piyush prestation 03

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  • 8/6/2019 piyush prestation 03


    Summer Internship Project

    Topic: A Study on Gold ETFs

    Presented to: Presented by:

    Dr.Jyotsna Haran Piyush Rathi

    (Associate Professor) PGP-1

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    A Gold ETF is a unique type of exchange-traded fund that tracks the priceof gold. Gold exchange-traded funds are traded on the major stockexchanges including New York, London, Zurich, Paris and Mumbai.

    The first gold exchange-traded fund was start in March 2003 on theAustralian Stock Exchange under Gold Bullion Securities (ticker symbol

    "GOLD"). Gold Bullion Securities (GBS) are fully backed by gold which isboth deposited and insured.

    The chairman of ETF Securities Ltd, Graham Tuckwell, developed theworlds first Gold ETF in Australia and London in 2003. ETF Securities Ltdalso launched the world's first Oil exchange traded commodity in 2005followed by an entire platform of exchange traded commodities whichwere listed on the London Stock Exchange in 2006. He is also a registeredrepresentative of ALPS Distributors Inc.


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    Exchange Traded Fund (ETFs) are mutual fund units which investorsbuy/sell from the stock exchange, as against a normal mutual fundunit, where the investor buys/sells through a distributor or directlyfrom the AMC.

    Gold ETFs provided investors a mean of participating in the goldbullion market without the necessity of taking physical delivery ofgold & to buy or sell that participation through the trading of unitson stock exchange.

    Gold ETFs are mutual fund schemes that invest in standard goldbullion (99.5% purity). They are special types of exchange tradedfunds (ETFs) which tracks the prices of gold (i.e. whose value isbased on price of gold) and are convenient and inexpensivealternative to owning physical gold.

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    Gold ETFs in India

    It is a very recent development that the market regulator SEBI

    allowed Gold Exchange Traded Funds (ETFs) in India. The thought of

    Gold ETF was first officially conceptualized by Benchmark Asset

    Management Company in India, where they filed a proposal with

    the SEBI in May 2002. However, it has not received regulatoryapproval and was launched later in 2007. Benchmark Mutual Fund

    launched India's first Gold ETF on 15 February followed by UTI

    Mutual Fund's Gold scheme on 1 March 2007.

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    Turnover of each class of ETF

    April 2011

    Gold 32689.17 43.65%

    Money Market 26329.83 35.16%

    Equity Market 15844.24 21.16%

    International Equity Market 18.29 .02%

    Total 74881.53 100%

    Source: www.nseindia.com & www.amfindia.com

    Through table it clearly shown that the highest turnover is in Gold.

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    What are ETFs?

    Exchange traded funds are mutual funds which you can buy and sell

    in the stock market, just like any other stocks or shares. This as far

    as investment is concerned an exchange traded fund is just a

    mutual fund and as far as buying or selling the mutual fund is

    concerned, an exchange traded fund is just like a stock or equitywhich you can trade on stock exchange like NSE.

    Source: http://niftyprediction.blogspot.com/2008/09/etfs-in-india-all-those-bees-on-nse.html

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    What is Gold ETFs? Gold ETFs enable investors to purchase and sell shares of a mutual

    fund whose primary asset is gold. These funds are listed on thestock exchanges, i.e., can be bought or sold like other stocks orshares. But one needs to have a de-mat account and a share tradingaccount to invest in gold ETFs. The unit size in a gold ETF is as smallas one gram of gold equivalents.

    Source: http://www.mutualfundetf.info/etf-investments/what-is-gold-etf-can-anybody-teach-how-to-invest-in-gold-etf/

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    Features of Gold ETF

    Exchange Traded Fund are open ended mutual funds that are

    passively managed and most of them seek to mirror the return of

    an index, a commodity of assets. ETFs are listed and traded on stock

    exchanges like stocks.

    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 participation through the trading of a

    security of stock exchange. Gold ETF would be a passive

    investment; so, when gold prices move up, the ETF appreciates and

    when gold prices move down, the ETF losses value.

