Everything you need to know about Liquid Exchange Traded Funds (ETFs)

[Nishantr]

@Nakul_Rathi

ICICILQ - this has show better returns over the last year compared to Liquid BeES and DSP Liquid EFT

@Nakul_Rathi , could you let me know the portal where you could compare the ICICLQ returns with other two?

[Nakul_Rathi]

It was on moneycontrol

[sudhakar_shetty]

I would like to know how much haircut does zerodha calculate while using liquidbees as collateral for options trading.

[ShubhS9]

Haircut on Liquidbees is 10%.

[Shakun_Kothari]

If we have to choose between Liquid Bees And HDFC Liquid Fund
Then which will be better, please suggest which is very low risk…

[ShubhS9]

Liquid Bees is slightly less riskier compared to a Liquid Fund as Liquid Bees invests in securities maturing in period of one day, you can count Liquid Bees and other Liquid ETF’s in Overnight Funds category. Liquid Fund’s on the other hand invests in securities maturing over period of 90 days which makes them slightly more riskier compared to Liquid ETF’S/Overnight Funds but returns are also a bit better.

You can read this post for more info Liquid funds vs. Liquid ETF/Overnight Funds

[Shakun_Kothari]

Ok Thanks
Then how about Bharat Bond the info is that They also invest in AAA & Government bonds, So as return in Liquid Bees is less can I go with the Bharat Bond…!

[ShubhS9]

Personally I would diversify across all three categories, You can learn more about Bharat Bond ETF here. Everything you need to know about the Bharat Bond ETF (Edelweiss PSU Debt ETF)

[Shubhanshu_Sharma]

Below snapshots are from the haircut document of Zerodha

1. Both of them mention different haircuts for LIQUIDBEES and ICICILIQ, which one is correct (8% or 10%)?
2. Which one is considered as the haircut for cash equivalent margin - 8% or 10% during option writing ?
3. Where is the LIQUIDETF by DSP , it is not there in any of the list, can that not be used for pledging ?
   @siva @Bhuvan @nithin

[ShubhS9]

@Shubhanshu_Sharma

Both of them mention different haircuts for LIQUIDBEES and ICICILIQ, which one is correct (8% or 10%)?

Haircut for pledging Liquid Bees and ICICILQ is 10%.

@Shubhanshu_Sharma

Which one is considered as the haircut for cash equivalent margin - 8% or 10% during option writing ?

Haircut value is already deducted when you pledge the stock, you don’t have to pay any haircut again.

@Shubhanshu_Sharma

Where is the LIQUIDETF by DSP , it is not there in any of the list, can that not be used for pledging ?

We will allow pledging of DSP Liquid ETF soon.

[Shubhanshu_Sharma]

What is the 8% haircut mentioned in the snapshot ? Can you please explain ? @ShubhS9 @siva

[hyperxpro]

Updated Link to Liquid Bees Buyback PDF: https://investeasy.nipponindiamf.com/rmfGsamnew/documents/FacilityforbuyingbackfractionalUnitsofLiquidBeES_new.pdf

@Bhuvan Please update the same in post.

[ShubhS9]

Thank you for pointing out, updated the link

[bbk_rmd]

Extremely useful. Thanks for the detailed explanation. I have a question, not related to this. Can NRI open 2 Demat accounts?

[Mr_M]

When u buy liquid bees, the gain comes in forms of dividend and number of unit increases.
Example
Buy 100 qty price 1000 cost 1 lakh
After some time /1month time u will see qty raised to 100.05

[Pk308]

Is this true for ICICILIQ also?

[ShubhS9]

@Pk308

Is this true for ICICILIQ also?

Yes, the ICICILQ is the same as LiquidBees and Liquid ETF.

[profit]

Under the New Margin rules can i buy stocks from the proceeds of selling Liquidbees on that day (T+0) itself?
I think previously it is possible…

[ShubhS9]

@profit

Under the New Margin rules can i buy stocks from the proceeds of selling Liquidbees on that day (T+0) itself?
I think previously it is possible

This is possible now as well.

[Parth_Maheshwari]

If I buy DSP liquid ETF, will I have to pledge it every time I want to trade, and pay charges for it? or is it one time pledge and then forget about it till the time you sell ETFs?