Gold ETF Research Articles

Testing the Hedging Effectiveness of Gold Derivative Market in India

The purpose of this article is to estimate the hedging effectiveness of the Indian Gold Derivative Market from both the statistics of Static hedge methodology of Vector Error Correction Method and Time-Varying hedge methodology of DVEC-GARCH, covering the time span of 1st April 2005 till 31st March 2019, to account for any difference existence in both. The study is conducted to judge the performance of gold futures as a tool of risk management. The result reveals the fact that hedging effectiveness from both the methodologies are found to be 35%. The reason behind low hedging efficiency might be due to the fact that gold itself is used as a hedge instrument and always in demand by the Indian investors for varied reasons as well as its accessibility in various forms (Gold ETFs and Gold Bonds issued by Government). The hedgers’ participation may be less as compared to speculators with respect gold future hedging. The results of phase-wise analysis, that is, before crisis (2005–2007), the hedging efficiency comes out to be 26%, during the crisis (2008–2012) 38.7% and after the crisis (2013–2018) 40% from both the static and dynamic hedge ratio models. The results showed that with the outbreak of Global Financial crisis in 2007–2009 and European debt crisis in 2010–2012 and thereafter, gold futures are increasing use as a risk management tool, but still at a minimal level.

INVESTOR BUYING BEHAVIOR TOWARDS GOLD INVESTMENT: A DESCRIPTIVE STUDY

This descriptive study explores investor behavior and perceptions regarding gold investment, examining factors that influence investment decisions and future outlook. Data collected from 80 respondents in Hissar, Haryana city, reveals a high level of awareness among younger individuals and females. While traditional forms of gold investment, particularly physical gold, remain popular, there is a growing interest in modern options like Gold ETFs and derivatives. Factors such as protection against inflation, historical performance, and the perception of gold as a safe investment play pivotal roles in investment choices. Most respondents believe in the continued value of gold as an investment, emphasizing its enduring appeal. However, the hypothesis of a positive correlation between perceiving gold as a safe-haven asset and belief in its future value was not supported

Beyond the Bling: Demystifying the Surge in India's Gold ETF Market

Beyond the Bling: Demystifying the Surge in India's Gold ETF Market

Dynamic return connectedness between commodities and travel & leisure ETFs: Investment strategies and portfolio implications

Examining return connectedness between the largest US-based oil and gold ETFs and three major travel & leisure ETFs, we provide substantial value for understanding how investors can diversify sectoral risk. We also compare several portfolio strategies to explore interactive effects. Results indicate a high level of interdependence between gold, oil and the examined ETFs, where the minimum variance portfolio (MVP) is found to be the most efficient. Robustness testing reaffirms the finding that the gold ETF is an important portfolio rebalancing tool to specifically minimise risks associated with travel-related ETFs. Our results have important implications for investors and portfolio managers.

Examining factors influencing investment in Digital Gold and Gold ETF using the PCA technique

Digital Gold and Gold Exchange Traded Fund have emerged as an electronic option for investment in gold in India. The purpose of this study is to determine influential factors forming the perception and level of awareness of individuals toward investing in Digital Gold and Gold Exchange Traded Fund, and also analyze the relationship among these influential factors. Data for this quantitative analysis were obtained from a self-administered 5-point Likert questionnaire of 158 respondents who are individual investors investing in either Digital Gold or Gold Exchange Traded Fund to achieve the objectives of the study. Principal Component Analysis has been adapted as a dimension reduction technique to identify the factors impacting the decision of investing in Gold Exchange Traded Fund and Digital Gold. The factors that induce investors to invest in Digital Gold and Gold Exchange Traded Fund as identified in this study are conduciveness, security, and ease of accessibility. The factors that compel investors not to invest in Digital Gold and Gold ETFs are lack of contentment, operational challenges, lack of awareness, brokerage expenses, and infeasibility. The results disclosed that variables such as lack of satisfaction and lack of knowledge have higher factor loadings of 0.997, which indicates that investors are required to be more educated about the Digital Gold and Gold Exchange Traded Fund. Securities and Exchange Board of India, Reserve Bank of India and other regulatory authorities in India may consider regulation of Digital Gold so that it can be accepted as a trustworthy source of investment.

