section 2

1
CHAPTER-1
DESIGN OF THE STUDY
INTRODUCTION
Gold is part and parcel of India's culture and tradition. As money, jewelry,
status symbol and investment, gold has played a crucial role in the lives of
Indians for centuries. Afamily's wealth was determined on the quantity of gold
and land they had. Gold is considered Lakshmi (the Hindu goddess of wealth)
and a symbol of prosperity.
Traditionally and, as a religious practice, an Indian woman wears ornaments
throughout her life. Gold is her metal of choice for jewelry. Usually, from
childhood till the end of her life, the Indian woman will adorn herself with
various gold ornaments, depending on her wealth and status. The trend in
recent times is more toward platinum and white gold among the urban elite,
but for the middle- and lower-class families, jewelry means only gold.
Nothing can replacethestatus and importanceof gold in theIndian society. In
south India, thefirst food a newborn consumes will contain gold. No wedding
is complete without gold, and gold ornaments areexchanged during wedding
ceremonies, no matter which religion the bride and groom may belong to.
The Akshaya Trithiya is an auspicious day in the Hindu calendar to buy gold.
Devotees celebratethis day (usually in April) by buying gold. In recent years,
this festival has become highly commercialized as the jewelers have started

2
promoting thesales with discounts. Gold ornaments worth millions of rupees
are purchased across the country on this day.
However investment in physical gold is not much attractive because of high
making charges, impurity, less resale value, lack of income, problems in
physical storage, absence of financing, no tax advantage, subjectivity to
confiscation, partialliquidity, and limited growth potential..This limitation of
physical gold open door for gold Exchange Traded Funds.
As sector wise investment in gold is considered, 46% of investment is in gold,
32% in bars and coins,17%in technology and remaining 5% in gold
ETFs(source:geogitcomtrade.com). Actually gold ETFs is a smarter option over
any other form of gold. Many companies and banks issue gold ETFs. Efficient
and smart fund managers direct us in investing in the right ETFs. But
investment in gold ETF is very negligible.
This study deals with evaluating themarket performanceof14 gold ETFs listed
in NationalStock Exchangein terms of risk and returns,their comparison with
correspondinggold price and proving their attractiveness over physical gold
thus encouraging the people to invest in them.
This study intends to prove the attractiveness of gold ETFs over physical gold
which can provide valuable investment tips to investors of the country.

3
STATEMENT OF THE PROBLEM
Gold ETFs provided investors a means of participating in the gold bullion
market without the necessity of taking physical delivery of gold, and to buy
and sell that participationthrough the trading of units on stock exchange. In
India, gold ETFs were launched mainly with objective to increase the liquidity
for the better market efficiency.
Traditionally, Indians love to buy gold and they want to possess it. In fact, they
hardly go for ETFs which is just a piece of paper for them. But in India, during
the last few years, investment in gold ETFs has risen by Rs. 303 crore. But
accordingtothe statistics out of total investment in gold, the portions of ETFs
are just 5%. Even if the investors in gold ETFs are enhanced, the percentage is
very meager. This study focuses on encouraging more number of people to
shift their investment to gold ETF from its physical form.
Many of the investors arein an utter confusion in selecting their ETFs, and are
keen towards the opinion of fund managers. So this study sets targets to
identify the most suitably managed ETF for the benefit of the investors.
Large share of gold investors ignore gold ETFs because of their rude
understanding on theETF returns. So thelast problem of this study is to verify
whether gold ETF provide impressive return than the unpredictable gold
returns.
All these problems were successfully discussed in the study and solved
through proper facts, figures, analysis and interpretation.

4
REVIEW OF LITERATURE
Various studies on exchange traded funds related to small and medium
enterprises had been conducted in foreign countries .However, in Indian
context, thenumber is quitefew. Depending on thevarious issues of exchange
traded funds, the review has been discussed in brief as follows:
Mukesh Kumar Mukul, Vikrant Kumar and Sougata Ray (2012) made a study
on“Gold ETF Performance: A Comparative Analysis of Monthly Returns”
revealed that Gold investment has been a very important aspect for ages across
theglobe. This paper attempts to analyze the performance of gold Exchange-
Traded Fund (ETF) with respect to risk and return againstthediversified equity
fund and market portfolio. The study also examines therole of gold in hedging
equity investment risk. Thestudy is based on data for the period from January
2010 toAugust 2011. Theanalysis shows that gold ETF has given good return
in comparison to a diversified equity fund during the study period.
Prasanta athma (2011) has stated that Gold ETF is an emerging option of the
various investment alternatives available to the investor. The low volatility of
gold prices as compared to equity market, weakening of Indian Rupee against
US Dollar and growing uncertainty about global economy resulted in the
emergenceof Gold ETF as a strong asset class. Allocation of a small portion of
investment in Gold ETF would diversify the portfolio risk. The stabilization of
Expense Ratio made the task of selection of the best Gold ETF option easy.
Inclusion of any Gold ETF in the portfolio of assets would diversify the risk.
Gold ETFs also offer the benefit of lower incidenceof tax. In spite of the merits
of holding Gold ETFs, the investment in the same is low due to the low

5
awareness among the investors and the sentimental attachment of the
investors towards holding gold in the physical form.
Fisher (2008) in his articlementioned that Gold Exchange-Traded Funds(ETFs)
have made investing in theyellow metal very convenient and inexpensive. The
study expressed that they offer a way of participating in the gold bullion
market without thenecessity of physical delivery of gold. The study listed out
six reasons why gold ETFs are considered as the best way to invest in the gold.
The reasons mentioned are Wealth tax exemption, Income tax benefit,
Investment in small denominations, Hedging Convenience and better holding
of ETFs as compared to physical gold holdings.
Poterba & Shoven (2002)
He analyze that Exchange traded funds (ETFs) are a new variety of mutual
fund that first became available in 1993. ETFs have grown rapidly and now
hold nearly $80 billion in assets. ETFs are sometimes described as more 'tax
efficient ‘than traditional equity mutual funds, since in recent years, some
large ETFs have made smaller distributions of realized and taxable capital
gains than most mutual funds.
Alexander & Barbosa (2005)
He investigates the optimal short-term hedging of Exchange Traded Fund
(ETF) portfolios with index futures. Fromhis investigation he said “using daily
data from May 2000 to December 2004 on the four largest passive ETFs (the
Spider, the Diamond, the Cubes and the Russell iShare) and their
corresponding index futures we examine the performance of minimum

6
variance hedges for efficient variance reduction and for investors with
exponential utility”.
Nguyen, et al (2009)
He examine the opening of Exchange Traded Fund (ETF) markets in a
multimarket trading environment and find that the opening trades on the
American Stock Exchange(AMEX) are the most costly. This result is consistent
with the market power hypothesis which suggests thatthespecialists use their
informational advantage about the order imbalance at the open or take
advantage of the inelastic demand at the open by imposing wider spreads.
OBJECTIVES OF STUDY
 To evaluate themarket performance of gold Exchange Traded Funds in
India since their inception
 To analyzethe trends in gold pricemovements during thepost recession
period
 To compare the performance of gold ETFs with investment in India
during post recession phase.

7
SCOPE AND SIGNIFICANCE OF STUDY
The study is beneficial for following parties:
 Investors
The study helps the investors in shifting their investment option; from physical
gold to gold ETF.It directs their way in choosing the right ETF by evaluating
them in terms of their performance.
 Investment firms
Investment firms which offer gold ETF schemes to the investors get an
opportunity tocomparetheperformanceof their schemes with that of others.
This will help to formulate and implement needed strategies to attract the
potential investors to their scheme.
 Policy makers
The outcome the study helps the policy makers to design suitable policies to
provide conducive environment for gold ETF investors in India. It also help
them to think of starting ETF on other metals.

8
METHODOLOGY
 Sample and data
The study was purely based on the secondary data. Financial information with
regard toETFs was collected from thesite of National Stock Exchange.14 gold
ETFs listed in NSE was taken for study. Opening price, closing price, high price,
low price, and last graded price, total traded quantity, and turnover of ETFs
were considered. Closing value has taken as major input to data analysis.
 Period of study
Only four year have been completed since the inception of Gold ETF schemes
in India. So thestudy has taken this 4 year period from 2010-2014.data was
initially collected on daily basis, sorted intospreadsheet and then converted in
to monthly basis and analysis was done on that basis.
 Tool for analysis
The tooling of the study was done using descriptive statistics. Descriptive
statistics is a set of brief descriptive coefficients that summarizes a given data
set, which can either be a representation of the entire population or a sample.
The measures used to describe the data set are measures of central tendency,
measures of variability or dispersion
Analysis was done in term of:
 Mean
 Median
 Standard deviation
 Sqweness
 Kurtosis
 Co-efficient of variation

9
LIMITATION OF STUDY
 The analysis was based on secondary data. Soaccuracy of study depends
on the accuracy of source of data collection.
 The study is limited to gold ETFs available only in India.
 The study was completed in a short span of time, so it has its own
limitation
 ETF is considered tobe a vast topic. So any further shortcomings might
be due to our lack of experience in this field.

