Zerodha’s push into liquid ETFs is quietly reshaping the fixed-income landscape in India as investors seek higher-yield, cash-like instruments amid low savings rates and market volatility. Liquid ETFs were traditionally a niche asset, mainly used by traders for cash management and pledging, but they are now attracting a broader investor base because of competitive returns and simplicity.
At the centre of this shift is Zerodha’s Nifty 1D Rate Liquid ETF (LIQUIDCASE), which has gathered an AUM of around ₹6,500 crore in under two years, directly challenging longstanding products like Nippon India Liquid BeEs that previously dominated this segment. Investors are drawn by the ETF’s near-6 % annualised returns and the convenience of trading and managing cash via a stock exchange, without the tax or dividend tracking complexities often associated with traditional liquid funds.
Unlike classic liquid mutual funds, these ETFs are designed to offer both liquidity and modest yield — making them more attractive than idle bank balances in an era of muted interest rates. The growth-NAV structure of Zerodha’s liquid ETF, which reflects returns directly in its price, also makes performance easier to track for investors.
This surge in liquid ETF adoption reflects a “silent revolt” in fixed-income investing, where individual investors and traders are redistributing their cash into exchange-traded products that offer better transparency, easier access and relatively higher returns than many conventional fixed-income options.
In essence, Zerodha’s success with liquid ETFs underscores a broader change in fixed-income behaviour — shifting from bank deposits and traditional money market funds toward exchange-traded, liquid and yield-oriented instruments that can serve both cash parking and short-term investment needs.
