Liquid funds are well known as substitute for saving accounts . Money can be withdraw any time without any load as well investment in liquid funds is also assumed to be safe as historical returns are stable over a period of time.
But liquid funds suffered a jolt on July 16 when NAV of most of the liquid funds dropped from previous days . It happened as yields across all maturities moved up.
Liquid funds generally won’t invest in maturities maturing above period of 3 months and so risk considered to be at the lowest.
Quantum mutual fund have explained overall scenario and link is provided below.
The Dip In NAV Of Liquid Funds explained– from Quantum Mutual Fund