10
CHAPTER-2
EXCHANGE TRADED FUNDS INVESTMENT- A
DISCUSSION
Nobody is born rich and not everybody goes from rags to riches in a matter of
weeks or months. A handfulof people seem to turn everythingthey touchinto
gold. Most others are either barely comfortable or spend their life time
struggling. Many want to be rich are financially free, but never achieve that
although weall have a potential to do so. It is necessary to control and fulfill
our financial destiny, by sound investment planning and executing the
investment plan even better.
An investment is the commitment of fund made with an expectation of some
positive returns. Investmentmeans purchaseof some financialasset that yield
a return which is proportionatetotherisk assumed over some futureperiod of
time. It was an economic activity that fascinates the people from all walks of
life regardless of their education, status, occupation, family background etc.
Sharpedefines investment as “investment is a sacrificeof certain present value
for some uncertain future value”. In the words of Murad “investment is an
essentialrequirements for fullemployment and keep to prosperity in a capital
economy

11
CHARACTERISTICS
1. Return: an investment is made with an expectation of earning a return .the
amount of return froman investment depends on maturity period and several
other factors. Thereturns may be earned in theform of dividend or interest in
the form of capital appreciation.
2. Risk: risk in an investment relates to thevariability of returns. It varies from
investment to investment. Higher the return expected more will be the risk
and vice versa.
3. Safety: safety of the investment refers to certainty of return of initially
invested funds; capital should be paid back without loss of value and delay.
4. Liquidity:an investment which is easily saleable or marketable is said to be
possessing liquidity. An investment is said to be marketable if
 It can be transacted quickly
 The cost of transaction is less
 The price change between two successive transactions is negligible
5. Convenience: by conveniencewemean the ease with which the investment
can be made and managed. It varies widely.
6. Tax benefits: Some investment provides tax benefits and some do not. Tax
benefits are of three types
 Initial tax benefits
 Continuing tax benefits
 Terminal tax benefits

12
OBJECTIVES
1. Safety: safety investments are the best means of preserving principal along
with a specified rate of return. Safest investments include
Capital market Money market
Government bonds Treasury bills
Corporate bonds Certificate of Deposit
Commercial paper
2. Rate of return: rate of return is the ratio of the sum of annual income and
priceappreciation to the purchase price of investment. It includes two parts
namely, annual income and capital gain or loss.
𝑅𝑎𝑡𝑒 𝑜𝑓 𝑟𝑒𝑡𝑢𝑛 =
𝐴𝑛𝑛𝑢𝑎𝑙 𝑖𝑛𝑐𝑜𝑚𝑒 + (𝐸𝑛𝑑𝑖𝑛𝑔 𝑝𝑟𝑖𝑐𝑒 − 𝑃𝑢𝑟𝑐ℎ𝑎𝑠𝑒 𝑝𝑟𝑖𝑐𝑒)
𝑃𝑢𝑟𝑐ℎ𝑎𝑠𝑒 𝑃𝑟𝑖𝑐𝑒
3. Growth of capital: capital gain refers to the gain when the security is sold
for a price that is higher than its purchase price. Selling at a lower price is
referred to as capital loss. It is closely associated with the purchase of equity
shares, particularly growth securities.
4. Risk: risk of an investment refers tothe variability of rate of return. It is the
deviation of outcomeof an investment fromits expected value. The challenge
of an investor is to achieve higher return while keeping the risk at lowest
possible level.
5. Marketability: an investment whichis easily saleableor marketableis said to
be possessing liquidity. An investment is said to be marketable if

13
 It can be transacted quickly
 The cost of transaction is less
 The price change between two successive transactions is negligible
6. Tax benefits: Some investment provides tax benefits and some do not. Tax
benefits are of three types
 Initial tax benefits
 Continuing tax benefits
 Terminal tax benefits
7. Hedge against inflation: a good investment act as a weapon for hedging the
effects or impact of inflation
AVENUES OF INVESTMENT
CHART.2.1
1. Non marketablefinancialassets
2. Bonds
3. Mutualfunds
4. Real estates
5. Equity shares
6. Money market instruments
7. Life insurancepolicy
8. Precious objects
9. Financialderivatives

14
INVESTMENT PROCESS
CHART.2.2

15
SUMMARY EVALUATION OF VARIOUS INVESTMENTS
TABLE.2.1.
Investment
Avenues
Current
Yield
Capital
Appre.
Risk Liquidity Tax
Planning
Convenience
Equity
Shares
Low High High Fairly
Large
Ex.for long
Term
Cap. Gain
High
Non convertible
Debentures
High Negotiable Low Average Nil High
Equity schemes
(ELSS)
Low High High High Ex. for
Specified
Schemes
Very
High
Debt
Schemes
High Low Low High Nil Very
High
Bank
Deposits
Moderate Nil Negligible High Tax benefit
Only for
Tax saving
F.D
Very
High
Public
Provident
Fund
Nil High Nil Average Sec.80(c)
Benefit
Very
High
Life
Insurance
Policies
Nil Moderate Nil Average Sec 80(c)
Benefit
Very
High
Residential
House
Moderate Moderate Negligible Low Only for
Self
Residential
Building
Fair
Gold & Silver NIL Moderate Average Average NIL Average

16
EXCHANGE TRADED FUNDS
Exchangetraded funds arebaskets of securities that aretraded, like individual
stocks, on an exchange. Unlike regular open-end mutual funds, etfs can be
bought and sold throughout the trading day like any stock.
Most etfs chargelower annualexpenses than index mutualfunds.However, as
with stocks, one must pay a brokeragetobuy and sell ETF units, which can be
a significant drawbackfor those who trade frequently or invest regular sums
of money.
They first came into existence in the USA in 1993. It took several years for
themto attractpublic interest. But once they did, the volumes took off with a
vengeance. Over thelast few years more than $120 billion (as on June2002) is
invested in about 230 etfs. About 60% of trading volumes on the American
Stock Exchangearefrometfs. The most popular etfs are qqqs (Cubes) based on
the Nasdaq-100 Index, spdrs (Spiders) based on the S&P 500 Index, ishares
based on MSCI Indices and TRAHK (Tracks) based on the Hang Seng Index.
The average daily trading volume in QQQ is around 89 million shares.
Their passive natureis a necessity: the funds rely on an arbitrage mechanism
to keep the prices at which they traderoughly in line with the net asset values
of their underlying portfolios. For the mechanism to work, potential
arbitragers need to have full, timely knowledge of a fund's holdings.

17
HISTORY
Etfs had their genesis in 1989 with Index Participation Shares, an S&P
500 proxy that traded on the American Stock Exchange and the Philadelphia
Stock Exchange. This product, however, was short-lived after a lawsuit by
the Chicago Mercantile Exchange was successful in stopping sales in the
United States. Similar product, Toronto Index Participation Shares, started
trading on the TorontoStock Exchange in 1990. Theshares, which trackedthe
TSE 35 and later the TSE 100 stocks, proved to be popular. The popularity of
theseproducts led the American Stock Exchange to try to develop something
that would satisfy SEC regulation in the United States
.
Nathan Most and Steven Bloom, executives with the exchange, designed and
developed Standard & Poor's Depositary Receipts , which were introduced in
January 1993 Known as spdrs or "Spiders", thefund became the largest ETF in
the world. In May 1995 they introduced the midcap spdrs.
Barclays Global Investors, a subsidiary of Barclays plc, entered the fray in
1996 with World Equity Benchmark Shares, or WEBS, subsequently
renamed ishares MSCI Index Fund Shares. WEBS tracked MSCI country
indices, originally 17, of the funds' index provider, Morgan Stanley. WEBS
were particularly innovativebecausethey gavecasual investors easy access to
foreign markets. Whilespdrs were organized as unit investment trusts, WEBS
were set up as a mutual fund, the first of their kind.
In 1998, StateStreet GlobalAdvisors introduced "Sector Spiders", which follow
nine sectors of the S&P 500. Also in 1998, the "Dow Diamonds" were
introduced, tracking the famous Dow Jones Industrial Average. In 1999, the

18
influential "cubes”, were launched attempting to replicate the movement of
the NASDAQ-100.
In 2000 Barclays Global Investors put a significant effort behind the ETF
marketplace, with a strong emphasis on education and distribution to reach
long-term investors. The ishares line was launched in early 2000. Within 5
years ishares had surpassed the assets of any other ETF competitor in the U.S.
and Europe. Barclays Global Investors was sold to Blackrock in 2009. The
Vanguard Group entered the market in 2001.
Since then etfs have proliferated, tailored to an increasingly specific array of
regions, sectors, commodities, bonds, futures, and other asset classes. As of
September 2010, therewere916 etfs in theU.S., with $882 billion in assets, an
increase of $189 billion over the previous twelve months.
TYPES
 INDEX ETF
Index funds are ETF that hold securities and to attempt to replicate the
performance of a stock market index. An index fund seeks to track the
performanceof an index by holding in its portfolio either the contents of the
index or a representative sample of the securities in the index
 COMMODITY ETF
Commodity etfs invest in commodities, such as precious metals and futures.
Among thefirst commodity etfs were gold exchange-traded funds, whichhave
been offered in a number of countries. The idea of a Gold ETF was first

19
officially conceptualized by Benchmark Asset Management Company Private
Ltd in India when they filed a proposal with the SEBI in May 2002.
 LIQUID ETF
Liquid etfs are funds whose unit price is derived from Money market
securities comprising of government bonds treasury bonds,call money market
etc. Etfs are immediately tradable; therefore, the risk of price movement
between investment decision and time of trade is substantially less when etfs
are used in lieu of traditional funds.
ADVANTAGES
 Trade like stocks - You can buy and sell an ETF during market hours on
a real time basis as well as put advance orders on purchase such as
limits or stops. In case of conventional mutual funds, purchase or sale
can be done only once a day after the fund NAV is calculated.
 Low cost of investment- The passive investment stylewith low turnover
helps keep costs low. Etfs are known to have among the lowest expense
ratios compared to others schemes.
 Simple and transparent - The underlying securities are known and
quantities are pre-defined (In case of conventional mutual fund
schemes, one need to wait for the monthly factsheet). No form filling is
required if you transact in the secondary market. Investment can be
made directly from the fund house or the exchange.

