CHAPTER- V SUMMARY OF FINDINGS, SUGGESTION AND CONCLUSION. Glittering gold has overshadowed all other asset classes this year and shimmering to

Transcription

1 CHAPTER- V SUMMARY OF FINDINGS, SUGGESTION AND CONCLUSION SUMMARY OF FINDINGS 5.1 INTRODUCTION Glittering gold has overshadowed all other asset classes this year and shimmering to glory are the Gold ETFs that came into the market a year back. But it has not yet found many takers as compared to physical gold. In India Gold ETFs was first launched on March 2007 and completed a year of phenomenal rally, thanks to mounting gold prices. As these funds trade on the underlined price of gold and they have given an average returns as high as 24% in the last one year with the precious metal appreciating from Rs 10,000 levels for 10 grams of gold to more than Rs. 23,000 levels this year. As the demand and supply mismatch continues the gold prices are expected to rise. India is one of the largest consumers of gold. Nearly 800 tonnes of gold is imported every year. 23% of the world s total annual demand for gold comes from our country. While conventional investment options like Jewels, gold bars and coins still exist, Gold ETFs are another effective way to invest in the yellow metal. But while demand of gold has risen 15% and gold ETFs have still found few takers even after much fanfare. Experts say if a person is looking at gold as an asset class purely for investment then Gold ETFs proved to be a much more investor s friendly option and are expected to address issues of higher prices of physical gold, purity and cost of insurance. Easy to buy and sell is the main advantage of Gold ETF. Typically, if the investor wants to buy physical gold, they have to 210

2 go somewhere else. The second advantage is storing. If the investor buys physical gold, they have to store in their house safely. Thirdly, the investor can do transactions on denomination in Gold ETF because the investor can buy even one unit. While in physical gold buying of 1 gram and adding them is painful because the investor have to melt it to make a bigger coin or bar and that takes away some value out of it. All these pains are eliminated in purchasing Gold ETF. The young generation now prefers to invest in online rather than going to jewels, which is increasing the demand for paper gold, Harish Galipelli, head of research at commodity brokerage firm JRG Wealth Management, said in a wsj.com (the wall street journal) report. Urban consumers not only prefer to purchase from the comfort of their homes but also see better value in ETFs as they are sure of the purity of the precious metal and it avoids costs charged for making Jewels. Gold ETFs have been a much-anticipated development. These are expected to addresses the issues of higher prices, purity, costs of insurance, storage and liquidity associated with investing in physical gold. Gold ETFs are open-ended mutual fund schemes that will invest the money collected from investors in standard gold bullion (0.995 of purity). The investor's holding will be denoted in units, which will be listed and traded in a stock exchange. These are passively managed funds and are designed to provide returns that would closely track the returns from physical gold in the spot market. An investor can buy and redeem the units either directly from the mutual fund which is subject to certain stipulations or from the stock exchange. In the last one year 35 percent return achieved and 170 percent absolute return in the last five years is not par for the course. In the period , gold prices had a Compounded Annual Growth Rate (CAGR) of around 21 percent while inflation grew by

3 percent at the same period. But in the following 23 years the inflation grew by 7.6 per cent while gold prices grew by 7.78 per cent. Over the long term the realistic returns from gold would just beat inflation. Factor in entry loads (a high 2.5 per cent for UTI-Gold) and Annual Fund Management costs of 1 percent or more and the returns are not appealing though the costs are expected to come down in the long run. However, in the short and medium period of investment in gold can be very rewarding considering that the prices have come off to the high quite a bit and the indicators all points to a revival in the price rally. Further, global demand for gold is 1,000 tonnes more than the supply. With no new mining capacity coming through in which most of the gold is being recycled. Inflationary pressures in the world economy are positive drivers of gold prices. The Central Banks of China and West Asian countries are giving strong buying support to gold prices. Gold prices could also go up due to demand from gold ETFs, as they did in the London Stock Exchange in Investing in gold requires constant evaluation of international developments especially of crude oil prices, unfavorable geopolitical developments and the strength of the US dollar. Gold ETFs are passively managed funds and hence, not geared to exploit positive or negative trends. However, the investor can vary portfolio allocation to gold ETFs to take advantage of these trends. There are enough reasons why gold should be included in any investor's portfolio whether in physical or paper form. Investing in gold ETFs will give the investor all the advantages of investing on gold while eliminating drawbacks of physical gold, cost of storage, liquidity and purity among others. Gold ETFs are transparent investment vehicles which have to conform to rigid regulations on investment norms and valuations. This assures the quality of gold and the fund 212

4 will invest transparency with calculation of NAVs and consequently, the market price at which these units will trade. Gold ETFs allow investment on gold in small denominations, which makes it easier for the retail investor to participate. On the secondary market, the minimum lot is one unit. This enables the investor to accumulate units over time and reap the benefits with average cost of rupee. The units can be redeemed either from the direct fund or from the market. Further, investing in paper gold gives investors tax advantages by investing on physical gold. Gold ETF units held for more than one year qualify for long-term capital gains at 20 percent, whereas the holding period in physical form has to be three years to qualify for long-term capital gains. For less than three years, the gains are taxed at 30 percent. Also, gold held in paper form is not liable for wealth tax. Stability, reduced volatility in a well-diversified portfolio, inflation-plus returns, convenient investment vehicle to get tax-efficient exposure, are all good reasons to invest on gold ETFs. However, if the investors are looking to trade in the metal to take advantage of shortterm price fluctuations then they are better for trading in future on the commodities market. The fund management cost, however low which will reduce the returns. If the investors are looking for high in long-term returns, then equity markets are a better option. The launch of gold ETFs has widened the range of asset classes offered by mutual funds. These funds can definitely form 5 to 10 percent of a portfolio as a form of insurance. However, there are certain issues that investors must keep in mind while doing so. Liquidity may become an issue for small investors who want to exit, especially at the times of crisis. Finding buyers at a fair price in the markets may a problem if the investor needs to convert to money. Redeeming units directly from the fund may not be an available option. Again, during periods of financial crisis like hyperinflation or failure of banks, the large investors may convert 213