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    List of Gold ETFs in India with symbol

    HDFC Gold Exchange Traded Fund (HDFCMFGETF) ICICI Prudential Gold Exchange Traded Fund (IPGETF) KOTAK GOLD ETF (KOTAK)

    Quantum Gold Fund (QGOLDHALF) Reliance Gold Exchange Traded Fund (RELGOLD) Religare Gold Exchange Traded Fund (RELIGAREGO) SBI GOLD EXCHANGE TRADED SCHEME (SBIGTS) UTI GOLD Exchange Traded Fund (GOLDSHARE) Gold Benchmark Exchange Traded Scheme (Gold BEES) Axis Gold ETF (AXISGOLD)

    Source: http://www.goldetf-funds.com/gold-etfs-list-%E2%80%93-gold-etf-funds-list-in-india

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    Average Daily turnover (in laces)









    Among 10 Gold ETFs the top 3 gold ETF contributed 83.62%of the

    total trading volumes during the April 2011.The total trading volume for this month was Rs.32689.19 laces &

    the top 3 securities were GOLDBEES, KOTAKGOLD & GOLDSHARE.

    Source: www.nseindia.com

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    Advantages of Gold ETFs

    Lower cost

    Buying & selling flexibility

    Continuous, Intraday pricing

    Access to indicators & Indexes

    Diversity in investment opportunities



    Resale value

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    Key benefits of Gold ETF


    We can buy just 1 unit ,it is easy to buy

    Buy it unit by unit as we want & built wealth


    You can assured of quality

    De-mat holding allows security


    Accepted as colaterals for loan

    You can trust on purity

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    To find out the awareness of the Gold ETF

    among investors & to ascertain the investment

    behavior towards Gold ETF.

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    Research Methodology

    Research Design:- Descriptive Research

    Research Approach:- Qualitative & Quantitative

    Sample Design:- Simple Random Sampling

    Sample Size:- 96

    Data Collectiona.) Primary Data:- The primary data was collected from the samplethrough sample survey with the help ofquestionnaires & personalinterview with people.

    b.)Secondary Data:- The secondary data is taken from

    websites, magazines & CD. Confidence Level:- 95%

    Confidence Interval:- 5%

    Period of Study:- 1 May 2011-30 Jun 2011

    Data Analysis

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    Findings 96 respondents only 5 persons not having de-mat a/c.

    There investment decision mostly on expert comment (42%) &advisor/broker (28%).

    Respondents track the market mostly through newspaper (36%) &internet (32%).

    60% of people invest 10 to 30% saving in stock market.

    46% of people investing there money, they prefer companyreputation.

    54 people out of 96 not aware about Gold ETF.

    23% of people invested in Gold ETF.

    69% of people want to invest in Gold ETF by direct investment.

    38% of people mentality while investing in Gold ETF is for futureuncertainty.

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    64% of people know Gold ETF by internet & newspaper.

    27% of people have good knowledge about Gold ETF.

    35% of people attract from the feature future planning in investing

    in Gold ETF.

    Majority of the investors have lack awareness & knowledge about

    investment opportunities in Gold ETF schemes offered by various


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    AMCs should take steps to increase customer awareness regarding

    Gold ETF scheme investment options & the benefits of investing in


    Broking firms should also take steps to increase customer

    awareness with investor education & other awareness campaigns

    through advertising in newspaper, internet& other advertisement


    Investors investing in gold should diversify portfolio in Gold ETF

    instead of investing in physical gold.

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    The sample size is small as compared to the number of investors

    present in India does not include investor of other geographical


    Majority of the investors who invest in gold prefer physical gold

    instead of Gold ETF.

    Majority of investors & trader are not aware about the concept of

    Gold ETF.

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    Conclusion Gold ETFs offer investor a convenient way, investing in gold as a

    security without the hassles of storage & safety.

    It also provides various other benefits such as E-trading & De-matstorage facility.

    India is the world's biggest consumer of gold, consuming 700-800

    tones annually, the majority of which is used for jewellery. GoldETFs are expected to be popular as investment-led buying for goldhas pushed aside some of the demand for gold jewellery. Buying

    jewellery as an investment in gold can be expensive as charges inthe form of making, storage and other services tend to increase the

    cost, while Gold-ETFs can be an effective invest tool to help onebuild significant wealth over time.

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    www.nsegold .com



    http://www.goldetf-funds.com/gold-etfs-list-%E2%80%93-gold-etf-funds- list- in-india


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