I saw this recommendation that I should park my excess funds in Liquid Bees (NSE: LIQUIDBEES), so that I would have access to immediate liquidity if I wanted to shift funds to other stocks rather than having them in my Savings Account lying "idle". So Lo and Behold I dumped some money via a HDFC Securities account.
Oh, What are Liquid BEES?
Its an Exchange Traded Fund (ETF) based on investments in Tri-Party Repo on G-Sec or T-bills /Repo & Reverse Repo. (also can be read as relatively low risk blah blah blah blah instruments). The weird thing is that these BEES are always maintained at INR 1000/- per unit, give or take one paisa. I don't know how they manage this, but if you want to know more, check this post here . Gains are credited in the form of fractional units in the same ETF.
Instead of leaving funds idle in brokerage accounts, it was recommended that we park it in Liquid BEES
Why do I say I got stung?
First off, HDFC securities charged me brokerage on Liquid BEES, which I for some weird reason did not think about at all.
Secondly, I don't do margin trading or day trading or options trading. So I rarely park funds in my brokerage anyway. Finally, India does not allow fractional trading. So when my little experiment did'nt go the way I wanted it to, I ended up with 0.25 units in my demat account, which will be stuck there till eternity, till I initiate a offline transfer back to the fund house (Nippon AMC in my case). It is a nightmare to do this offline trading. Oh, also, I can never close a demat account which has any holding. And I can never sell these holdings because they will not grow into a single whole unit, ever.
BTW, did I make any money from this trade?
I did. About 3.4% pre-tax (annualized) after holding it for a couple of months. Its not terrible, but the hassle of trying to redeem the 0.2 units in my demat account will loom in my head forever.
In conclusion
Don't get stung by Liquid BEES out of curiosity like I got stung. It has value to margin traders, option/futures traders or day traders. Not for people who invest sporadically, or based on guidance from some advisor, or fundamental investors.
Have you invested in Liquid BEES ?
Yes
No