InvestorQ : What is the difference between an ETF and the liquid funds?
Gayatri Surendran made post

What is the difference between an ETF and the liquid funds?

AR Kadam answered.
2 years ago

Till date ETF's mostly consist of Equity Stocks replicating the indexes like Nifty, Sensex, Gold or any other such index of commodity or sector. Soon there will be first Debt ETF in India called Bharat Bond ETF to be launched on Dec 12, 2019.

Liquid Funds majorly consist of debt financial instruments/securities with maturity period of 91 days or less.


Ira Shah answered.
2 years ago
Liquid ETF:
A liquid exchange-traded fund or Liquid ETF is designed to provide investors the benefit of low-risk investment along with higher liquidity. These funds are readily available in cash, which means you can withdraw the money from the fund at any time. This is available on stock exchanges just like any other stock and has lower transaction fees than mutual funds or any other stock. Investment in these funds means you earn dividends daily and they are collected and reinvested and the money is credited to your d-D-mat account over a period of 30 days.

Normal ETF:
An ETF is a combination of different securities pooled together that are traded on a stock exchange, just like any other stock. The prices of these funds fluctuate throughout the day, unlike mutual funds that are traded once after the closure of the market.
Basically, ETF is the type of fund that owns assets like – commodities, stocks or futures, but has its ownership divided into shares that are traded on any stock exchange.

These funds have a comparatively higher maturity period than that of liquid ETFs. However, just like liquid ETFs, it is inexpensive and transparent. So, if you’re looking for something that has features of ETF but has a low maturity period, then Liquid ETFs can be the best option for you.