Final Report

ON

Management Thesis-I

“A Critical analysis of the Potentials and Awareness level of floated Gold Exchange Traded Fund in Indian context with special reference to

Nagpur city”

SUBMITTED IN FULFILLMENTOF

MASTER OF BUSINESS ADMINISTRATIONICFAI UNIVERSITY, DEHRADUN

SUBMITTED TO:Ms. Chandrima Das

(Project Guide)

SUBMITTED BY:Mr. Shailesh PatilEnroll: 8NBNG041

ACKNOWLEDGEMENT

Before getting in the thick of the things, I would like to add a few heartfelt

words for the people who were part of this project in numerous ways. People

who gave unending support right from the stage the ideas were conceived.

It is with profound gratitude that I express my sincere thanks to ICFAI

UNIVERSITY for designing “Management Thesis” as a part of MBA

program and giving me the opportunity of expressing practical aspects.

Finally, heartfelt appreciations to my Project Guide, Ms. Chandrima Das

for coordinating project work and giving me guidelines to make me delve

deeper and deeper in this project by offering her timely help. I owe more

than what I can mention mostly for teaching me to see the silver lining in

every dark cloud.

Shailesh Patil 8NBNG041

2

DECLARATION

I, Mr. Shailesh Patil, the student of MBA course 2008-10 of INC, Nagpur,

hereby submit my “Final Report- Management Thesis”. Most of the work

carried out in this project is original and was done under the guidance of

Project Guide, Ms. Chandrima Das. A good amount of textual content in

this project is derived from other works published earlier. However, this

material that has been picked up has been used to enhance the clarity of the

hypothesis and has been used for an academic purpose only.

I further assert that this project or any part of it has never been submitted by

me or anyone else to any university in the world. Also no part of this project

may be used or reproduced by others either academically or commercially

without the written consent of the authors and their guide.

Shailesh Patil

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CERTIFICATE

Shailesh Patil, have worked on the “Final Report- Management Thesis”.

It has been my pleasure to guide her on this project. After going through the

work presented in this project, I can vouch for the authenticity and

genuineness of the hard work put in by her. She have been meticulously

methodical, diligent and relatively intelligent with the research work. I

strongly recommend this project as a genuine piece of research on a topic

not so very common. I would like to take this opportunity to wish her all the

best for the future.

Signature

Ms. Chandrima Das

(Project Guide)

4

INDEX

5

ABSTRACT

6

Introduction

Exchange Traded Funds (ETFs) are open ended mutual funds that are passively managed and most of them seek to mirror the return of an index, a commodity or a basket of assets. ETFs are listed and traded on stock exchanges like stocks. They enable investors to gain broad exposure to indices or defined underlying asset (commodity) with relative case, on a real-time basis, and at a lower cost than many other forms of investing.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 on 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 loses value.Gold ETF tracks the performance of Gold Bullion. Gold ETFs provide returns that, before expenses, closely correspond to the returns provided by physical Gold. Each unit is approximately equal to the price of 1 gram of Gold. But, there are Gold ETFs which also provide a unit which is approximately equal to the price of ½ gram of Gold

Why should an investor invest in Gold ETF? No worry on adulteration Gold provides diversification to the portfolio Gold is considered as a Global Asset Class Gold is used as a Hedge against Inflation Gold is considered to be less volatile compared to equities Held in Electronic Form Store of value Extremely Liquid

Advantages of Investing in Gold ETFs Potentially cheaper to have price exposure to gold price as compared to other

available avenues Quick and convenient dealing through demat account No storage and security issue for investors Transparent pricing Taxation of Mutual Fund Can be traded on stock exchange like buying / selling a stock Ideal for retail investor as minimum lot size to trade is one unit on secondary

market NAV of a unit will track price of approximately 1 gram of gold

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Comparison of Gold ETF with Physical Gold

Parameter Jewelers Bank Gold ETF

How Gold is held Physical (Bars / Coins)Physical (Bars /

Coins)Dematerialized (Electronic Form)

Pricing

Differs from one to another. Neither transparent nor

standard.

Differs from bank to bank. Not Standard.

Linked to International Gold Prices and very transparent.