Portfolio Optimization Analysis in American Industry

Portfolio optimization, as a process of reorganizing investment and dispersing risks by considering the established target return and risk tolerance, is widely used in the financial field. This paper analyzes the asset allocation of six kinds of assets. It uses three methods, namely, mean-variance analysis, CAPM, and the FF3F model, to optimize the investment portfolio. At the same time, the proportion of assets in the portfolio should be considered under the conditions of maximizing the return or minimizing the risk at a specific risk level. The results show that in the mean-variance model, the AEP and Gold ETF have the most considerable weight in the combination of maximum Sharpe ratio and minimum variance, respectively. In the FF3F model, AT&T and Gold ETF have the most prominent weight in the combination of maximum Sharpe ratio and minimum variance, while in CAPM, Google and Gold ETF have the most significant weight in the combination of maximum Sharpe ratio and minimum variance respectively. This research may help potential investors interested in power, communication, science and technology, gold, and automobile industries.

Gold As Investable Commodity-An Inquiry

This paper examines potential benefits of investing in various gold investment vehicles in terms of risk and return from a typical South African investor’s perspective. Furthermore, the study examines the relationship between gold price and South African macroeconomic variables. Data used in the study comprises of monthly closing share price data of JSE listed gold mining companies, gold price, Krugerrand coin, New Gold ETF, FTSE/JSE all share index, gold mining index, unit trust index (gold & precious metals), real GDP, rand/dollar exchange rate, repo rate and CPI. It was found that gold bullion produced superior abnormal returns and yielded greater capital growth compared to the JSE all share index. However, the JSE all share index exhibit lower volatility compared to gold bullion. Abnormal returns for JSE listed gold mining companies tend to differ substantially from gold bullion abnormal returns. Gold mining companies exhibit added risk which cannot be attributed to the gold bullion. Gold has a potential to reduce systematic risk when added to a portfolio of stocks. A multiple regression model was estimated which relates gold price to South African macroeconomic variables. It was found that gold price depends on real GDP and rand/dollar exchange rate.

Economic and Financial Determinants of Gold ETF Price Volatility on the U.S. Futures Market (COMEX)

Economic and Financial Determinants of Gold ETF Price Volatility on the U.S. Futures Market (COMEX)

Analysis of Gold Exchange Traded Funds With reference to Net worth Stock Broking LTD

This paper is a study of the performance of Gold ETFs in India. An exchange traded fund (“ETF”) is a form of securities that tracks an index, sector, commodity, or other asset and may be bought and sold on a stock exchange much like a regular stock. An ETF can be set up to track anything from a single commodity's price to a huge and diverse group of securities. ETFs can even be built to follow certain investment strategies. The need and scope of the study is India is the world's largest gold-consuming country. China, on the other side, has the world's fastest-growing economy. The need and scope of the Both India and China are in the process of liberalizing restrictions governing the import and selling of gold in order to facilitate massive gold purchases. In India, online commodity trading is relatively new compared to the stock market. Online commodities trading is dominated by four exchanges: Multi Commodity Exchange of India Limited (“MCX”), National Commodity & Derivatives Exchange Limited (“NCDEX”), National Board of Trade (“NBOT”), and National Multi-Commodity Exchange of India Limited (“NMCE”). As a result, the study scope of the commodities market is relatively broad in the market, which is mostly focused on gold. An analysis is carried out using performance evaluation techniques such as Standard Deviation (“STDV”), Variance, Covariance, Correlation and BETA value. Data for this study have been collected from 2017 to 2021. This research enable market analysts and investors who find the best outlook in the Gold ETF’s.

An Empirical Analysis of Alternative Gold Investment Strategies and Their Influence on India's Economic Growth

The contemporary international gold market is a kaleidoscope of change and expansion. The amount of gold purchased annually has nearly tripled since the early 1970s, and gold markets around the world have thrived. Gold has emotive, social, and monetary worth, and it is purchased for multiple and diverse reasons by individuals all over the world, typically affected by nationwide social and cultural fundamentals, home country market conditions, and macroeconomic causes. Different areas of the gold market develop at diverse periods all through the global financial cycle due to the multiple uses of gold – in technology, ornaments, by investors, and central banks as well. Gold's features as an asset for investment are bolstered by the diversity of gold demand in terms of the various alternatives within the gold investment. In India, gold is regarded as one of the most alluring, lucrative, and popular investment choices. Gold is an indispensable component of the socio-economic lives of both the affluent and the poor, and it is a chief source of savings for the low- and middle-income families in both rural and municipal areas. Not only does gold play a significant role in India's cultural zeitgeist, but it also plays a significant role in the economy. This profound relation with gold may be seen not just in terms of tradition, but also in terms of economics. In recent years, gold has become more significant than merely for socio-cultural reasons, and it has earned a position in global financial portfolios. Therefore, this paper discusses gold investment and the factors that influence gold investments in physical forms. Gold has a variety of economic effects, one of which is the influence of gold imports on the balance of payments' trade balance and current account. As a result, the main emphasis of this paper is on examining alternate ways of investing in gold and researching the motives for doing so. Lastly, the paper attempts to investigate the impact of alternative gold investment products (paper/digital gold) by discussing the 'Financialization of Gold', which involves investing in gold-backed financial products that are not held in physical form, resulting in the transformation of the gold market and ecosystem. This study puts forth an analysis of comparison gold alternatives (Gold ETF and Sovereign Gold Bonds) and physical gold by looking at the returns and pricing, requirement, and import quantities of physical gold Keywords: Gold investment, Gold Exchange Traded Fund (Gold ETF), gold mutual funds, Sovereign Gold Bond (SGB), digital/e-gold, bullion investment, Economic Growth.