20
 Supports small ticket investments - etfs are a great tool for investors
wanting tostart with a small corpus. The minimum ticket size is 1 unit
(in case of IIFL Nifty ETF, 1 unit is approximately 1/10th of Nifty level, i.e
Rs500, when Nifty is at 5000). Premium and discount also tends to be
higher in the futures segment, than in etfs.
 Etfs are taxed like stocks - Investors can take advantage of special rates
for short term and long-term capital gains.
 Buying and selling flexibility – etfs can be bought and sold at current
market prices at any time during the trading day, unlike mutual funds
and unit investment trusts, which can only be traded at the end of the
trading day. As publicly traded securities, their shares can be purchased
on margin and sold short, enabling the use of hedging strategies, and
traded using stop orders and limit orders, which allow investors to
specify the price points at which they are willing to trade.
 Market exposure and diversification – etfs provide an economical way
to rebalance portfolio allocations and to "equitize" cash by investing it
quickly. An index ETF inherently provides diversification across an
entire index. Etfs offer exposure to a diverse variety of markets,
including broad-based indices, broad-based internationaland country-
specific indices, industry sector-specific indices, bond indices, and
commodities

21
GOLD EXCHANGE TRADED FUNDS
Indians account for 23 per cent of the world's total annual demand for gold.
And now we havegot one more way to invest in the yellow metal. Benchmark
Mutual Fund launched India's first gold Exchange-Traded Fund (ETF) on 15
February followed by UTI Mutual Fund's gold scheme on 1 March 2007.
Others like Kotak Mutual Fund and Prudential ICICI Mutual Fund have also
firmed up plans and are expected to follow suit.
Gold etfs have been a much-anticipated development. These are expected to
address issues of higher prices, purity, costs of insurance and storage, and
liquidity associated with investing in physical gold. What does this mean for
an investor? Should gold beincluded in his portfolio? What valuewill it add to
his holding and overall investment strategy? These are questions that will
determinewhether gold etfs will be as big a success in India as they have been
in countries such as the US, the UK and Switzerland.
MEANING
Gold etfs are open-ended mutual fund schemes that will invest the money
collected from investors in standard gold bullion (0.995purity). The investor's
holding will be denoted in units, which will be listed on a stock exchange.
These are passively managed funds and are designed to provide returns that
would closely track the returns from physical gold in the spot market.
An investor can buy and redeem the units either directly from the mutual
fund, subject to certain stipulations, or from the stock exchange.

22
HISTORY
The first gold exchange-traded product was CentralFund of Canada, a closed-
end fund founded in 1961. It later amended its articles of incorporation in
1983 toprovide investors with an exchange-tradable product for ownership
of gold and silver bullion. It has been listed on the Toronto Stock
Exchange since 1966 and the AMEX since 1986.
The idea of a gold exchange-traded fund was first conceptualized
by Benchmark Asset Management Company Private Ltd in India when they
filed a proposal with the SEBI in May 2002. However it did not receive
regulatory approvalat first and was only launched later in March 2007. The
first gold ETF actually launched was Gold Bullion Securities, which listed 28
March 2003 on the Australian Securities Exchange. Graham Tuck well, the
founder and major shareholder of ETF Securities, was behind thelaunch of this
fund and enlisted N.M. Rothschild & Sons (Australia) Ltd, Citibank and
Deutsche Bank as market makers on the ASX.
ADVANTAGES
1. They're virtual.
When you buy gold etfs, though you own a certain amount of gold, you don't
actually get delivery of the yellow metal. You can store the units virtually in
your demat account and save yourself the trouble of having to protect your
gold from prying eyes of greedy relatives, robbers and looters.
2. They're pure.
Gold etfs only deal in 99.5 per cent purity gold. So by choosing them over
physical gold, you spare yourself the consequences of misplaced trust.

23
3. They're priced right.
We are not likely to buy gold at inflated prices. The problem with precious
metals is that there is a lot of scope for price disparities (read overpricing).
While one jeweler may offer the same quantity of gold at a certain price,
another would have a different tag attached to it. If your bargaining skills are
not good enough, gold etfs are the way to go.
4. They're more tax efficient.
The taxation systemfor gold etfs is thesame as for non-equity mutualfunds. If
you hold gold etfs for more than a year, you pay a long-term capital gains tax
of 10 per cent without indexation or 20 per cent with indexation, whichever is
lower, on the profits made. Gold etfs held for less than a year attract short-
term capital gains tax
5. They’re easier to sell.
Physical gold bought from banks cannot be sold back to them. That bought
from jewellers comes with an unfair 'commission' charged when you decide to
sell. With gold etfs, you don't have to go to 10 different jewellers who will fuss
over the quality and the price before handing you your spoils. They're more
liquid than physical gold and fetch you the market price.
6. They're available in small sizes.
Gold etfs are availablein small denominations and you don't haveto havelots
of sparecash to invest in gold anymore .One gold ETF unit represents 1 gram
of gold. You can even buy half a gram of gold if that's all you can afford this
month. And watch your gold pile and investments growat the rateyou choose.

24
7. They're wealth tax-free.
Physicalgold attracts wealth tax if you'reholding more than a certain amount.
At the moment, that amount is Rs 15 lakh. But there is no such taxation for
gold held throughgold etfs. The cash you save on tax you can always invest in
more gold... Etfs, of course
LIST OF GOLD ETFS
Gold etfs listed in nationalstock exchange(considered for study) is as follows:
TABLE.2.2
Scheme Name Symbol Objectives
Managed
By
Axis Gold ETF AXISGOLD
To generate returns that is in line with the
performance of gold.
Axis
Mutual
Fund
Goldman
SachsGold
Exchange
Traded
Scheme GOLDBEES
To provide returns those, before expenses,
closely correspond to the returns provided by
domestic price of gold through physical gold.
Goldman
Sachs
Mutual
Fund
UTIGOLD
Exchange
Traded Fund GOLDSHARE
To endeavour to provide returns that, before
expenses, closely track the performance and
yield of Gold. However the performance of
the scheme may differ from that of the
underlying asset due to racking error.
UTI
Mutual
Fund

25
HDFC Gold
Exchange
Traded Fund HDFCMFGEF
To generate returns that is in line with the
performance of gold, subject to tracking
errors.
HDFC
Mutual
Fund
ICICI
Prudential
Gold Exchange
Traded Fund IPGETF
ICICI Prudential Gold Exchange Traded Fund
seeks to provide investment returns that,
before expenses, closely track the
performance of domestic prices of Gold
derived from the LBMA AM fixing prices.
ICICI
Prudential
Mutual
Fund
Kotak Gold
Exchange
Traded Fund KOTAKGOLD
To generate returns those are in line with the
returns on investment in physical gold,
subject to tracking errors.
Kotak
Mutual
Fund
Quantum Gold
Fund (an ETF) QGOLDHALF
To provide returns those, before expenses,
closely correspond to the returns provided by
the domestic price of gold.
Quantum
Mutual
Fund
Reliance Gold
Exchange
Traded Fund RELGOLD
To provide returns that closely correspond to
returns provided by price of gold through
investment in physical Gold (and Gold related
securities as permitted by Regulators from
time to time). However, the performance of
the scheme may differ from that of the
domestic prices of Gold due to expenses and
or other related factors.
Reliance
Mutual
Fund
Religare Gold
Exchange
Traded Fund RELIGAREGO
To generate returns that closely corresponds
to the returns provided by investment in
physical gold in the domestic market, subject
Religare
Mutual
Fund

26
to tracking error.
SBI Gold
Exchange
Traded
Scheme SBIGETS
To seek to provide returns that closely
correspond to returns provided by price of
gold through investment in physical Gold
However, the performance of the scheme may
differ from that of the underlying asset due to
tracking error.
SBI
Mutual
Fund
Birla Sun Life
Gold ETF BSLGOLDETF
The investment objective of the Scheme is to
generate returns that are in line with the
errors.
Birla Sun
Life
Mutual
Fund
IDBI Gold
Exchange
Traded Fund IDBIGOLD
To invest in physical gold with the objective
to replicate the performance of gold in
domestic prices. The ETF will adopt a passive
investment strategy and will seek to achieve
the investment objective by minimizing the
tracking error between the Fund and the
underlying asset.
IDBI
Mutual
Fund
Motilal Oswal
most Shares
Gold ETF MGOLD
provide return by investing in Gold Bullion.
Motilal
Oswal
Mutual
Fund
Canara Robeco
Gold Exchange
Traded Fund CRMFGETF
generate returns that are in line with the
errors.
Canara
Robeco
Mutual
Fund

27
CHAPTER-3
RISK AND RETURN ANALYSIS: A DISCUSSION OF
THEORY AND MODEL
Investment decisions areinfluenced by various motives. Some people invest in
a business to acquire control and enjoy the prestige associated with it. Some
people invest in expensive yachts and famous villas to display their wealth
.most investors however are largely guided by themotive of earning a return a
return on their investment.
For earning the return the investor have to invariably bear
some risk. In generalrisk and return gohand in hand .while the investors like
thereturn they abhor therisk. Investment decision there involve the tradeoff
between the risk and return .since the risk and the return are central to the
investment decisions ,we must clearly understand what risk and return are
how they should be measured .
CONCEPT OF RISK
Risk means the chance of loss. Normally the term risk is different from the
term uncertainty. Usually probability of losing something is risk. But in the
case of a certainty nothing can be predicted, so no probability computation is
possible. But in security analysis we use both the term risk and uncertainty
inter changeably. Here risk means the uncertainty surrounding the future
streamof return and repayment of capital. If an investment’s returnsare fairly
stable, it is considered to be a low risk investment. But when the return from
an investment is fluctuating widely then it is called risky investment. The risk

28
and return arepositively correlated. Higher the risk higher will be the return
and lower the risk lower will be the return.
According to john. J. Hampton “risk is the chance of future loss that can be
foreseen”
ELEMENTS OF RISK
The elements of risk may be broadly classified into two groups.
1. Systematic risk - this type of risks is external to a company and affects a
largeno. of securities simultaneously. Theserisks aremostly an uncontrollable
in nature. Risk produced by theseexternalfactors is known as systematic risk.
2. Unsystematic risk - there are certain factors which are internal to the
company and affect only those particular companies. The risks due to these
factors arecalled unsystematicrisk. These risks are controllable in nature. By
building a powerful portfolio we can diversify these risks. So
Total risk = systematic risk + unsystematic risk (specific risk)
TYPES OF SYSTEMATIC RISK
Systematic risk is mainly divided into three,
Interest rate risk: it is thedevaluation in bond prices due to the increase in the
market interest rate. It particularly affects debt securities like bonds and
debentures. It also affects equity shares. When the market interest rate
increases, the debt instruments become more attractive. Then the investors
shall dispose their shareholdings and utilize the proceeds for making

29
investment in debt instruments. This action cause decline in the value of
stocks.
Market rate risk: market risk is theincreased variability of security returnsdue
to the alternating movements of the share markets. A general decline in share
price is referred to as bearish trend (downward trend).general rice in share
price is called bullish trend (upward trend). Due to these variations in stock
market movement the investors return will also be varied.
Purchasing power risk: purchasing power risk refers to variations in investor
returns duetoincreasein inflation rate. Thetwo important causes of inflation
are increasein the cost of production and increasein demand for goods. When
demand is increasing but supply cannot be increased the price of the goods
increases. The inflation due to this excess demand is called demand pull
inflation. Similarly when the cost of production increases the price will be
increased which lead to inflation and this inflation is called cost push inflation.
Both of these inflations shallaffect thepurchasing power of currency there by
the value of all investment in an economy.
TYPES OF UNSYSTEMATIC RISK (SPECIFIC RISK)
There are mainly two types of unsystematic risk.
Business risk:business risk means a risk due to the poor operating conditions
faced by a company. When a company’s operating conditions become worse
etc. The operating cost will be increased which in turn bring into a reduction
in its operating income. Sincethis risk element is associated with the securities
of only poor performing companies, we can avoid it through portfolio
diversification.