Buying Premium above gold price

Likely to be more Likely to be more Likely to be less

Making Charges Charges are incurred Charges are incurred No Charges are incurred

Impurity Risk High Nil Nil

Storage Requirement

Locker / Safe Locker / Safe Demat Account

Security of Asset Investor is responsibleInvestor is responsible

Fund House takes the responsibility

ResaleConditional and uneconomical

Banks do not buy back

At Secondary Market Prices

Convenience in Buying / Selling

Less convenient, as Gold needs to be moved physically

Less convenient, as Gold needs to be moved physically

More Convenient, as held in electronic form under the demat account

Quantity to Buy / Sell

Available in standard denomination

Available in standard denomination

Minimum is ½ or 1 gram according to the fund

Bid Ask Spread Very High Can’t Sell Back Very Low

Risk of Theft Yes, possible Yes, possible No, Not possible

Wealth Tax Yes Yes No

Long Term Capital Gains Tax

Only after 3 years Only after 3 years After 1 year

Source- Gold Exchange Traded Fund - EquityBulls_com.htm

8

Chapter Gold ETF Funds in India

1. Benchmark Gold ETF (GOLDBEES) lists on NSE

Benchmark Assent Management Company, a Mumbai-based mutual fund house, has listed India's first gold exchange traded fund (EFT) Gold BeES on the National Stock Exchange Feb 07. Listed at rs. 950 per gram BoES soon gained momentum with price surged to Rs 1104 but slumped due to profit booking to Rs 947 within an hour of the launch. Allotment price, however, remained at Rs 945.7 per gram. 

The trading unit for BeES has been fixed at one gram with a tick size of one paisa. This instrument offers only trading and holding it in DMAT account and not the physical delivery of gold. "Gold BeES, like any other mutual fund instrument, would attract common men to save in small quantity with a minimum possible monthly balance of Rs 1000 (roughly equivalent to the price of one gram gold BoES) which, if continued, may accumulate over a period of time to give handsome amount on the occasions like daughter's wedding or higher education of their child," A P Kurian, chairman, AMFI said.

He further added that the New Year was adding a new benchmark in the history of mutual funds with the addition of BeES to the securities portfolio. Looking at the success of gold exchange traded funds in the countries like the US, South Africa and Australia which has created an asset of about $12 billion, this production in India is all set to attract good amount of retail participation from the common man, Kurian said.     

Gold BeES is designed to provide returns that, before expenses, closely correspond to the returns provided by physical Gold. Each unit is approximately equal to the price of 1 gram of Gold.

Entry Load Slabs will be as below:

Rs. 10,000 to Rs. 49,99,000 - 1.5% Rs. 50,00,000 to Rs. 1,99,99,000 - 1.0% Rs 2,00,00,000 to Rs 4,99,99,000 - 0.5% Rs. 5,00,00,000 and above - Nil

There will be no exit load charge by the Fund The total expense ratio will be maximum of 1% per annum. Since Gold BeES is classified under Mutual Fund, investor investing in this need not pay Wealth Tax. The scheme will have Non equity Mutual Fund taxation, applicable as per current Tax laws, which investor has to pay after redemption.

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2. UTI GOLD Exchange Traded Fund

UTI Gold Exchange Traded Fund is an open ended exchange traded fund. The investment objective of the scheme is to endeavor to provide returns that, before expenses, closely track the performance and yield of Gold. However the performance of the scheme may differ from that of the underlying asset due to tracking error.

Issue Open  01-Mar-2007 Issue Close  16-Mar-2007

Scheme Objective

Mutual Fund Family UTI Asset Mgmt Company Pvt. Ltd.