An Analysis of the Millennial Generation's Understanding of the Sovereign Gold Bond, A Key Long-Term Gold Instrument for the Indian Economy

India is the world’s second largestgold consumer (≈800 tons), yet the country’s inability to produce enough gold has resulted in a hefty gold import bill. With the rise in Imports, India began to experience Current Account Deficit. AfterSeveral failures,GoI launched two Innovative Scheme: TheGold Monetization Scheme and the Sovereign Gold Bond. RBI issues Sovereign Gold Bonds through various authorized intermediaries at gold price. This Bond has immense future growth and it’s a win-win situation for both investors and the Indian Economy. Thepresent study examines the Compounded Annual Growth Rate (CAGR) of five gold investment avenues, namely Physical Gold (Bullion, Jewelry), Gold ETFs, Digital Gold and Sovereign Gold Bond, to identify high-yielding investments under different gold schemes.It also examines the Millennial Generations’understanding of Sovereign Gold Bondsparticularly in the state of Odisha. The findings of this research will be beneficial to all stakeholders those who are contemplating gold as hedging asset/profitable investment. Keyword: Gold, Sovereign Gold Bond, CAGR, Odisha State, Indian Economy

A STUDY ON THE IMPACT OF COVID – 19 ON INVESTOR BEHAVIOUR TOWARDS GOLD ETF INVESTMENTS IN INDIA

The hyperbolic discounting dimensions of investment decisions in gold exchange traded funds do not appear in the existing literature and no study has been conducted with a focus on gold exchange traded funds to understand the impact of time inconsistency on the investment decision in a gold exchange traded investment. This study is exploring the impact of behavioral factors on investment decisions in gold ETFs during the pandemic situation. Hence, this study has relevance in terms of analyzing and determining the hyperbolic investor behavior for investment in gold ETFs. Research helps to understand the impact of hyperbolic discounts on gold ETF investment decisions understand the impact of behavioural elements on gold ETF investment decisions. Research can provide insight into reasonable and illogical patterns of Investor behaviour influencing investment decisions.

A Study on Performance Evaluation of Gold Exchange Traded Funds in India: Pre & Post Covid Scenario

For centuries, Indians have had a strong affinity for gold. However, it was only in the year 2007 when India launched its first gold ETF (Gold BeES). The underlying asset of these ETFs is gold. Also, gold ETFs give you exposure to the Indian gold market. Gold Exchange Traded Funds, or Gold ETFs, are open-ended mutual fund schemes based on the ever-fluctuating cost of gold. Physical gold, on the other hand, does not generate an income. Also, the making charges on physical gold are high. Gold ETFs give investors exposure to the gold market. They are an excellent choice of investment for investors looking to beat inflation in the long run.

A Study on the Association between Awareness of Investors and Demographic Factors towards Gold ETFs, Gold Bonds, and Gold Deposits

Gold is one of the valuable metals and an important asset class for investors. People in India are emotionally attached to gold. Thousands of tonnes of idle gold are lying with Indian temples, trusts, and individuals. Investors consider capital appreciation; interest income and safety are major factors that influence buying of gold [1][4][7]. India is one of the biggest importers of gold every year. The government of India has introduced a few gold-related schemes to reduce gold imports. Sovereign gold bond [2] scheme and Re-vamped gold deposit scheme are introduced in the year 2015 under the Swarna Bharath initiative [9]. The present study is an attempt to find the association between awareness of investors and demographic factors towards gold ETFs, gold bonds, and gold deposits. The results reveal that there is a significant association at a 5% significance level between awareness of investors and all demographic factors used in the study except the gender of the respondent.