30
Financial risk: the increase or decrease in earnings per share due to the
presenceof debt capitalin thetotal capital structure of a company is referred
to as financialrisk. When thereis a debt component in thecapitalstructureof
a company, theremay be variability in thereturns availabletothe equity share
holders. If the companies rate of return higher than the interest rate payable
on the debt, earning per share would increase. If the rate of return is lower
than theinterest rateearning per sharewould be decreased because interest is
a compulsory payment.
TOOLS FOR MEASURING THE RISK
1. Variance and standard deviation( 𝝈)
Risk refers to dispersion of the variable. Standard deviation is the value of the
variables around its mean. It is the square root of the sum of squared
deviation from the mean dividend by the no. Of observation and it is the
square root of variance.
𝑉𝑎𝑟𝑖𝑎𝑛𝑐𝑒 𝛴2
=
∑ (𝑟𝑖 −𝑁
𝐼=0 𝑅̅ )2
𝑁 − 1
𝛴 = √ 𝛴2
𝛴2
= 𝑣𝑎𝑟𝑖𝑎𝑛𝑐𝑒 𝑜𝑓 𝑟𝑒𝑡𝑢𝑟𝑛
𝛴 = 𝑠𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝑑𝑒𝑣𝑖𝑎𝑡𝑖𝑜𝑛 𝑜𝑓 𝑟𝑒𝑡𝑢𝑟𝑛
𝑅𝑖 = 𝑟𝑒𝑡𝑢𝑟𝑛 𝑓𝑟𝑜𝑚 𝑡ℎ𝑒 𝑠𝑡𝑜𝑐𝑘 𝑖𝑛 𝑝𝑒𝑟𝑖𝑜𝑑( 𝐼 = 1,2…. . 𝑛)
𝑅̅ = arithmetic return
n = number of periods

31
2. Beta method
The systematic risk of an investment is measured by co-variance of an
investment’s return with returns of market. Once the systematic risk of an
investment is calculated it is then divided by the market risk, to calculate a
relative risk measure of systematic risk. This relative measure of risk is called
the ‘beta’ and these usually represented by the symbol β.
Interpretation of β is as follows.
1. Β >1- aggressive shares
2. Β<1-defensive shares
3. Β=1-neutral shares
3. Correlation method
Using the correlation method formula for beta calculation is given below.
𝛽 =
𝑅𝐼𝑚 𝛴𝐼 𝛴 𝑀
𝛴 𝑀
2
𝛽 = beta of a investment in shares
𝑅𝐼𝑚 = 𝑐𝑜𝑟𝑟𝑒𝑙𝑎𝑡𝑖𝑜𝑛 𝑐𝑜 − 𝑒𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑡 𝑜𝑓 the return in the market
𝛴𝐼 = 𝑠𝑑 𝑜𝑓 𝑡ℎ𝑒 𝑟𝑒𝑡𝑢𝑟𝑛 𝑜𝑓 𝑠𝑡𝑜𝑐𝑘
𝛴 𝑀 = 𝑠𝑑 𝑜𝑓 𝑟𝑒𝑡𝑢𝑟𝑛 𝑜𝑓 𝑚𝑎𝑟𝑘𝑒𝑡 𝑖𝑛𝑑𝑒𝑥
𝛴 𝑀
2
= 𝑣𝑎𝑟𝑖𝑒𝑛𝑐𝑒 𝑜𝑓 𝑟𝑒𝑡𝑢𝑟𝑛𝑠 𝑜𝑛 𝑡ℎ𝑒 𝑚𝑎𝑟𝑘𝑒𝑡
4. Regression method
This method establishes a linear relationship between dependent variable and
independent variable.
Regression equation will be
𝑌 =∝ +𝛽𝑥
Y=percentage change in price of specific security
X=percentage change in market price index
Α= intercept of regression line

32
Β=slope of regression line
∝= Ӯ − 𝛽𝑋̅
Ӯ, 𝑋̅ = 𝑎𝑟𝑖𝑡ℎ𝑚𝑒𝑡𝑖𝑐 𝑚𝑒𝑎𝑛
𝛣 =
𝑁∑𝑥𝑦 − (∑𝑥)(∑𝑦) ± √ 𝑏2 − 4𝑎𝑐
𝑁∑𝑋2 − (∑𝑥)2
Alpha: it is the measureof residualrisk. It is sometimes called ‘selecting risk’ of
some market index. Technically speaking alpha is the intercept in the
estimation model. It is expected to be equal to the risk free rate times(1-β)
5. Capital Asset Pricing Model (CAPM)
CAPM is the model that determines therelationship between risk and expected
return and that is used in the pricing of risky securities. It relates the return
trade off individual asset to the market return
CAPM provides therequired return based on the perceived level of systematic
risk of an investment
𝑟̅𝑖 = 𝑟𝑓 + 𝛽𝑖 (𝑟 𝑚 − 𝑟𝑓)
𝑟𝑓 = 𝑟𝑖𝑠𝑘 𝑓𝑟𝑒𝑒 𝑟𝑎𝑡𝑒
𝛽𝑖 = 𝑏𝑒𝑡𝑎 𝑜𝑓 𝑡ℎ𝑒 𝑠𝑒𝑐𝑢𝑟𝑖𝑡𝑦
𝑟 𝑚 = 𝑚𝑎𝑟𝑘𝑒𝑡 𝑟𝑒𝑡𝑢𝑟𝑛

33
CONCEPT OF RETURN
Return is the gain/income from the investment. We can distinguish between
therealized return and expected returns. Theexpected returns arethe returns
hoped to get beforethe investment is made or while making. Realized return is
the return actually earned
CHART.3.1
MEASUREMENT OF TOTAL RETURN
𝑅 =
𝐶 + (𝑃𝐸 − 𝑃𝐵 )
𝑃𝐵
𝑅 = 𝑡𝑜𝑡𝑎𝑙 𝑟𝑒𝑡𝑢𝑟𝑛 𝑜𝑣𝑒𝑟 𝑡ℎ𝑒 𝑝𝑒𝑟𝑖𝑜𝑑
𝐶 = 𝑐𝑎𝑠ℎ 𝑝𝑎𝑦𝑚𝑒𝑛𝑡 𝑟𝑒𝑐𝑖𝑒𝑣𝑒𝑑 𝑑𝑢𝑟𝑖𝑛𝑔 𝑡ℎ𝑒 𝑝𝑒𝑟𝑖𝑜𝑑
𝑃𝐸 = 𝑒𝑛𝑑𝑖𝑛𝑔 𝑝𝑟𝑖𝑐𝑒 𝑜𝑓 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡
𝑃𝐵 = 𝑏𝑒𝑔𝑛𝑛𝑖𝑛𝑔 𝑝𝑟𝑖𝑐𝑒
realised
return
periodic cash
reciept
changein the
priceof asset

34
TOOLS FOR THE MEASUREMENT OF RETURN
Historical return:
1. Cummulative wealth index
A return measure like total return reflects changes in the level of the wealth.
For some purposes it is more usefulto measurethe level of wealth rather than
thechanges in the level of wealth. To do this we must measure the cumulative
effect of the returns over time.
Equation of the return through the cumulative effect is given below
𝑅𝑛 =
𝐶𝑊𝐼𝑛
𝐶𝑊𝐼 𝑛−1
− 1
𝑅𝑛 = 𝑡𝑜𝑡𝑎𝑙 𝑟𝑒𝑡𝑢𝑟𝑛 𝑓𝑜𝑟 𝑝𝑒𝑟𝑖𝑜𝑑 𝑛
𝐶𝑊𝐼 = 𝑐𝑢𝑚𝑢𝑙𝑎𝑡𝑖𝑣𝑒 𝑤𝑒𝑎𝑙𝑡ℎ 𝑖𝑛𝑑𝑒𝑥
𝐶𝑊𝐼𝑛 = 𝑊𝐼0 (1+𝑅1 ) (1+𝑅2 )…… (1+𝑅 𝑛 )
𝑊𝐼0 = 𝑡ℎ𝑒 𝑏𝑒𝑔𝑛𝑛𝑖𝑛𝑔 𝑖𝑛𝑑𝑒𝑥 𝑎𝑡 𝑡ℎ𝑒 𝑒𝑛𝑑 𝑜𝑓 𝑛
2. Return relative
Return relative helps in measuring the return in a slightly different manner.
This is particularly truewhen a cumulativewealth index has to be calculated,
becausein such calculationsnegative returns cannot be used. The concept of
return relative is used in such cases