Fund Class Gold

Fund Type Open-Ended

Investment plan Dividend

Fund Manager Swati Kulkarni

Entry Load 0.00 %

Exit Load 0.00 %

Comment None

A gold ETF was eagerly awaited by US investors. Now, there are two to choose from. One is IAU from Barclay's Global Investors. The other is GLD from State Street.State Street's started trading first and has managed to capture a larger slice of the market. In February, the GLD ETF held $6 billion worth of assets. However, both should be equivalent bets for those looking to invest in gold. In its first three days of trading, GLD traded roughly 30 million shares and nearly all of that has been a new buyer if you believe the press.I, for one, am not interested in holding too much of this particular asset class. Why? Because gold has no real use in the world. Sure, it is admired and hoarded by people across the globe, but it doesn't generate value on its own. Warren Buffet said it best, "I would rather own assets that produce value. Dow went from 66 to 12000 and paid dividends. If you owned Gold you paid 20 and went to 400 a hundred years later."However some investors are attracted since gold is likely to increase in value when other areas of the market are suffering. As such, it is used as hedge against other investments. Regardless, I prefer to invest in the long-term returns that company stocks and bonds offer. This isn’t to say that I don’t own any gold. In fact, the commodities ETF that have is 10% gold.Note that gains from the gold ETF will be taxed at the collectibles rate of 28% vs. the long-term capital gains rate of 15%. If you're going to invest in this ETF, you might want to consider using a tax deferred account. And since gold doesn't produce income, partial shares of your holdings will be sold to pay for management fees.

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3. Kotak Gold Exchange Traded Fund

Investment Objective: the investment objective of the scheme is to generate returns that are in line with the return on investment in physical gold, subject to tracking errors.

Type of fund: Kotak Gold ETF is open ended fund. The ongoing of the scheme commenced from August 8, 2007. The fund creates/redeem the scheme units in large size known as creation unit. The value of unit is 1000 gram of physical gold or multiple thereof called as the portfolio deposit and a cash component which will be exchanged for corresponding number of units. The portfolio deposit and cash component may change from time to time and will be announced by fund on its website.

Issue Open  01-july-2007 Issue Close  08-Aug-2007

Scheme Objective

Mutual Fund Family Kotak mahindra Asset Mgmt Company Pvt. Ltd.

Fund Class Gold

Fund Type Open-Ended

Investment plan Dividend

Fund Manager Mr. Abhishek Bisen

Entry Load 0.00 %

Exit Load 0.00 %

Comment None

Indemnity is a legal exemption from the penalties or liabilities incurred by any course of

action. Some of the risk factors listed in the prospectus are · the loss, damage, theft or

restrictions on access to the Trust's gold · the lack of adequate sources of recovery if the

Trust's gold is lost, damaged, stolen or destroyed, including a lack of insurance · the

failure of gold bullion allocated to the Trust to meet the London Good Delivery Standards

· the failure of sub-custodians to exercise due care in the safekeeping of the Trust's gold ·

the limited ability of the Trustee and the Custodian to take legal action against sub-

custodians; · the insolvency of the Custodian · the Trust's obligation to reimburse the

Purchaser and the Market Agent for certain liabilities in the event the Sponsor fails to

indemnify them · the lack of experience of the Sponsor and its management in operating

an investment vehicle such as the Trust · competing claims over ownership of intellectual

property rights related to the Trust.

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4. Reliance Gold Exchange Traded Fund.

Reliance Gold Exchange Traded Fund (RGETF) is an open ended Gold Exchange Traded Fund which will track the performance of Gold Bullion. The units issued under the scheme will represent the value of gold held in the scheme. It is designed to provide returns that, before expenses, closely correspond to the returns provided by domestic price of Gold. Gold ETF is a security listed on the stock exchange available for trading with an intention to offer investors a means of participating in the gold bullion market without the necessity of taking physical delivery of gold.

Product FeaturesType: An open-ended Gold Exchange Traded Fund that tracks the domestic prices of gold through investments in physical Gold.

Investment Objective: The investment objective is to seek to provide returns that closely correspond to returns provided by price of gold through investment in physical Gold (and Gold related securities as permitted by Regulators from time to time). However, the performance of the scheme may differ from that of the domestic prices of Gold due to expenses and or other related factors.

Options: Only Dividend Pay-out Option

Minimum Application AmountOn going purchase directly from mutual fund would be available only to the Authorized Participants provided the value of units to be purchased is in creation unit size. Authorized Participants may buy the units on any business day for the scheme directly from the mutual fund at applicable NAV and transaction charges, if applicable, by depositing Gold or cash, value of which is equal to creation size. Each creation unit consists of 1000 units and cash components, if any, of Reliance Gold Exchange Traded Fund. RGETF units will be credited to the unit holders demat account on the date of realization of instrument, at the applicable NAV. The AMC will appoint Authorized Participants to provide liquidity in secondary market on an ongoing basis. The Authorized Participants would offer daily two way quote in the market.