Impact of Nifty Bees on Select Gold Exchange Funds with Reference to NSE India

The growth of exchange traded funds in India is in ascent stage. Investors who cont take the advantage with direct investments they can take the ETF’S help. The investment spectrum of ETF’S is increasing day by day. In this study how sectorial indices are affecting the ETF’S for the period of 2016 to 2021. The study measured the relationship of select Gold ETFs with the Nifty BeES by applying the vector error correction model. The study result reveals that all the selected ETFs are having the significant relationship with the Nifty BeES. The Ordinary least square method has been used to know the impact of Nifty BeES on the select Gold ETFs and observed that all the Gold ETFs are having the significant impact by the benchmark of NSE India Nifty BeES. This paper is useful to the investors of ETF, mutual funds and regulators of the capital market.

The Gold Exposure of Institutional Investors

What is the optimal weight of gold in an investment portfolio? Suggestions range from 0% to more than 20%, but there is no study that systematically investigates this issue. We analyze the gold holdings (gold ETFs) of institutional investors based on 13-F filings and find that 30% of all institutions have at least some exposure to gold in their portfolio, with an average percentage holding of 1.7% with large differences across institutions and over time. The results further identify key determinants of gold holdings and demonstrate that gold holdings positively affect the performance of institutional investor portfolios.

Volatility Forecasting of China Silver Futures: the Contributions of Chinese Investor Sentiment and CBOE Gold and Silver ETF Volatility Indices

This paper is to detect the role of CBOE gold ETF volatility index (GVZ), CBOE silver ETF volatility index (VXSLV), and constructed Chinese investor sentiment (CnSENT) on the volatility forecasting of China silver futures over daily, weekly and monthly horizons. Different types of HAR models and ridge regression models are utilized to do the analysis, and the out-of-sample R-square statistics and different rolling window sizes are used to ensure the robustness of the conclusion. The empirical results suggest that GVZ and VXSLV have the explanatory power on the China silver futures. Particularly, VXSLV has a better performance than GVZ. However, the predictive power of CnSENT is doubtful as some results indicate that it cannot improve the prediction accuracy. Additionally, the ridge regression method does not achieve a better result than all types of HAR models.

Gold Demand Across Countries

This paper analyzes the demand for jewelry, bars & coins, and gold ETFs across high-income and middle-income countries. We employ a simultaneous equations model that allows a joint determination of the various categories of gold demand and find significant differences across gold demand categories and across countries. Jewelry and bars & coins demand are positively related in middle-income countries but unrelated in high-income countries. Jewelry demand is negatively related to gold prices in middle-income countries but not in high-income countries. Bars and coins demand positively reacts to global risk (VIX) in high-income countries but not in middle-income countries. The findings indicate that not all gold is equal and serves different purposes in different countries. Gold is generally more integrated with financial markets in high-income countries than in middle-income countries and jewelry is the least integrated among the three categories of gold demand.

A study of factors influencing investor behaviour towards gold as an investment avenue with factor analysis

Gold has been a major investment avenue among investors. Investor behaviour varies on the basis of their needs, benefits return expectations etc towards various investment avenues. Every investment avenue has different pros and cons. Gold has some special benefits as an investment option. It is quite popular traditionally as well as for financial security purposes. In Indian context people used to buy gold in form of jewellery on festivals, marriages etc. Earlier jewellery was considered as the most common form of gold investment but now a days more options are available in the form of Gold investment like Gold Bars, Gold ETFs, SGBs etc. This paper is an attempt to explore various factors which influence the investor behaviour towards Gold investment by factor analysis.

Gold Investment - Perception & Preference of Consumers

Gold is a precious commodity and most popular as an investment in India. There are religious and sentimental values in buying gold. This study is conducted to evaluate the perception of consumers for investing in gold in India. The paper also aims to study the different modes of investment in gold. Primary research was conducted to know the perceptions of respondents. Survey was done to know about the awareness of options for investment in physical gold and the most preferred gold investment and gold fund. The survey shows that many people are aware of gold ETFs. 72 percent respondents perceive gold as a risk free investment, 43 percent invest in gold funds while 36 percent respondents invest in physical gold. SBI Gold fund is the most preferred fund followed by HDFC Gold Fund. The analysis shows that people invest primarily for returns. Other reasons for investment in gold are safety and liquidity. Investment can be made in physical gold, Gold ETFs and E-Gold, Gold Monetisation Scheme, Gold Sovereign Bonds and Gold Mutual Funds.