Does investing in Liquidbees make any sense?

You will only save one extra day. The day you were supposed to buy money market funds from your trading account, place a redemption request. Amount comes to your bank account next day by 9AM. Place order and make payment using coin.
In 2 days it will get reflected in your holdings.
If you go for liquid funds you do save a day. But considering the huge variation in returns, I do not think liquidbees are worth buying.
I personally do this on Thursday. Friday amount comes to my account. Place order on Friday. Comes to my holdings on Tuesday. Pledge on Tuesday. Get margin on Wednesday when usually margin requirement goes up.

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I don’t know if or why traders choose Liquidbees but investors do, as they wait for the prices they want to buy at, or if want to buy something later, so it is better to put the funds in Liquidbees even for a week, which could turn into months too. Get some return even for one week, 2.5% p.a, high liquidity, sell when funds are needed, get 80% of the proceeds immediately.

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I would rather keep funds in my SB account. :rofl::rofl::rofl:

Absolutely no transaction cost.
Can use full 100 percent.

You can be sure they are safer than all banks in country as country never fails to pay taxes i.e pay interest on those gsec bonds& t-bills.

IMO there are crazy investors that buy negative yeilds bonds like japenese treasury bonds to secure their money. They believe negative return is worth their safety

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Man, SBI won’t fail.

Of course.

But some investors wait, and occasionally, as you know, sometimes the market or a stock falls more than one has expected, and even in those times, the window that one could buy will be small, just an example.

It is more like, I don’t expect to get paid for this chunk, but I have an opportunity of a 2.5% return, so I am utilizing it.

So yes, liquid ETFs have a place, not to all, but to some, as with everything else.

Yes. For sure. I know am missing something. Otherwise there wouldn’t be so much liquidity. It’s just that for now I don’t see a good reason. But as I said there has to be something.

You may not have encountered deep value investors, who also have great patience, who wait for the exact moment, and can wait for months if not years, and they are mostly likely to know a lot, they go all in, so they buy. And even ordinary investors with some technical knowledge wait for stocks to correct and reach 200MA, these buy. Even Buffett waits, although staying in T-bills.

I too keep my funds in Liquidbees, enjoy the small return, with the knowledge that there will always be buyers whenever I want to sell :grin:

Such investors don’t want to make things complicated by investing in something else for any period and simply want the funds to be available, at some point of time, which could be tomorrow, or after a couple of months.

2.5% in other words is like icing on the cake, while availability of the funds at the opportune time is the cake :cake:

Yes. This makes sense. Thank you.

When I plan to take a break from trading, I’ll just shift over. I really miss buying MFs from Coin via trading account.

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I have realized one use case for liquid ETF, after I started investing in a momentum based smallcase.
Lot of small cases, especially factor based ones, like momentum, make investors hold their cash component in liquid ETF.

This way whenever they decide to deploy the cash, liquid etf can be sold and stock can be bought on the same day. Making rebalance much easier.
So lot of investors would be holding cash in liquid etf and moving from liquid to stock or stock to liquid, based on triggers. Same might be case for PMS holdings.

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Very much possible. Also earlier I said withdrawing to SB is beneficial. But I now think that’s only for retail investors.
Funds will not have SB account and to keep liquid cash, liquidbees can help.

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Yes this is correct. This is the biggest advantage of ICICILIQ & LIQUIDBEES. You can exit this liquid position and enter a stock or derivative trade on the same day.

Whereas for liquid mutual funds - we will lose a day and the opportunity might be not available.

Also note to do this the liquidbees should be in unpledged status, because if its pledged it may take upto 24hrs to unpledge and then trade

Also consider the stamp duty is applicable and may form a sizeable value if the funds parked are very high.

For multiple switches in and out might prove counter intuitive due to this.

One more reason to have instant unpledge option.
Anyways it’s gonna happens VERY SOON

Thank you @nithin @Bhuvan and team Zerodha for listening, and launching the Zerodha Nifty 1D Rate Liquid ETF :pray:

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The riskometer actually works… :sweat_smile:
(it’s almost always stuck on Very high for most schemes :stuck_out_tongue_winking_eye:)

I do not like to be negative here , but I’d like to repeat this for the fact that we have around 2500 ( is it more now?) or so mutual funds in India.

In software engineering, we used to come across the following:

“Ahh this programming language is very slow, not expressive… so I Will create MY OWN programming Language” .

… and now we got over 20 (so far I remember) such programming languages.

Same is happening with the mutual funds :joy:.

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