35
𝑟𝑒𝑡𝑢𝑟𝑛 𝑟𝑒𝑙𝑎𝑡𝑖𝑣𝑒 =
𝐶 + 𝑃𝐸
𝑃𝐵
= 1 + 𝑡𝑜𝑡𝑎𝑙 𝑟𝑒𝑡𝑢𝑟𝑛
3. Summary statistics
In theinvestment we need summary statisticsof series of totalreturns. The two
commonly used summary statistics are arithmetic mean and geometric mean
Arithmetic mean
The arithmetic mean of a series of total return is defined as
𝑅̅ =
∑ ri
n
I=0
N
𝑅̅ = 𝑎𝑟𝑖𝑡ℎ𝑚𝑒𝑡𝑖𝑐 𝑚𝑒𝑎𝑛
𝑅𝑖 = 𝑖𝑡ℎ 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑡ℎ𝑒 𝑡𝑜𝑡𝑎𝑙 𝑟𝑒𝑡𝑢𝑟𝑛(1,2,3…..
𝑛 = 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑡𝑜𝑡𝑎𝑙 𝑟𝑒𝑡𝑢𝑟𝑛
Geometric mean
Gm is the nth root of theproduct resultingfrommultiplying a series of return
relatives minus one. It describe the true average return
𝐺𝑀 = (1 + 𝑅1) (1+𝑅2 )……..(1 + 𝑅 𝑛 )
1
𝑛 − 1
4. Real returns
Returns are of two types, nominal return and real return. To convert the
nominalreturn in to real return an adjustment has tobe made for the factor of
inflation

36
𝑟𝑒𝑎𝑙 𝑟𝑒𝑡𝑢𝑟𝑛 =
1 + 𝑛𝑜𝑚𝑖𝑛𝑎𝑙 𝑟𝑒𝑡𝑢𝑟𝑛
1 + 𝑖𝑛𝑓𝑙𝑎𝑡𝑖𝑜𝑛 𝑟𝑎𝑡𝑒
Expected return:
1. The probability distribution
The probability distribution of an event represents the likelihood of its
occurrence. It helps to determinethechance of rising or falling of stock price
Based on probability distribution,therateof return can be computed by using
 Expected rate of return
 Standard deviation of return
2. Expected rate of return
It is the weighted averageof all possible returns multiplied by their respective
probabilities
𝐸(𝑅) = ∑ 𝑅𝑖
𝑛
𝑖=0
𝑃𝑖
𝐸( 𝑅) = 𝑒𝑥𝑝𝑒𝑐𝑡𝑒𝑑 𝑟𝑒𝑡𝑢𝑟𝑛 𝑓𝑟𝑜𝑚 𝑡ℎ𝑒 𝑠𝑡𝑜𝑐𝑘
𝑅𝑖 = 𝑟𝑒𝑡𝑢𝑟𝑛 𝑓𝑟𝑜𝑚 𝑠𝑡𝑜𝑐𝑘 𝑢𝑛𝑑𝑒𝑟 𝑠𝑡𝑎𝑡𝑒 𝑖
𝑃𝑖 = 𝑝𝑟𝑜𝑏𝑎𝑏𝑖𝑙𝑖𝑡𝑦 𝑡ℎ𝑎𝑡 𝑡ℎ𝑒 𝑠𝑡𝑎𝑡𝑒 𝑖 𝑜𝑐𝑐𝑢𝑟𝑠
N= 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑝𝑜𝑠𝑠𝑖𝑏𝑙𝑒 𝑠𝑡𝑎𝑡𝑒𝑠
4. Standard deviation of return
Standard deviation of return can be calculated through following equation
𝜎2
= ∑𝑃𝑖 (𝑅𝑖 − 𝐸( 𝑅))2
𝜎2
= 𝑣𝑎𝑟𝑖𝑒𝑛𝑐𝑒
𝑅𝑖 = 𝑟𝑒𝑡𝑢𝑟𝑛 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑖𝑡ℎ 𝑝𝑜𝑠𝑠𝑖𝑏𝑙𝑒 𝑜𝑢𝑡𝑐𝑜𝑚𝑒

37
𝑃𝑖 = 𝑝𝑟𝑜𝑏𝑎𝑏𝑖𝑙𝑖𝑡𝑦 𝑎𝑠𝑠𝑜𝑐𝑖𝑎𝑡𝑒𝑑 𝑤𝑖𝑡ℎ 𝑡ℎ𝑒 𝑖𝑡ℎ 𝑝𝑜𝑠𝑠𝑖𝑏𝑙𝑒 𝑜𝑢𝑡𝑐𝑜𝑚𝑒
𝐸( 𝑅) = 𝑒𝑥𝑝𝑒𝑐𝑡𝑒𝑑 𝑟𝑒𝑡𝑢𝑟𝑛
2. Continuous probability distribution
In a continuous probabilitydistribution probabilities are assigned to intervals
between two points on a continuous curve and thus the return is calculated
normal distribution a continuous probability distribution is commonly used,
resembles a bell shaped curve. It appears that the stock returns at least over
short time intervals are approximately normally distributed.
All the tools discussed in this chapter have a crucial role in evaluating a
portfolio and they direct an investor in selecting the right investment option.

38
CHAPTER-4
DATA ANALYSIS AND INTERPRETATION
DATA ANALYSIS
The project on (topic) is purely based on secondary data. The data to conduct
this study was obtained from the site of National Stock Exchange (NSE).
Financial details about 14 gold ETFs listed in NSE, from 1st
January 2010 to
31st
November 2013 were collected and then sorted using spread sheet.
Tooling was done through default software programme. Indicators with
regard to the performance of ETFs and corresponding gold price were
calculated by tooling, then for data analysis and interpretation.
This chapter deals with thetabulation, comparison, analysis and interpretation
of gold ETFs in terms of the following factors
 Mean return
 Standard deviation(volatility)
 Skewness (normality)
 Kurtosis
 Coefficient of variation(c.v)
Mean return
Mean return is the average that represents the whole returns by one figure.
Higher themean, higher will be thereturn given by the ETF and vice versa. In
this study ranks are given to the ETFs on basis returns (higher the return
higher the rank)
Standard deviation (S.D) (volatility)

39
Standarddeviation is thesquareof the squareroot of themean of thesquareof
the deviations of all values of a series from their arithmetic mean. It is the
square root of the variance. It shows how much variation is there from the
mean return .lower thevolatility lower, better the ETF. Just likereturns we also
rank S.D (lower the volatility, higher the rank)
Skewness (normality)
Skewness measures degreeof normality in asset returns. Skewness coefficient
of zerodenotes thenormally distributed asset returns. Skewness coefficient of
greater than unity indicates extreme asymmetry. Skewness is said to be
positive (mean>mode) when thenumber of increases in the returns of ETFs is
less. Skewness is said to be negative (mean<mode) when the number of
increases in returns is high. Negative skewness is better for an ETF.
Kurtosis
Kurtosis indicates whether the returns is flat topped or peaked. When the
returns is more peaked than thenormalcurve(i.e.β>3) it is called lepto kurtic
that means, rangeof variation in the return is less or narrow. It is favorablefor
an investor. When the returns is more flat topped than the normal curve (i.e.
β<3) it is called platy kurtic that means, range of variation in the return is
high or wide.
Co-efficient of variation
It is a relative measureof dispersion which compares variability with averages.
It is usefulin analyzing pricevariation in asset market wherethe investors are
giving importance to both risk and return. The inverse of co-efficient of
variation shall give us the amount of return for every unit of risk element.

40
RETURN ANALYSIS
 COMPARISON OF ETFS IN TERMS OF DAILY RETURN IN THE YEAR
2010
2011
2012
2013
 COMPARISON OF ETFS IN TERMS OF OVERALL RETURN

41
TABLE.4.1.COMPARISON OF ETFS IN TERMS OF DAILY RETURN IN THE YEAR
2010
 In the year 2010 HDFCMFGETF gives highest return for investment.
ETFs RELIGAREGO, IPGETF, KOTAKGOLD, GOLDSHARE, and GOLDBEES
also give impressive return. But AXISGOLD gives less return compared
to others
VARIABLE MEAN RANK
HDFCMFGETF 0.115 1
RELIGAREGO 0.112 2
IPGETF 0.091 3
KOTAKGOLD 0.081 4
GOLDSHARE 0.081 4
GOLDBEES 0.081 4
SBIGET 0.08 5
QGOLDHALF 0.08 5
RELGOLD 0.08 5
AXISGOLD 0.064 6

42
2011
 In theyear 2011, QGOLDHALF hold rank first in terms of returns. Other
ETFs except IDBIGOLD gives almost same rate of return.
VARIABLE MEAN RANK
QGOLDHALF 0.143 1
BSLGOLDETF 0.126 2
SBIGET 0.114 3
RELGOLD 0.114 3
KOTAKGOLD 0.114 3
RELIGAREGO 0.113 4
HDFCMFGETF 0.111 5
GOLDBEES 0.111 5
AXISGOLD 0.111 5
GOLDSHARE 0.111 5
IPGETF 0.111 5
IDBIGOLD -0.203 6

43
2012
VARIABLE MEAN RANK
CRMFGETF 0.085 1
KOTAKGOLD 0.063 2
HDFCMFGETF 0.049 3
IPGETF 0.047 4
BSLGOLDETF 0.046 5
AXISGOLD 0.045 6
RELGOLD 0.044 7
GOLDSHARE 0.044 6
QGOLDHALF 0.044 6
GOLDBEES 0.043 7
MGOLD 0.043 7
IDBIGOLD 0.043 7
SBIGET 0.041 8
 In theyear 2012 CRMFGETF delivered more returns than all other ETFs
that given by in the group. This happened during the inception year of
the fund itself. Almost all other funds showed similar performance of
returns during that year.