Modes of payment for subscriptions & redemptions during NFO & continuous offer with the AMCDuring NFO all the subscriptions will happen by cash (by issuing a cheque / DD) however during continuous offer the transactions with the AMC by Authorized Participants & Large Investors can happen by issuing a cheque / DD or by transferring requisite gold (as per LBMA Good Delivery Norms referred in the Offer Document) to the fund’s Designated DP account (in the form of Portfolio Deposit) while the balance Cash Component, if any has to be paid to the AMC. Please refer to the offer Document for further details.

Allotment PriceAllotment price will be equal to the face value of Rs100/- plus premium equivalent to the difference between the face value and price of one gram of gold on the date of allotment.

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For example :If on the date of allotment the price of 10 gm of gold is 9000, then the allotment price becomes as follows; Rs 100 + premium equivalent to the difference between the face value and price of one gram of gold on the date of allotment. i.e Rs 100 + Rs (900-100) = Rs 900 approx (The above example is for illustration purpose and does not include the expenses of the scheme)

Purity of GoldAll gold bullion held in the scheme’s allocated account with the custodian shall be of fineness (or purity) of 995 parts per 1000 (99.5%) or higher.

Load Structure: During NFO and Continuous Offer Entry Load:  Less than Rs. 1 lacs - 

1.50%

Rs. 1 lacs & less than Rs. 25 lacs 

0.75%

Rs. 25 lacs & less than Rs. 50 lacs 

0.50%

Rs. 25 lacs & less than Rs. 1 crs 

0.25%

Rs 50 lacs & less than Rs 1cr 

0.25% & NOT Rs 25 lacs & less..

Entry Load: NilDuring continuous offer: Entry & Exit Load: NIL

Listing: The Fund would endeavor to get the units of the Scheme listed on the National Stock Exchange and / or any other stock exchange(s) as may be decided by the AMC within 30 days from the closure of the New Fund Offer period.

Liquidity : After the close of the NFO, as RGETF would be listed on the Exchange, subsequent buying or selling by Unit holders can be made from the secondary market. The minimum number of Units that can be bought or sold on the exchange is 1 (one) unit. All investors including Authorised Participants and large investors may sell their units in the stock exchange(s) on which these units are listed on all the trading days of the stock exchange. The trading will be as per the normal settlement cycle. Alternatively, Authorised Participants and Large investors can directly buy / sell Units in blocks from the Fund in ‘Creation Unit’ size, as defined in this Offer Document on all working days. Mutual fund will repurchase units from Authorised Participants and Large investors on any business day provided the units offered for repurchase is not less than 100 units.

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5. Quantum Gold Exchange Traded Fund

The Quantum Gold Fund (QGF) seeks to offer investors an innovative, cost-efficient and secure way to invest in gold. The QGF is an Open Ended Fund, which is listed on the National Stock Exchange (NSE) in the form of an Exchange Traded Fund (ETF) tracking domestic prices of gold. The scheme enables investors to participate in the gold bullion market without taking physical delivery of gold, and to buy and sell units just like a stock on any of the recognized exchanges where it is listed..

Investment ObjectiveThe investment objective of the Quantum Gold Fund is to provide returns that, before expenses, closely correspond to the returns provided by the domestic price of gold.

Scheme DetailsEach unit of the QGF will be approximately equal to price of half (½) gram of Gold. In the New Fund Offer (NFO) period, the Fund will accept cheque or demand draft. The minimum amount of investment is Rs.5,000/- and in multiples of Rs.1,000/- thereafter. After the NFO, the QGF units are listed on the NSE and investors can buy or sell units just like any equity share. Investors can buy or sell QGF units through member-brokers on the NSE. The minimum quantity for buying and selling would be at least 1 unit.

