Investors’ Perspicacity of Risk Associated with Gold Exchange Traded Fund in India
Investors’ Perspicacity of Risk Associated with Gold Exchange Traded Fund in India

Summary/Abstract: In India, Gold is a preferred asset for its liquidity and appreciation in value. It can also be used against inflation and this glittering metal provides stable returns and easy marketability to the investors. Though conventional investment options like jewellery, gold bars and coins still exist, the people also prefer GETF. Gold Exchange Traded Funds (GETF) is another effective way to invest in the yellow metal and it is safest investment than all others. Primary data were collected from the investors who are already trading in equity shares and Gold ETFs and the secondary data were collected from NSE website for ranking the companies based on their NAVs and offers gold exchange traded fund (GETF). The investors’ behaviour on GETF is analysed by using tools like percentage analysis and Chi – Square Test. The study has also focused on the risk associated with return based on the Beta value and risk measuring tools like Sharpe ratio, Treynor ratio and Jensen – Alpha Measure. From the analysis, it is found that the investors are willing to purchase gold in the form of jewels, gold bars and others from retailers only, even though they are not much aware about the purity and other risks involved in the same. When purchasing gold in the form of jewels, gold bars, the investors may lose their value for money at the time of purchase and also during exchange. The investors who invest their money in gold for their future purposes are willing to invest in GETF. Finally, it is concluded that the investors may invest in GETF for their additional investment with the mutual fund companies which offers this type scheme by creating proper awareness about GETF to the investors.

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