DSP BlackRock Liquid ETF is the new kid on the liquid fund block. Exchange-traded funds (ETFs) are listed and traded on exchanges just like other stocks and bonds. However, rather than being just one security, ETFs are structured as a fund or a basket of securities put together with a specific investment objective. For liquid funds, the objective is to deliver steady returns with very low volatility. Put together, you get a low-risk daily return option that can be traded on exchanges. DSP BlackRock Mutual Fund has positioned this fund as a convenient solution for utilisation of cash balances between trades on stock exchanges. This is only the second liquid fund ETF available in the market. Reliance ETF Liquid Bees is the other one, started in 2003 under Benchmark Asset Management.
The addition of this latest scheme to the liquid fund category, where most of the schemes are in the open-ended mutual fund format, helps broaden access via the exchanges. However, liquid funds have many other uses for investors.