Ongoing Sales/RedemptionOn an ongoing basis (after the NFO), direct purchases from the Fund would be restricted to only Authorized Participants and Eligible Investors. Authorised Participants and Eligible Investors can buy/redeem in creation unit size and multiples thereof directly from the Fund on all business days. Retail investors can buy and sell only on the exchange

Creation Unit Size‘Creation Unit Size’ is the number of QGF units, which is exchanged for the Portfolio Deposit and cash component. The Portfolio Deposit shall consist of physical gold of defined purity and quantity, and the cash component represents the difference between the applicable NAV of units in creation unit size and the market value of physical Gold. The facility of creating/redeeming units in creation unit size will be available only for the Authorized Participants and large or eligible investors as defined in the Scheme Information Document. The Fund may from time to time change the size of the creation unit size in order to equate it with marketable lots of the underlying instruments. Through the lower cost of operations and the availability of units having smaller denominations, the Quantum Gold Fund would provide investors an excellent means of asset allocation. Thus, an investor can buy gold in unit form, with each unit being approximately equal to ½ gram of Gold, for as low as around Rs. 600 per unit at the current prices. (As on January 9th, 2008) Gold ETFs offer the best of both worlds. The investor has the advantages of owning physical gold, without incurring additional expenses and losses like making charges (for gold jewellery), and bank vault charges (for keeping coins or bars or jewellery). If investors purchased gold from the retail jeweller or a bank, it would have cost at least a straight loss to the extent of the premium paid (which usually ranges from 5 to 20%). And there are no concerns of quality or theft– The gold backing the ETF is certified by the London Bullion Market Association and stored in vaults of the custodian / sub-custodians. The fund house takes care of all risks of storage and safety. Buying and selling is very easy. Like any other security, you just buy and sell

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it though your broker on the stock exchanges. And unlike your jeweler and bank, you do not suffer premiums or making charges in the transactions. About the Quantum Gold Fund. The Quantum Gold Fund is an Open Ended Exchange Traded Fund (ETF) launched by Quantum Mutual Fund and listed on the NSE. It will track domestic prices of Gold through investments in physical Gold. How to purchase and sell Quantum Gold Fund units.

The Quantum Gold Fund Highlights

Minimum Investments Rs 5,000 (multiples of 1000)

Minimum target amount during initial offer period Rs. 10 Lacs

Face value per unit Rs. 100/-

Entry and Exit Load structure

Entry Load Entry Load Nil

Exit Load Authorized Participants Nil

Exit Load Eligible Investors 0.50%

The load structure is however, subject to change from time to time and such changes shall be implemented prospectively.

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RESEARCH METHODOLOGY

Secondary Data

I. SKEWNESS

Skewness describe asymmetry from the normal distribution in a set of statistical data. Skewness can come in the form of "negative skewness" or "positive skewness", depending on whether data points are skewed to the left (negative skew) or to the right (positive skew) of the data average.   Negative skew: The left tail is longer; the mass of the distribution is concentrated on the right of the figure. It has relatively few low values. The distribution is said to be left-skewed. Positive skew: The right tail is longer; the mass of the distribution is concentrated on the left of the figure. It has relatively few high values. The distribution is said to be right-skewed.

Source- Skewness - Wikipedia, the free encyclopedia.htm

Skewness is extremely important to finance and investing. Most sets of data, including stock prices and asset returns, have either positive or negative skew rather than following the balanced normal distribution (which has a skewness of zero). By knowing which way data is skewed, one can better estimate whether a given (or future) data point will be more or less than the mean .Most advanced economic analysis models study data for skewness and incorporate this into their calculations. Skewness risk is the risk that a model assumes a normal distribution of data when in fact data is skewed to the left or right of the mean

For univariate data Y1, Y2, ..., YN, the formula for skewness is:

Where is the mean, is the standard deviation, and N is the number of data points. The skewness for a normal distribution is zero, and any symmetric data should have a skewness near zero.. By skewed left, we mean that the left tail is long relative to the right

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tail. Similarly,skewed right means that the right tail is long relative to the left tail. Some measurements have a lower bound and are skewed right.

