Hey, thanks for your query. As mentioned by many of the others in the forum, LIQUIDCASE is a good cash management tool for investors which you could use for transitioning between Equity & Cash and vice versa. It can be used as collateral for margin placement. Its important to note that the underlying investments of LIQUIDCASE go into TREPS which is a 1 Day repo and therefore short-term and low-risk in nature. If you have a longer horizon for your cash portion, would be good to evaluate other debt options which give exposure to the desired time horizon. Hope this helps!
Hi, There is no fund that invests in gilt with short term duration - something like 1y/2y. Nearest product seems to be index gilt funds, but they hold for longer + there is forced booking of CG.
Would be nice to have for pledging as yield should be higher generally vs liquidcase and duration risk wont be too much + no credit risk.
Thanks for the feedback. This is a good idea and we are considering this but cannot commit on an exact timeline as of now.
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Does Liquidcase still requires unpledging before selling (next day?) or is it’s functionality now similar to other stocks/etfs with same day/instant selling possible?
Going to park some funds in it for the first time now so want to be sure about this important feature…
Hi @smakkar , LIQUIDCASE and similar tradeable cash-equivalent scrips no longer require unpledging before selling, they can be sold instantly.
We’ve rolled out instant unpledging for tradeable cash-equivalent scrips (excluding mutual funds).
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Thanks for the confirmation on Liquidcase!!
Does this also apply to GOI long term Securities also E.g. 73GS2053-GS etc?
Yes, this applies to all tradeable pledged cash equivalent securities (including ETFs, SGBs, G-Secs and T-Bills)
Hi @VishalJain , As per the new zerodha rule , we will get the fund immediately after selling liquidcase but today I have not received the same after selling 1000 quantity
Liquidcase or bankFD …?
BankFD compounds every year, Does liquidcase also compounds…
Suppose
I invested 100rs in bankFd, got 6 rs as interest, now from next year i’ll get interest on 106 rs… i wanted to know about liquidcase, does compounding happen in liquidcase or not…
Yes. That’s the difference between liquid case and other liquid ETFs. You don’t get dividends. NAV keeps growing
Loan Against pledged Liquidcase. Can this be an another instrument for regular trader?. Just a thought!!
@Prayag @nithin_kumrr @VishalJain
- Do I get returns in Liquidcase on weekends? Since this fund invests in 1D funds, during weekends, is money invested in any assets or kept as cash over the weekend?
- Is there is any risk over the supply of these debt instruments on which liquidcase invests? Say you have 100 cr AUM, but on some days there are less supply of debt where you are able to deploy only 80 crores and keep 20 crores as cash for that day
Hey Sidharth,
- Yes, an investor gets returns on weekends as well. In Liquidcase, the funds are invested till the immediate next working days; hence, there is no idle cash with the funds apart from the required purposes.
- Liquidcase invests in TREPS market, which is an overnight lending arrangement primarily drawing its demand-supply from the Indian banking system which impacts the overnight rates. Therefore of any day, more lenders than buyers may result in rates cooling off and vice versa. Chance of cash remaining idle is negligible.
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Can you explain who is actually borrowing this much money for 1 day and paying 6-7% p.a? My mind is not able to understand how lakhs of crores in AUM is being given in “TREPS” if it is returned the very next day.
This is a factor of any market which is dependent on demand and supply. In India, at present the yield curve is fairly flat and so short-term rates seem high. This may change in the future. Hope this helps!
May also be good to read-up on the overnight markets in India and abroad to understand more as they are fairly established and liquid.
If early pay in is done or block mechanism is used. Then is it 100% when I sell a securities and use amount to buy another stock or etf.
@TheGouda (only remember you tag)
I have some pledged and unpledged liquidcase units, when I sell few units, it deducted from pledged and the fund not credited the same day ? ((80%). I needed to add cash to avoid negative balance . @VishalJain any replies ? @Prayag
hi @VishalJain @Jason_Castelino @tallerballer
I am just curious, I can see zerodha claiming LIQUIDCASE to be India’s first growth NAV liquid ETF. But I find that Kotak LIQUID1 which was launched on Jan of 2023 is a growth NAV one as well. Am I missing something, or is there a catch? Kindly clarify.