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Liquid ETFs Surge Past 6% Returns
12 Dec, 2025
Summary
- Liquid ETFs are seeing a surge in popularity and performance.
- Zerodha's liquid fund has rapidly grown to INR6,500 crore.
- Near 6% annual returns are attracting traders and banking customers.
Liquid exchange-traded funds (ETFs) are rapidly gaining traction, moving beyond their niche origins to offer attractive returns. Zerodha's liquid fund has seen explosive growth, reaching INR6,500 crore and positioning itself as a formidable competitor to established players like Nippon India Liquid BeEs, which previously dominated the market.
These ETFs are now yielding close to 6% annually, a significant draw for investors. Their appeal is amplified by current market conditions, characterized by volatility and persistently low savings rates. This has driven a notable shift towards fixed-income alternatives, with liquid ETFs emerging as a preferred choice for both active traders and traditional banking customers.
The rising popularity of liquid ETFs underscores a broader trend of investors seeking stable, higher-yielding options. Their dual utility for derivative traders, serving purposes like pledging and cash management, combined with their competitive returns, positions them as a key financial instrument in the current economic climate.
