequently, the ETF's performance. Conversely, if there is a global economic expansion, the IT sector's performance may be positive, which can boost the ETF's returns.

Currency risk:

ITBEES's performance is also vulnerable to currency risk, as the ETF invests in Indian IT companies that earn revenue in foreign currencies. Changes in exchange rates can impact/affect the companies' profitability and earnings growth, which can, in turn, impact the ETF's returns. For instance, if the Indian rupee strengthens against foreign currencies, the earnings of Indian IT companies may decline, which can negatively impact the ETF's performance. On the other hand, if the rupee weakens, the earnings of Indian IT companies may increase, which can positively impact the ETF's returns.

Valuation levels:

Valuation levels of the companies within the Nifty IT Index can also impact/affect ITBEES's performance. If the companies are trading at high valuations, there is a risk that their share prices may decline if there is a negative development in the IT sector or the economy. On the other hand, if the companies are trading at attractive valuations, there may be room for their share prices to increase, which can positively impact the ETF's returns.

Conclusion:

The Nippon India ETF Nifty IT (ITBEES) is an ETF that seeks to provide investors/shareholders with exposure to the Indian IT sector's performance. The ETF's performance is dependent on several factors, including the performance of the IT sector, interest rates, global economic conditions, currency risk, and valuation levels of the companies within the Nifty IT Index. It is essential/important for investors to consider these factors before investing in ITBEES and to ensure that the ETF aligns with their investment objectives and risk tolerance. It is also important to note that while the IT sector can be highly lucrative, it can also be volatile, and investors should be prepared for fluctuations in the ETF's returns.

Returns are subject to market risk.

Past performance do not assure future returns.

Name: Algonauts Advisory Services Private Limited

Registration Number: INA000017277

Type: Non-Individual

Validity: Oct 28, 2022 - Perpetual

Contact Details (Principal Officer):

Mr.Sharad Sankaran:
(Principal Officer)
Algonauts Advisory Service Private Limited:
Email: principal.officer@algonauts.in
Contact Number: +91 8108832455
Address: 1, Dora Rose, I C Colony, Borivali West, Maharashtra, Mumbai 400103.

Contact details of SEBI office:

Office of Investor Assistance and Education, Securities and Exchange Board of India, SEBI Bhavan, Plot No. C4-A, 'G' Block, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051.

Disclaimer:

Algonauts Advisory Private Limited (Algonauts Advisory Private Limited) is an investment advisor engaged in the equity advisory business. Algonauts Advisory Private Limited is Sebi registered investment adviser. Algonauts Advisory Private Limited Research Analyst SEBI Registration Number - INA000017277. Algonauts Advisory Private Limited SEBI Registration INA000017277.
Recommendation in reports based on technical and derivative analysis centre on studying charts of a stock's price movement, outstanding positions, trading volume etc as opposed to focusing on a company's fundamentals and, as such, may not match with the recommendation in fundamental reports. Investors may visit www.algonautsadvisory.in to view Technical Research Reports.
The information and opinions in this report have been prepared by Algonauts Advisory Private Limited and are subject to change without any notice. The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of Algonauts Advisory Private Limited. While we would endeavour to update the information herein on a reasonable basis, Algonauts Advisory Private Limited is under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent Algonauts Advisory Private Limited from doing so.
This report is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. This report and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. Algonauts Advisory Private Limited will not treat recipients as customers by virtue of their receiving this report. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluate the investment risks. The value and return on investment may vary because of changes in interest rates, foreign exchange rates or any other reason. Algonauts Advisory Private Limited accepts no liabilities whatsoever for any loss or damage of any kind arising out of the use of this report. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to change without notice.
Algonauts Advisory Private Limited or its associates might have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the companies mentioned in the report in the past twelve months.
Algonauts Advisory Private Limited encourages independence in research report preparation and strives to minimize conflict in preparation of research report. Algonauts Advisory Private Limited or its associates or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report.
Accordingly, neither Algonauts Advisory Private Limited nor Research Analysts and their relatives have any material conflict of interest at the time of publication of this report.
Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. Algonauts Advisory Private Limited or its subsidiaries collectively or Research Analysts or their relatives do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of the research report.
Since associates of Algonauts Advisory Private Limited and Algonauts Advisory Private Limited as a entity are engaged in various financial service businesses, they might have financial interests or actual/ beneficial ownership of one percent or more or other material conflict of interest various companies including the subject company/companies mentioned in this report.
Algonauts Advisory Private Limited may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. Neither the Research Analysts nor Algonauts Advisory Private Limited have been engaged in market making activity for the companies mentioned in the report.
We submit that no material disciplinary action has been taken on Algonauts Advisory Private Limited by any Regulatory Authority impacting Equity Research Analysis activities.
This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject Algonauts Advisory Private Limited and affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.