TABLE- 1.1

Month Benchmark UTI Kotak Reliance QuantamNAV NAV NAV NAV NAV

Mar-07 945.4541Apr-07 940.4872 937.3458May-07 893.4265 893.6763Jun-07 876.1564 877.0542Jul-07 880.3478 881.2746 882.3436Aug-07 887.2831 888.6244 889.5782Sep-07 935.7657 937.8366 938.2891Oct-07 973.0185 974.4634 975.7427Nov-07 1035.861 1037.613 1038.926 1041.069Dec-07 1031.232 1033.43 1034.26 1027.807Jan-08 1131.715 1133.995 1135.073 1123.458Feb-08 1190.288 1192.831 1193.836 1179.419 1236.447Mar-08 1267.401 1266.205 1270.998 1254.922 1259.423Apr-08 1179.574 1180.68 1182.541 1165.983 1175.705May-08 1211.464 1214.134 1158.586 1198.634 1208.373Jun-08 1230.128 1232.896 1233.496 1216.781 1226.84Jul-08 1300.312 1303.126 1303.705 1286.13 1296.946Aug-08 1167.096 1169.524 1173.577 1152.213 1163.65Sep-08 1215.513 1218.141 1211.857 1198.67 1217.317Oct-08 1276.098 1272.639 1282.453 1243.208 1270.181Nov-08 1191.37 1203.437 1203.887 1174.442 1186.89Dec-08 1285.379 1288.289 1288.67 1233.083 1285.355Jan-09 1342.77 1339.655 1346.147 1311.78 1339.609Feb-09 1481.607 1487.818 1490.018 1448.862 1476.716Mar-09 1522.739 1523.885 1526.056 1483.273 1516.569Apr-09 1433.229 1434.158 1437.899 1396.233 1428.574May-09 1440.682 1442.595 1444.074 1404.696 1436.832Jun-09 1446.332 1449.078 1450.091 1410.565 1443.234Jul-09 1454.058 1457.173 1457.491 1418.224 1451.348

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TABLE – 1.2Return on Gold Exchange traded fund

Month Benchmark UTI Kotak Reliance QuantamApr-07 -0.00229May-07 -0.02229 -0.02072Jun-07 -0.00848 -0.00815Jul-07 0.002073 0.002085Aug-07 0.003408 0.003607 0.003546Sep-07 0.023105 0.023409 0.023153Oct-07 0.016954 0.016638 0.016999Nov-07 0.02718 0.02727 0.027249Dec-07 -0.00195 -0.00175 -0.00195 -0.00557Jan-08 0.040381 0.04033 0.040394 0.038645Feb-08 0.021915 0.021968 0.021921 0.021111Mar-08 0.027262 0.025925 0.0272 0.026949 0.007996Apr-08 -0.03119 -0.03037 -0.03133 -0.03192 -0.02987May-08 0.011585 0.012134 -0.00889 0.011994 0.011903Jun-08 0.00664 0.00666 0.027209 0.006526 0.006587Jul-08 0.024097 0.02406 0.024042 0.024073 0.024134Aug-08 -0.04694 -0.04698 -0.04567 -0.04775 -0.0471Sep-08 0.017653 0.017689 0.01394 0.017167 0.019581Oct-08 0.021125 0.019008 0.02459 0.015844 0.018462Nov-08 -0.02984 -0.02428 -0.02746 -0.02471 -0.02945Dec-08 0.032984 0.02959 0.029556 0.021161 0.034612Jan-09 0.018971 0.01698 0.018951 0.026869 0.017955Feb-09 0.042731 0.045557 0.044099 0.043166 0.042319Mar-09 0.011892 0.010403 0.010379 0.010194 0.011565Apr-09 -0.02631 -0.02636 -0.02584 -0.02626 -0.02596May-09 0.002253 0.002548 0.001861 0.002625 0.002503Jun-09 0.0017 0.001947 0.001806 0.001811 0.001931Jul-09 0.002314 0.002419 0.002211 0.002352 0.002435

