LIQUIDCASE vs LIQUIDBEES

Zerodha
1

  1. Liquidcase’s NAV is similar to a growth mutual fund, will there be any period where the NAV can go below the current NAV?

  2. Return-wise, will it fare better than Liquidbees as it’s tax-efficient?

@nithin

2

curious to know about #1 as well.

as for #2, it does seem it is more tax efficient, since you attract tax only if and when you realize returns - in case of LIQUIDBEES, returns are automatically realized. i.e., you don’t get the option to choose when and whether you want to realize returns.

1 Like
3

Any update on this query. I am also having same question.

4

I’m guessing because this is a new product, there seems to be limited information. And I don’t seem to be getting any response from those who promote it either.

Whats worse is that there is big fluctation in the price, at around 915. Don’t know if this is a tracking error, but seems weird.

And I fear its not as liquid as I hoped!

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5

it is indeed very liquid. I have been buying and selling very frequently quite large amounts and have had no problem. In fact my impression is that it is far superior to liquid bees both in transparency and in returns. parking the funds in liquid case even for a few days seems to be giving a return of above 6% (annual).

6

Hi All,

I understand Liquidcase is better than Liquidbees as it avoids tax implications. Is there any other points available to compare. I am not able to compare the returns too.

if you have any details, Kindly share.

7

Can someone explain the spikes you see on a daily basis. Is it due to lack of liquidity or is there some tracking error?

8

@cvs

Saw some brokers allowing MTF for liquid funds. Any use case or they are just fooling retailers?

9

If you are referring to a “guaranteed# loss”
due to typical MTF-interest exceeding typical returns from liquid funds,
then agreed, usually doesn’t make sense to purchase Liquid funds on MTF margin.

# - Not an absolute guarantee, if the interest to be paid on MTF is fixed, but the returns from Liquid funds are variable.
A couple of scenarios where it *might* make financial sense for the individual.

  1. Arbitrage promotional MTF rates

    • Exploiting temporary/promotional offers.
      • Borrow during discounted MTF windows.
        Park capital in liquid funds.
        Pocket the positive yield spread.
        Exit MTF before the standard margin rates apply.

  2. AUM padding to qualify for perks

    • Artificially inflating account size to unlock any broker perks.
      (eg. reduce brokerage, additional tools, …)
      • The net cost (Liquid-fund-returns - MTF-interest)
        is absorbed by the individual as the “cost of doing business”.
      • Financially makes sense if value of perks exceeds the net cost.

On a related note,
IMHO, it is very useful to continue with this skeptical mindset
and apply it to other broker-offerings and financial markets/instruments too.

Several financial products in the “markets”
are structured with negative expected value for the average user.
Relying on UI dark patterns and cognitive biases (eg. illusion of control, sunk-cost fallacy, endowment effect) to drive participation/engagement.

1 Like