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The IUP Journal of Management Research :
Performance of Some Select Gold Exchange Traded Funds of Banks and Non-Banking Financial Companies in India
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Stock markets worldwide had passed through a very hard time from 2008 to 2012. During this time the yellow metal, i.e., gold (physical gold, gold Exchange Traded Fund (ETF)) had given very handsome returns to their investors, more than any other option of investments. This memorable past encouraged the investors to select the gold as safest and indispensable part of their investment portfolio. In this paper, an attempt has been made to evaluate the performance of ten select gold ETFs (five banking gold ETFs and five non-banking financing companiesí gold ETFs) by analyzing their returns, total risk, systematic risk and risk return relationship to meet the expectation of investors by providing handsome returns in recent times. It may be concluded from the study that the comparative performance of gold ETFs of non-banking financing companies are better than their counterpart.

 
 

Exchange Traded Funds (ETFs) are open-ended funds that trade on a stock exchange just like the shares of an individual company. Unlike the shares of a company, each unit of an ETF represents a portfolio of stocks. So it is similar to a unit of an open-ended mutual fund but with a big difference. The difference between an ETF and an open-ended mutual fund is that the units of an ETF trade on an exchange. So the investor can trade in the ETF during market hours and the units can be sold short or margined just like shares. Gold ETFs are ETFs that are meant to track closely the price of physical gold. So gold ETF lets us own gold in our demat account. Each unit of the ETF lets the investor own 1gm of gold without physically owning it. Thus investing in a gold ETF provides the benefit of liquidity and marketability which are a limitation of owning physical gold. Gold ETF is liquid because we can trade in it at any time during market hours. Gold ETF is marketable because we can trade any amount in it just like a normal stock including short selling and buying on margin. Owning gold ETF also is cheaper than owning physical gold because it has no cost of carry (the cost of storing physical gold).

 
 

Management Research Journal,gold (physical gold, gold Exchange Traded Fund (ETF)) , Evolution of Gold ETFs in India, Banks and Non-Banking Financial Companies in India.