44
2013
 In theyear 2013 was not promising for gold ETF investors in India. Only
four funds; IDBIGOLD, BSLGOLDETF & GOLDBEES & CRMFGETF
generated positivereturn which is in fact marginalonly. CRMFGETF
which was ranked first in the previous year made positive return even if
it was much less compared to that year.
VARIABLE MEAN RANK
IDBIGOLD 0.002 1
BSLGOLDETF 0.002 1
GOLDBEES 0.002 1
CRMFGETF 0.001 2
MGOLD -0.001 3
RELGOLD -0.001 3
RELIGAREGO -0.003 4
IPGETF -0.003 4
AXISGOLD -0.004 5
KOTAKGOLD -0.004 5
QGOLDHALF -0.004 5
HDFCMFGETF -0.004 5
SBIGET -0.005 6
GOLDSHARE -0.020 7

45
GRAPH.4.1.RETURN PERFORMANCE OF ETF SCHEMES: INDIVIDUAL VIEW
idbi IDBIGOLD ipgr IPGETF
bsl BSLGOLDETF axis AXISGOLD
goldbees GOLDBEES kotak KOTAKGOLD
crmf CRMFGETF qgold QGOLDHALF
mgold MGOLD hdfc HDFCMFGETF
rel RELGOLD sbi SBIGET
religar RELIGAREGO goldshare GOLDSHARE
-6
-4
-2
0
2
4
6
8
2011
sbi
-10
-8
-6
-4
-2
0
2
4
6
2011
gold
-10
-8
-6
-4
-2
0
2
4
6
2011
rel
-10
-8
-6
-4
-2
0
2
4
6
2011
religar
-8
-6
-4
-2
0
2
4
6
2011
qgold
-8
-6
-4
-2
0
2
4
2011
mgold
-8
-6
-4
-2
0
2
4
6
2011
kotak
-10
-8
-6
-4
-2
0
2
4
6
2011
ipgr
-8
-6
-4
-2
0
2
4
6
2011
idbi
-10
-8
-6
-4
-2
0
2
4
6
2011
hdfc
-8
-6
-4
-2
0
2
4
6
2011
goldshare
-10
-8
-6
-4
-2
0
2
4
6
2011
goldbees
-10
-8
-6
-4
-2
0
2
4
6
8
10
2011
crmf
-10
-8
-6
-4
-2
0
2
4
6
2011
axis
-8
-6
-4
-2
0
2
4
6
2011
bsl

46
TABLE.4.5.TABLE SHOWING MEAN, MEDIAN, MAXIMUM & MINIMUM
RETURNS OF ETFS FOR AN OVERALL PERIOD OF 4 YEARS
VARIABLE MEAN MEDIAN MINIMUM MAXIMUM
SBIGET 0.059 0.041 -5.849 7.088
RELIGAREGO 0.066 0.050 -9.156 5.321
RELGOLD 0.060 0.043 -8.942 4.200
QGOLDHALF 0.067 0.062 -6.788 4.449
MGOLD 0.019 0.038 -7.570 3.524
KOTAKGOLD 0.065 0.046 -7.946 4.073
IPGETF 0.057 0.040 -8.628 4.357
IDBIGOLD 0.010 0.015 -7.146 5.167
HDFCMFGETF 0.060 0.005 -9.371 5.949
GOLDSHARE 0.055 0.034 -7.895 5.149
GOLDBEES 0.061 0.067 -8.335 4.275
CRMFGETF 0.040 0.000 -8.146 8.491
AXISGOLD 0.053 0.028 -8.064 5.222
GOLDSHARE 0.050 0.000 -7.377 5.552
 Maximum rate of growth on daily basis (8.491) was made by
CRMFGETF during the four year study period of 2010-2014.Almost
same rate of decline in the asset return happened to almost all funds in
the growth. The rate of decline is comparatively less in SBIGET

47
TABLE.4.6. COMPARISON OF ETFS IN TERMS OF OVERALL RETURN
 When we consider all the period together QHALFGOLD proved to be
most profitable investment schemes to ETF investment in India.
RELIGAREGO & KOTAKGOLD also have delivered return at that scale.
MGOLD & IDBIGOLD found least performing asset during the period.
VARIABLE MEAN RANK
QGOLDHALF 0.067 1
RELIGAREGO 0.066 2
KOTAKGOLD 0.065 3
GOLDBEES 0.061 4
HDFCMFGETF 0.060 5
RELGOLD 0.060 6
SBIGET 0.059 7
IPGETF 0.057 8
GOLDSHARE 0.055 9
AXISGOLD 0.053 10
GOLDSHARE 0.050 11
CRMFGETF 0.040 12
MGOLD 0.019 13
IDBIGOLD 0.010 14

48
GRAPH.4.2.RETURN PEFORMANCE OF GOLD ETFS IN INDIA: OVERALL VIEW
-10
-8
-6
-4
-2
0
2
4
6
8
10
2010 2011 2012 2013
sbi
gold
rel
religar
qgold
mgold
kotak
ipgr
idbi
hdfc
goldshare
goldbees
crmf
axis
bsl

49
VOLATILITY ANALYSIS
 COMPARISON OF ETFS IN TERMS OF DAILY RETURN VOLATILITY
IN THE YEAR 2010
IN THE YEAR 2011
IN THE YEAR 2012
IN THE YEAR 2013
 COMPARISON OF ETFS IN TERMS OF OVERALL RETURN VOLATILITY

50
TABLE.4.7.COMPARISON OF ETFS IN TERMS OF DAILY RETURN VOLATILITY
IN THE YEAR 2010
 In the year 2010 returns of AXISGOLD is less volatile (even if it gives
medium returns) compared other ETFs. So it is more dependable for an
investor. During the year RELIGAREGO was the most volatile ETF
VARIABLE STD. DEV. RANK
AXISGOLD 0.700 1
IPGETF 0.706 2
HDFCMFGETF 0.718 3
QGOLDHALF 0.799 4
KOTAKGOLD 0.810 5
GOLDSHARE 0.811 6
RELGOLD 0.830 7
GOLDBEES 0.843 8
SBIGET 0.849 9
RELIGAREGO 0.943 10

51
IN THE YEAR 2011
 Compared to 2010, more return volatility was visible in 2011. In that
year IDBIGOLD has produced consistent results for the
investment.BSLGOLDETF is the most volatile ETF during the year.
IDBIGOLD 1.021 1
QGOLDHALF 1.161 2
AXISGOLD 1.173 3
GOLDSHARE 1.195 4
RELGOLD 1.201 5
KOTAKGOLD 1.203 6
GOLDBEES 1.208 7
RELIGAREGO 1.211 8
HDFCMFGETF 1.237 9
IPGETF 1.262 10
SBIGET 1.267 11
BSLGOLDETF 1.615 12

52
IN THE YEAR 2012
 In theyear 2012 the rank of GOLDSHARE in terms of consistency is 1.
Even though CRMFGETF gives high return from the day of its origin, its
asset returns are highly volatile. GOLDSHARE maintained previous
position in terms of risk performance.
GOLDSHARE 0.588 1
RELGOLD 0.667 2
MGOLD 0.668 3
QGOLDHALF 0.679 4
AXISGOLD 0.686 5
SBIGET 0.688 6
GOLDBEES 0.690 7
HDFCMFGETF 0.696 8
IPGETF 0.723 9
RELIGAREGO 0.734 10
IDBIGOLD 0.746 11
KOTAKGOLD 0.756 12
BSLGOLDETF 0.794 13
CRMFGETF 1.690 14

53
TABLE.4.10.COMPARISONOF ETFS IN TERMS OF DAILY RETURN VOLATILITY
IN THE YEAR 2013
 The pattern of volatility shown by gold ETF in India during the year
2013 was akin to that of in 2012.ButGOLDSHARE was able to maintain
its position as in previous year of 2012. This year also CRMFGETF
showed more volatility in its performance
GOLDSHARE 1.097 1
SBIGET 1.105 2
AXISGOLD 1.136 3
KOTAKGOLD 1.154 4
GOLDBEES 1.173 5
HDFCMFGETF 1.176 6
QGOLDHALF 1.178 7
MGOLD 1.222 8
RELGOLD 1.229 9
IDBIGOLD 1.257 10
RELIGAREGO 1.268 11
IPGETF 1.333 12
BSLGOLDETF 1.429 13
CRMFGETF 1.558 14

54
TABLE.4.11.COMPARISON OF ETFS IN TERMS OF OVERALL RETURN
VOLATILITY
 In the overall period comparison GOLDSHARE has maintained more
stability in producing return.QHALFGOLD& KOTAKGOLD are also less
volatile compared to other funds. So thesefunds are more beloved to risk
averters. CRMFGETF was the most risky investment scheme to investors
in India.
GOLDSHARE 0.948 1
QGOLDHALF 0.972 2
KOTAKGOLD 0.995 3
GOLDBEES 0.996 4
SBIGET 0.998 5
RELGOLD 1.003 6
AXISGOLD 1.006 7
MGOLD 1.007 8
IDBIGOLD 1.021 9
HDFCMFGETF 1.026 10
RELIGAREGO 1.060 11
IPGETF 1.094 12
GOLDSHARE 1.272 13
CRMFGETF 1.619 14

55
NORMALITY ANALYSIS
 COMPARISON OF ETFS IN TERMS OF DAILY NORMALITY IN
DISTRIBUTION OF DAILY RETURN (2009-2010)
 COMPARISON OF ETFS IN TERMS OF OVERALL NORMALITY IN
OVERALL RETURNS

56
TABLE.4.12.COMPARISON OF ETFS IN TERMS OF DAILY NORMALITY IN
DISTRIBUTION OF DAILY RETURN (2009- 2010)
VARIABLE SKEWNESS
QGOLDHALF -0.319
GOLDSHARE -0.309
IPGETF -0.134
GOLDBEES -0.119
KOTAKGOLD -0.093
RELIGAREGO -0.001
RELGOLD 0.202
SBIGET 0.247
HDFCMFGETF 0.299
AXISGOLD 0.649
 In the year 2010, the return distributions of majority of ETFs are
negatively skewed, i.e. number of increases in their return is greater
than their decreases. The return profile of only 4 ETFs (RELGOLD,
SBIGET, HDFCMFGETF, AXISGOLD are positively skewed. i.e. the
number of their increases is less compared to decreases. The return of
RELIGAREGO was found almost normal during the year.