Mean 0.006676 0.007097 0.009082 0.006713 0.004094

Skewness-0.64859 -0.64454 -0.81546 -0.75956 -0.67643

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II. KURTOSIS Kurtosis is statistical measure used to describe the distribution of observed data around the mean.Kurtosis is a measure of whether the data are peaked or flat relative to a normal distribution. That is, data sets with high kurtosis tend to have a distinct peak near the mean, decline rather rapidly, and have heavy tails. Data sets with low kurtosis tend to have a flat top near the mean rather than a sharp peak.Used generally in the statistical field, kurtosis describes trends in charts. A high kurtosis portrays a chart with fat tails and a low, even distribution, whereas a low kurtosis portrays a chart with skinny tails and a distribution concentrated toward the meanFor univariate data Y1, Y2, ..., YN, the formula for kurtosis is:

This definition is used so that the standard normal distribution has a kurtosis of zero. In addition, with the second definition positive kurtosis indicates a "peaked" distribution and negative kurtosis indicates a "flat" distribution.

Source-Kurtosis - Wikipedia, the free encyclopedia.htm

A distribution with positive excess kurtosis is called leptokurtic, or leptokurtotic. In terms of shape, a leptokurtic distribution has a more acute peak around the mean (that is, a higher probability than a normally distributed variable of values near the mean) and fatter tails (that is, a higher probability than a normally distributed variable of extreme values).A distribution with negative excess kurtosis is called platykurtic, or platykurtotic. In terms of shape, a platykurtic distribution has a lower, wider peak around the mean (that is, a lower probability than a normally distributed variable of values near the mean) and thinner tails (if viewed as the height of the probability density—that is, a lower probability than a normally distributed variable of extreme values)

With reference to Table No.1.2

Funds Benchmark UTI Kotak Reliance Quantam

KURTOSIS 0.018208 0.181668 0.079536 0.11987 -0.05912

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III. COEFFICIENT OF VARIATION - CV

A statistical measure of the dispersion of data points in a data series around the mean. It is calculated as follows:

 

The coefficient of variation represents the ratio of the standard deviation to the mean, and it is a useful statistic for comparing the degree of variation from one data series to another, even if the means are drastically different from each other. In the investing world, the coefficient of variation allows you to determine how much volatility (risk) you are assuming in comparison to the amount of return you can expect from your investment. In simple language, the lower the ratio of standard deviation to mean return, the better your risk-return tradeoff.

With reference to Table No.1.2

Funds Benchmark UTI Kotak Reliance Quantam

Co-efficient of variation

3.344704 3.117695 2.560534 3.561133 5.915582

IV. ANALYSIS OF VARAINCE (ANOVA)

The Analysis Of Variance, popularly known as the ANOVA test, can be used in cases where there are more than two groups. When we have only two samples we can use the t-test to compare the means of the samples but it might become unreliable in case of more than two samples. If we only compare two means, then the t-test (independent samples) will give the same results as the ANOVA. It is used to compare the means of more than two samples. This can be understood better with the help of an example.

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Benchmark gold ETF UTI GOLD ETF

KOTAK GOLD ETF

Reliance GOLD ETF

Quantum gold ETF

Quarter

07- 09 NAV

Quarter

07- 09 NAV

Quarter

07- 09 NAV

Quarter

07- 09 NAV

Quarter

07- 09 NAV

1 926.46 1 902.69 1 903.4 1 1064.11 1 1223.85

2 881.26 2 902.57 2 1016.3 2 1200.1 2 1244.05

3 981.55 3 1015.2 3 1200 3 1233.84 3 1217.04

4 1117.7 4 1197.7 4 1191.5 4 1198.03 4 1270.61

5 1219.5 5 1209.2 5 1229.7 5 1239.76 5 1473.95

6 1232.5 6 1230.3 6 1258.3 6 1442.78 6 1443.8

7 1227.7 7 1254.8 7 1454.1 7 1411.16

8 1369.9 8 1450.5 8 1444

9 1465.6 9 1441.9 9 1497.2

10 1459.9 10 1495.3

Step-1 : Variance Between Colum

NSample mean Grand mean

sample mean - grand mean

(sample mean - grand mean ) 2

N(sample mean - grand mean ) 2

10 1188.202 1234.28 -46.078 2123.182084 21231.8208410 1210.005 1234.28 -24.275 589.275625 5892.756259 1243.844 1234.28 9.564 91.470096 823.2308647 1255.688 1234.28 21.408 458.302464 3208.1172486 1312.223 1234.28 77.943 6075.111249 36450.66749

