1) Meaning : Liquid Funds are basically debt funds which invest in near risk free instruments
like call money & commercial papers.
2) Returns : Liquid funds in the last one year , has given a return of 7% ( as of July 07).
3) Risk : Investing in Liquid Funds can nearly assure your invested capital.
4) Maturity : While analysing Fund portfolio, just check its average maturity.For instance, 15
days denotes that the fund holds instruments maturing in 15 days.
5) Expense Ratio : Expense ratio of liquid funds is usually less than 1% p.a.
6) Taxation : The recent budget (2007) had proposed that liquid and money market funds
pay a dividend distribution tax (DDT) of 25% ; previously it was 12.5 %.
7) Dividend or Growth : One can buy either Dividend or Growth options of Liquid Fund.
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