57
 In the year 2011, all ETFs except SBIGET were negatively skewed.
During theyear strong bullish movement is quite evident in Indian ETF
market.
VARIABLE SKEWNESS
KOTAKGOLD -0.699
QGOLDHALF -0.619
BSLGOLDETF -0.613
IPGETF -0.552
GOLDBEES -0.492
IDBIGOLD -0.456
RELGOLD -0.337
GOLDSHARE -0.334
RELIGAREGO -0.222
AXISGOLD -0.185
HDFCMFGETF -0.089
SBIGET 0.224

58
 The year 2012 found less fortunateto the investors because most of the
ETFs were positively skewed. CRMFGETF was issued for the first time
during the period of that year; naturally its skewnes was high when
compared to others. More decreases in asset prices were handicapped
during that year, which might be due to the revival of the investor
confidencewith the performance of financial market across the world.
VARIABLE SKEWNESS
GOLDBEES -0.285
QGOLDHALF -0.248
IPGETF -0.200
RELGOLD -0.198
SBIGET -0.195
GOLDSHARE -0.067
IDBIGOLD 0.122
AXISGOLD 0.129
BSLGOLDETF 0.161
HDFCMFGETF 0.200
KOTAKGOLD 0.461
MGOLD 0.499
RELIGAREGO 0.593
CRMFGETF 1.361

59
TABLE.4.15. COMPARISON OF ETFS IN TERMS OF DAILY NORMALITY IN
 In 2013, theincreases outnumber thedeclines significantly .henceagain
skewnes co-efficient found negativein respect of all the schemes under
the study. while comparing table 4.15 with table 4.14we can say that
thedecreases was larger in magnitudeon account of which the average
return became marginal
VARIABLE SKEWNESS
HDFCMFGETF -1.756
RELGOLD -1.587
GOLDBEES -1.460
RELIGAREGO -1.382
KOTAKGOLD -1.319
GOLDSHARE -1.304
AXISGOLD -1.201
MGOLD -0.948
IPGETF -0.776
CRMFGETF -0.681
IDBIGOLD -0.641
QGOLDHALF -0.472
SBIGET -0.341
BSLGOLDETF -0.198

60
TABLE.4.16.COMPARISON OF ETFS IN TERMS OF OVERALL NORMALITY IN
OVERALL RETURNS
 As an aggregate of 4 years are considered, returns of most of the ETFs
showed large number of increases in their returns, but
SBIGET&CRMFGETF showed thepositive skewnes. So the two companies
could make larger increases than that made by other companies in the
group.
variable Skewness
MGOLD -0.8869
GOLDBEES -0.8107
RELGOLD -0.8099
KOTAKGOLD -0.7515
HDFCMFGETF -0.7494
GOLDSHARE -0.6832
IPGETF -0.6803
RELIGAREGO -0.6222
AXISGOLD -0.5829
IDBIGOLD -0.5631
QGOLDHALF -0.5182
GOLDSHARE -0.3688
SBIGET 0.04788
CRMFGETF 0.39898

61
KURTOSIS ANALYSIS
 PERFOMANCE OF ETF-MEASURE OF KURTOSIS(2009-2010)
 PERFOMANCE OF ETFS DURING THE OVERALL PERIOD

62
TABLE.4.17. PERFOMANCE OF ETF-MEASURE OF KURTOSIS (2009-2010)
 In the year 2010 returns from all the ETFs were platy kurtic (β<3) i.e.
the returns variation is wide. This might have put the investors in
dilemma of whether to invest or not in gold or gold ETFs.
VARIABLE
EX.
KURTOSIS
AXISGOLD 0.300
IPGETF 0.607
RELIGAREGO 0.832
HDFCMFGETF 0.835
QGOLDHALF 0.969
KOTAKGOLD 1.121
RELGOLD 1.203
GOLDBEES 1.436
SBIGET 1.537
GOLDSHARE 1.554

63
 In the year 2011 all ETFs except IDBIGOLD is lepto kurtic (β>3) i.e.
their returns varied relatively in narrow range. Among them SBIGET
was more trustworthy even though it gave less returns
VARIABLE
EX.
KURTOSIS
IDBIGOLD 1.955
RELGOLD 4.731
AXISGOLD 4.867
RELIGAREGO 5.172
BSLGOLDETF 5.419
GOLDBEES 5.451
IPGETF 5.870
HDFCMFGETF 6.045
KOTAKGOLD 6.148
GOLDSHARE 6.689
QGOLDHALF 6.974
SBIGET 7.309

64
 In the year 2012 returns of KOTAKGOLD and CRMFGETF were lepto
kurtic and others were platy kurtic. Return profile of CRMGETF found
extreme leptokurticwhich added further its variability and riskiness of
the investments.
VARIABLE
EX.
KURTOSIS
BSLGOLDETF 0.378
GOLDSHARE 0.794
HDFCMFGETF 0.889
AXISGOLD 0.960
IDBIGOLD 1.016
IPGETF 1.155
MGOLD 1.457
SBIGET 1.875
RELIGAREGO 2.114
QGOLDHALF 2.167
RELGOLD 2.445
GOLDBEES 2.851
KOTAKGOLD 4.443
CRMFGETF 7.089

65
 In 2013,thereturndistribution of only one fund found platykurtic .this
statisticalproperty of all other funds are just reverse of it and extremity
in this regard was quiteevident in most of the cases . so that year is also
more risky for gold ETF investors of the country
VARIABLE EX.
KURTOSIS
BSLGOLDETF 2.104
CRMFGETF 4.422
SBIGET 5.221
QGOLDHALF 5.864
IDBIGOLD 6.062
MGOLD 6.319
IPGETF 7.497
KOTAKGOLD 9.783
GOLDBEES 10.801
RELIGAREGO 11.442
AXISGOLD 11.521
GOLDSHARE 11.874
RELGOLD 12.280
HDFCMFGETF 17.305

66
TABLE.4.21.PERFOMANCE OF ETF DURING OVERALL PERIOD
 As the overall period is considered, the returns of all ETFS were lepto
kurtic. So the variations in their returns were thinly separated. Such a
thin spread is not much surprising as the study has used prices data.
VARIABLE
EX.
KURTOSIS
BSLGOLDETF 5.3241
CRMFGETF 6.0392
IDBIGOLD 7.1756
QGOLDHALF 7.2607
SBIGET 7.5414
MGOLD 8.4234
KOTAKGOLD 8.4315
IPGETF 8.5774
GOLDBEES 8.7363
RELIGAREGO 8.9067
AXISGOLD 9.2081
RELGOLD 9.8826
GOLDSHARE 10.204
HDFCMFGETF 12.988

67
RISK -RETURN
COMPARATIVE ANALYSIS
 COMPARISON OF ETFS IN TERMS OF RISK RETURN
PERFOMANCE

68
TABLE.4.22.COMPARISONOF ETFS IN TERMS OF OVERALL CO-EFFICIENT OF
VARIATION
 The result of risk return compositeanalysis which havebeen reported in
table4.22.showsthatQGOLDHALF,KOTAKGOLD,RELIGAREGO,GOLDBEE
S,RELGOLDdelivered better return per unit of risk assumed by the ETF
investors in thecountry. In this regard the relative efficiency of ETF like
IDBIGOLDand MGOLDin producingreturnat par with the level of risk
assumed by the investors found weak. The performance of CRMFGETF,
themaximum return delivering ETF among the group is also found not
outstanding in this respect.
VARIABLE
RETURN-RISK
RATIO
IDBIGOLD 0.010
MGOLD 0.019
CRMFGETF 0.025
GOLDSHARE 0.039
IPGETF 0.052
AXISGOLD 0.052
GOLDSHARE 0.058
HDFCMFGETF 0.059
SBIGET 0.059
RELGOLD 0.060
GOLDBEES 0.061
RELIGAREGO 0.062
KOTAKGOLD 0.065
QGOLDHALF 0.069

69
COMPARISON OF GOLD
EXCHANGE TRADED FUNDS
AND PHYSICAL GOLD
PERFOMANCE
 COMPARISON OF ETFS & GOLD IN TERMS OF OVERALL RETURN
 COMPARISON OF ETFS & GOLD IN TERMS OF OVERALL VOLATILITY


70
TABLE.4.23.COMPARISONOF ETFS & GOLD IN TERMS OF OVERALL RETURN
 The comparison between return performance of gold ETFs with the
pricemovement of theyellow metal, gold, in the spot market shed light
on the operationalefficiency of gold ETFs in producing theextra returns
to the investors. All the 14 funds selected for the study out beat gold in
terms of return performance. Excess return over return from gold spot
market clearly indicates the asset management efficiency of ETF
companies in India is significantly high. Therefore they can make
superior return through wise market diversification strategies.
VARIABLE
MEAN ETF-
GOLD RANKETF GOLD
CRMFGETF 0.040 -0.087 0.127 1
MGOLD 0.019 -0.065 0.084 2
IDBIGOLD 0.010 -0.068 0.078 3
GOLDSHARE 0.050 -0.028 0.077 4
AXISGOLD 0.053 -0.008 0.061 5
HDFCMFGETF 0.060 0.006 0.054 6
IPGETF 0.057 0.004 0.053 7
QGOLDHALF 0.067 0.016 0.051 8
RELIGAREGO 0.066 0.015 0.050 9
KOTAKGOLD 0.065 0.016 0.049 10
GOLDBEES 0.061 0.016 0.045 11
RELGOLD 0.060 0.016 0.045 12
SBIGET 0.059 0.016 0.043 13
GOLDSHARE 0.055 0.016 0.040 14

