Tuesday, January 24, 2012

Liquid BeeS : IS it worth a thought?

Liquid BeeS is an Indian Exchange Traded Fund. It is the world's first Money market ETF. This aims to provide returns by investing in Money market instrument such as Call Money, Short term govt securities, Repos etc.

The following link provides a good picture of Liquid BeeS

Like many other ETFs which carry the name BeeS, the Liquid BeeS fund is managed by Goldman Sachs. The Liquid BeeS aims to provide a return better than a savings bank account. The tax is deducted at source. The prices at which Liquid BeeS trade are 1000, 1000.01 and 999.99. Usually a small investor will be able to buy or sell at 1000.

Daily dividends are declared to maintain the price at 1000. These dividends can be viewed from the link below:

Many brokers have waived of any transaction costs associated with purchase or sale of Liquid BeeS. However personally, I felt cheated when ICICIDIRECT charged me a transaction cost of Rs.84 for my meager Rs.10,000 investment.

The custodians don't charge the DP anything for the trading of this unique ETF. So, ICICIDIRECT is just ripping you wherever possible.

Hence go ahead with LiquidBees on your idle cash only if your DP doesn't levy any transaction cost on this.

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