          67606.5927 Variance between column =16901.64817Step-2: variance within column

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s12 44294.02 10774.22108s22 46939.75 11417.77703s32 40151.62 8681.431351s42 17170.76 2784.447568s52 13342.98 1803.105405   

Variance with in column= 35460.98243

Calculated value of F = Variance between column / Variance with in column = 16901.64817 / 35460.98243 = 0.476626619

Table Value of f for (4,126 ) degree of freedom & 5 % significance level is 2.45 approxTable Value of f for (4,126 ) degree of freedom & 1 % significance level is 3.32 approx

calculated value of F= 0.476627 < Table value So hypothesis accepted

Which specifies that return from all the Gold exchange traded fund are same they bear no difference.

V. CORRELATION Matrix:

The study of correlation is of immense use in practical life. Correlation analysis contribute to the understanding of economic behavior , aids in locating the critically important variable on which other depend, may revel to the economist the connection by which distribution spread and suggest to him the paths through which stabilizing force may become effective. Correlation analysis is based on the relationship between two or more variables. The degree of relationship between the variable under consideration is measured through the correlation analysis. The measure of correlation called coefficient of correlation. It is also said to be a measure of covariance between two series.

Coefficient of correlation (r) = Cov (X, Y)

Sx Sy

r = 0 , No relation between X and Y. r = 1 , Perfect positive linear relationship. r = -1, Perfect negative linear relationship.

Benchmark gold ETF

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  benchmark gold Mcx bsc100 nifty

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benchmark 1 0.99964 -0.03745 -0.46234 -0.43995gold 0.999647 1 -0.04762 -0.46899 -0.4467mcx -0.03745 -0.04762 1 0.472066 0.561259bse-100 -0.46234 -0.46899 0.472066 1 0.97291nifty -0.43995 -0.4467 0.561259 0.97291 1

UTI Gold ETF  UTI gold mcx bsc100 niftyUTI 1 0.999735 -0.0564 -0.49742 -0.47768gold 0.999735 1 -0.04762 -0.46899 -0.4467mcx -0.0564 -0.04762 1 0.472066 0.561259bse-100 -0.49742 -0.46899 0.472066 1 0.97291nifty -0.47768 -0.4467 0.561259 0.97291 1

Kotak Gold ETF  Kotak gold mcx bsc100 niftyKotak 1  0.997627 -0.17965 -0.59646 -0.59162Gold 0.997627 1 -0.04762 -0.46899 -0.4467Mcx -0.17965 -0.04762 1 0.472066 0.561259bse-100 -0.59646 -0.46899 0.472066 1 0.97291Nifty -0.59162 -0.4467 0.561259 0.97291 1

Reliance Gold ETF  Reliance gold mcx bsc100 niftyReliance 1  0.996905 -0.39414 -0.59054 -0.64952gold 0.996905 1 -0.04762 -0.46899 -0.4467mcx -0.39414 -0.04762 1 0.472066 0.561259bse-100 -0.59054 -0.46899 0.472066 1 0.97291nifty -0.64952 -0.4467 0.561259 0.97291 1

Quantam Gold ETF  Quantam gold mcx bsc100 niftyQuantam 1  0.9928832 -0.562012  -0.32219 -0.42889gold 0.9928832 1 -0.04762 -0.46899 -0.4467mcx -0.5620122 -0.04762 1 0.472066 0.561259bse-100 -0.3221971 -0.46899 0.472066 1 0.97291nifty -0.4288937 -0.4467 0.561259 0.97291 1

PRIMARY DATA:Sample Size – 100Sampling method: convenience sampling

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Collected by Questionnaire

Parameters Out of 100 sampleAwareness of Gold ETF 35 are awarePreference for Gold ETF 21Preference for physical gold 79

RESULT AND DATA ANALYSIS

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Secondary Data analysis:

From Table1.2 we have analyze that the average rate of return on investment of all Five gold exchange traded fund are following in the same range which shows that all funds giving more or less same return on investment.

Skewness result shows that all five gold exchange traded fund having Negative skewness which means all are skew toward Left thus it is clear that the data point of Return on investment are less than the mean.

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