71
TABLE.4.24.COMPARISON OF ETFS & GOLD IN TERMS OF OVERALL
VOLATILITY
 While comparing volatility of gold ETF prices with gold spot market
prices, it is quite obvious that gold ETF investments are less risky for
investors. Only CRMFGETF is investors is an exception to this which is
more due to the period of its transaction. It is one the funds which
introduced only two year back when the prices of gold market become
more volatile than before.
The superior performance o gold ETF with gold investment in the country
substantiate that this financial innovation satisfies all categories of
investors-risk averter, risk lover and risk neutral alike.
VARIABLE
STD. DEV. ETF-
GOLD
RANK
ETF GOLD
GOLDSHARE 0.948 1.194 -0.246 1
AXISGOLD 1.006 1.243 -0.237 2
QGOLDHALF 0.972 1.194 -0.221 3
MGOLD 1.007 1.228 -0.220 4
IDBIGOLD 1.021 1.233 -0.212 5
KOTAKGOLD 0.995 1.194 -0.199 6
HDFCMFGETF 1.026 1.224 -0.198 7
GOLDBEES 0.996 1.194 -0.197 8
SBIGET 0.998 1.194 -0.196 9
RELGOLD 1.003 1.194 -0.191 10
IPGETF 1.094 1.230 -0.136 11
RELIGAREGO 1.060 1.194 -0.134 12
GOLDSHARE 1.272 1.303 -0.031 13
CRMFGETF 1.619 1.264 0.355 14

72
FINDINGS OF THE STUDY
 In the year 2010 HDFCMFGETF gives highest return for investment.
ETFs RELIGAREGO, IPGETF, KOTAKGOLD, GOLDSHARE, and GOLDBEES
also give impressive return. But AXISGOLD gives less return compared
to others
 In theyear 2011, QGOLDHALF hold rank first in terms of returns. Other
ETFs except IDBIGOLD gives almost same rate of return.
 In theyear 2012 CRMFGETF delivered more returns than all other ETFs
that given by in the group. This happened during the inception year of
the fund itself. Almost all other funds showed similar performance of
returns during that year.
 In theyear 2013 was not promising for gold ETF investors in India. Only
four funds; IDBIGOLD, BSLGOLDETF & GOLDBEES & CRMFGETF
generated positivereturn which is in fact marginalonly. CRMFGETF
which was ranked first in the previous year made positive return even if
it was much less compared to that year.
 Maximum rate of growth on daily basis (8.491) was made by
CRMFGETF during the four year study period of 2010-2014.Almost
same rate of decline in the asset return happened to almost all funds in
the growth. The rate of decline is comparatively less in SBIGET

73
 When we consider all the period together QHALFGOLD proved to be
most profitable investment schemes to ETF investment in India.
RELIGAREGO & KOTAKGOLD also have delivered return at that scale.
MGOLD & IDBIGOLD found least performing asset during the period
 In the year 2010 returns of AXISGOLD is less volatile (even if it gives
medium returns) compared other ETFs. So it is more dependable for an
investor. During the year RELIGAREGO was the most volatile ETF
 Compared to 2010, more return volatility was visible in 2011. In that
year IDBIGOLD has produced consistent results for the
investment.BSLGOLDETF is the most volatile ETF during the year.
 In theyear 2012 the rank of GOLDSHARE in terms of consistency is 1.
Even though CRMFGETF gives high return from the day of its origin, its
asset returns are highly volatile. GOLDSHARE maintained previous
position in terms of risk performance.
 The pattern of volatility shown by gold ETF in India during the year
2013 was akin to that of in 2012.ButGOLDSHARE was able to maintain
its position as in previous year of 2012. This year also CRMFGETF
showed more volatility in its performance
 In the overall period comparison GOLDSHARE has maintained more
stability in producing return.QHALFGOLD& KOTAKGOLD are also less
volatile compared to other funds. So thesefunds are more beloved to risk
averters. CRMFGETF was the most risky investment scheme to investors
in India.

74
 In the year 2010, the return distributions of majority of ETFs are
negatively skewed, i.e. number of increases in their return is greater
than their decreases. The return profile of only 4 ETFs (RELGOLD,
SBIGET, HDFCMFGETF, AXISGOLD are positively skewed. i.e. the
number of their increases is less compared to decreases. The return of
RELIGAREGO was found almost normal during the year.
 In the year 2011, all ETFs except SBIGET were negatively skewed.
During theyear strong bullish movement is quite evident in Indian ETF
market.
 The year 2012 found less fortunateto the investors because most of the
ETFs were positively skewed. CRMFGETF was issued for the first time
during the period of that year; naturally its skewnes was high when
compared to others. More decreases in asset prices were handicapped
during that year, which might be due to the revival of the investor
confidencewith the performance of financial market across the world.
 In 2013, theincreases outnumber thedeclines significantly .henceagain
skewnes co-efficient found negativein respect of all the schemes under
the study. while comparing table 4.15 with table 4.14we can say that
thedecreases was larger in magnitudeon account of which the average
return became marginal
 As an aggregate of 4 years are considered, returns of most of the ETFs
showed large number of increases in their returns, but
SBIGET&CRMFGETF showed thepositive skewnes. So the two companies

75
could make larger increases than that made by other companies in the
group.
 In the year 2010 returns from all the ETFs were platy kurtic (β<3) i.e.
the returns variation is wide. This might have put the investors in
dilemma of whether to invest or not in gold or gold ETFs.
 In the year 2011 all ETFs except IDBIGOLD is lepto kurtic (β>3) i.e.
their returns varied relatively in narrow range. Among them SBIGET
was more trustworthy even though it gave less returns
 In the year 2012 returns of KOTAKGOLD and CRMFGETF were lepto
kurtic and others were platy kurtic. Return profile of CRMGETF found
extreme leptokurticwhich added further its variability and riskiness of
the investments.
 In 2013,thereturndistribution of only one fund found platykurtic .this
statisticalproperty of all other funds are just reverse of it and extremity
in this regard was quiteevident in most of the cases . so that year is also
more risky for gold ETF investors of the country
 As the overall period is considered, the returns of all ETFS were lepto
kurtic. So the variations in their returns were thinly separated. Such a
thin spread is not much surprising as the study has used prices data.
 The result of risk return compositeanalysis which havebeen reported in
table4.22.showsthatQGOLDHALF,KOTAKGOLD,RELIGAREGO,GOLDBEE
S,RELGOLDdelivered better return per unit of risk assumed by the ETF
investors in thecountry. In this regard the relative efficiency of ETF like

76
IDBIGOLDand MGOLDin producingreturnat par with the level of risk
assumed by the investors found weak. The performance of CRMFGETF,
themaximum return delivering ETF among the group is also found not
outstanding in this respect.
 The comparison between return performance of gold ETFs with the
pricemovement of theyellow metal, gold, in the spot market shed light
on the operationalefficiency of gold ETFs in producing theextra returns
to the investors. All the 14 funds selected for the study out beat gold in
terms of return performance. Excess return over return from gold spot
market clearly indicates the asset management efficiency of ETF
companies in India is significantly high. Therefore they can make
superior return through wise market diversification strategies.
 While comparing volatility of gold ETF prices with gold spot market
prices, it is quite obvious that gold ETF investments are less risky for
investors. Only CRMFGETF is investors is an exception to this which is
more due to the period of its transaction. It is one the funds which
introduced only two year back when the prices of gold market become
more volatile than before.

77
SUGGESTIONS OF STUDY
 The investor awareness programmes should be conducted by
organizations concerned to build awareness among investors. The
Association of Mutual Fund in India (AMFI) has initiated a programme
under which each fund house needs to organize at least five investor
awareness programmes every month.
 The RBI should consider theunit of Gold ETF as a pledge, so the investors
can avail loans from the banks. Gold ETFs turn out to be a safe
investment option for investors to hedge their assets against the
uncertain global market scenario.
 Risk is unavoidable by an investor. Risk is unpredictable. But still some
measures can be undertaken. Risk will be predicted by using risk metrics
like standard deviation which is often practiced by investors. So, the
investors must watch carefully the ongoing trade and volume to
minimize risk.
 Measures should be taken to widen the scope of gold ETFs for the
welfare safety and gain of the investors
 Introduce and popularize ETFs in other metals too like silver, platinum
etc. in order to develop ETF market in India

78
CONCLUSION
Gold ETFs offer investors a convenient way and means of investing in gold as a
Security withoutthehassles of storageand safety concerns arising due to it. It
also spares theinvestors from worrying about thepurity and quality of gold. It
also provides various other benefits such as electronic trading and Demat
storage and providing a means to diversify one’s investment portfolio. From
this study a lot of facts were discovered that almost all the gold ETFs
demonstrate an incredible performance in the ETF market and were giving
more returns thanthephysical gold. This study successfully proved that gold
ETFs are more profitable, less volatile, negatively skewed and narrowly varied
in nature that give maximum promotion to the investors than physical gold

79
BIBLIOGRAPHY
 Book Reference
 Securities Analysis and portfolio management (sixth edition) (2002)
Donald.E.F.Fischer and Ronald.J.Jordan, prenticehall of India private
limited
 Investment analysis and portfolio management (2002) Prasanna
Chandra, Tata McGraw-Hill publishing company limited
 Fundamentals’ of investment (2012), Dr.Inderpal Singh, kalyani
publishers
 Portfolio management, (1st
revised edition) ,(2008) Samir.K.Barua,
V.Ragunathan,Jayanth.R.Verma, Tata McGraw-Hillpublishingcompany
limited
 Security Analysis and Portfolio Management (2001) ,Punithavathy
Pandian,Vikas Publishing House Pvt Ltd
 Investment Management, V.A. Avadhani
 Investment Management ,V.K .Bhalla
 Investment Analysis & Portfolio Management, Dr. Kevin
 Indian Banking, K.C Sekhar

80
 Website reference
 www.nseindia.com
 www.rbiindia.com
 www.moneycontrol.com
 www.wikipedia.com
 www.reserachmethodologies.com
 www.universalwealthcreation.com
 www.inversebooks.com
 www.forbes.com
 www.financialexpress.com
 www.investmenteconomics.com
THANK YOU……………

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