A Comparative Analysis Between Gold Etf’s And Nifty50-A Selected Gold Etf’s In India

Abstract

Over the years, investment in gold ETFs as an alternative investment to physical gold has increased. Generally, gold, gold ETF and gold mutual funds are considered as alternative investments to the socks and shares and hence the returns on these investments should closely follow the returns on the stocks. In other words, it is usually expected that there should not be any major difference in returns on the investment avenues.  The current study is undertaken to analyse the risk and returns of five selected God ETF's and compare with Nifty50 during 2015-19. In overall, the correlation coefficient is found to be negative for three Gold ETF’s (i.e. AxisGold, HDFCMFGETF and GoldShare) which is 60 percent and positive for the remaining two Gold ETF’s (i.e. IDBIGold and KotakGold) which is 40 percent. Hence, it is concluded that though returns of some of the gold ETFs fall in line with the returns on the stocks but returns on majority of the gold ETFs do not closely follow the returns on the stocks. The investors are advised to include gold ETFs in the portfolio of the stocks to diversify