So I have bought a good amount of Reliance ETF liquid bees to park some of my funds. Have been holding them for the past 3 months. The returns I was expecting was in the range of 5% to 5.5% in my hands, but I am getting units in the range of only 3.8%. On their website, they have claimed they have generated simple annualized (not compounded) returns of 5.67% over the last 15 days, whereas I’ve received only 3.8% simple annualized (average units received over 15 days multiplied by 365)
For 551.94 units, I should be receiving .085 units a day, whereas I am receiving. 058
They do have a dividend calculator, and I am getting dividends exactly as per that, but then again, that’s only around 3.8% annualized, what does the 5.6% mean then? They show that 10,000 invested will be around 10560 after a year so there’s no question of tax deducted by them.
This is one issue for which you will never receive a response. I personally am led to believe in such situations that Zerodha could be retaining the dividend for itself, because the dividend comes to its own account and then it distributes it proportionately to clients who have pledged the Liquidbees.
The reason for disparity could be because you might have opted for the dividend option and the returns shown on the website pertain to growth option. In dividend option dividend distribution tax of approximately 29% is deducted by the fund house and consequently what you receive in your hand is much lower. This option is suitable only for those who fall in the 30% tax bracket. for those in 10% or 20% tax bracket its advisable to choose the growth option where you pay short term capital gains tax at marginal rate of tax based on the tax slab you fall in and if you hold for more than 36 months then long term capital gain tax @ 20% with indexation benefits is available.
Reliance AMC has a horrible support when it comes to ETF. Most employees have no idea about liquidbees. They think we are talking about liquid mutual funds. I have found DSP Blackrock to be much better when it comes to responding to my queries regarding their LiquidETF.
When you buy a mutual fund you are asked to choose if you want to opt Direct plan or regular plan (Direct plan helps you save on commission paid to broker/advisor) and also if you want to opt for growth or dividend option.