5 paper holdings to physical gold. Small investors who do not have this option may be left holding illiquid paper. In such a situation, gold loses its edge as a store of value. On the returns front, while gold ETFs can add luster over smaller periods, the returns they generate in the long term are not very encouraging. Entry loads and fund management costs further reduce returns. Investor could consider buying the units in the secondary market, where brokerage costs may be lower than the applicable entry load. If an investor is clear about the reasons for investing on gold and the issues related to it then there will be every reason to include gold as an asset class in the portfolio and the gold ETF may be just the ideal vehicle to join in the gold rush. 5.2 FINDINGS This section recapitulates the major findings of the study with reference to its objectives Summary of Capital Market The capital market constitutes a very vital segment of the Indian economy. They channelize savings to investment and thereby decouple these two activities. As a result, savers and investors are not constrained by their individual abilities but by the economy s ability to invest and save respectively, which inevitably enhances savings and investment in the economy. The capital market facilitates people to do more with their savings than they would otherwise. The people s savings are matched with the best ideas and talents in the economy. It mobilizes savings and channelizes them through securities into preferred enterprises. 214

6 The capital market enables all individuals, irrespective of their means as to share the increased wealth provided by competitive enterprises. The capital market allows individuals who cannot carry an activity in its entirety within their resources to invest whatever is individually possible and preferred in that activity carried on by an enterprise. Indicators of stock market development for one of the oldest and premier stock exchanges in India, namely the Bombay Stock Exchange revealed that stock market size as measured by the number of the listed companies, market capitalization and liquidity by the turnover ratio has been increased over time. A few statistics, mostly taken from the Indian Capital Market Review, a publication of the National Stock Exchange indicates that corporate sector and governments together raised a total of Rs.25, 20,179 millions from the year , there are about 20 million investors who have invested in the securities. The Indian economy witnessed a growth of 6 percent per year in 1990s against euphemistically described as Hindu Growth Rate of 3.5 percent over preceding four decades. This was possible by contributions mostly by the organized secondary and tertiary sectors (industry and service). The capital market helped these organized sectors, corporate and government to raise resources and to realize a growth rate of 6 percent. Of late the activity in the capital market has slowed down and also the level of activity in the economy. The 1990s witnessed emergence of the capital market as a major source of finance for trade and industry. A growing number of companies are accessing the capital market rather than depending on loans from financial institutions/banks. 215

7 According to CMIE data, the share of capital market based instruments in resources raised externally increased to 53 per cent in , but declined thereafter to per cent by Average annual capital mobilization from the primary market, which used to be about Rs.70 crore in the 1960s and 90 crore in the 1970s, increased manifold during the 1980s, the amount raised in being Rs. 4, 312 crore. The market appears to have dried up in late 1990s due to inter play of various factors. The corporate have shifted focus to other avenues for raising resources like private placement where compliance is much less. Available data, although scanty indicated that private placement has become a preferred means of raising resources by the corporate sector Socio economic profile and the sample respondents invested on Gold ETF: Majority of respondents come under the age group up to 30 and years. The remaining respondents are almost equally distributed into other age groups. 55% of the total respondents were male and 45% are female. This shows that the economic independence of female is being elevated as compare to male investors. A greater part of the investors are from the households where the number of members are above four and three which represents 34.0 and 27.0 percent and the remaining from other categories. Most of the households were comprises two adults which constitutes 30 percent of total respondents, 29.2 percent of respondents were having more than three earning adults in their family and the rest of 40.8 percent of the respondents were having one to three earning adults, in the household. 216

8 Nearly 39.2% of the respondents come under the married group and 30.6 % of the respondents fall in the unmarried group and the remaining respondents fall in the widower category. More than three fourth of the respondents were educated and one fourth fall under no formal education category. In occupation-wise classification the self-employed persons constitute the larger percentage of the total respondents which is around 34.6 percent. Nearly 19.8 percent of the investors come under the income group of Rs.10, 001- Rs.15, 000 and 18.6 percent of the investors belong to the income group of Rs.15, 001- Rs.20, 000 respectively. Investor s awareness 29.2 percent of the respondents were highly aware about gold ETFs as a mode of investment, 36.8 percent of the respondents belong to both aware and partly aware about gold ETFs category and remaining respondents were not aware of such form of investment. 146 respondents who were highly aware about the gold ETF investment as compare to other level of awareness, in which 109 respondents belongs up to 30 years age group stated that they are highly aware of such investments in contrast with other age group. There are fewer differences in the level of awareness between male and female investors. Out of whole respondents, 146 respondents from both gender have equally and highly aware about the gold ETFs investment as compare to other level of awareness. 217

9 63 out of 146 respondents were married with the highly awareness of gold ETFs and the remaining respondents belong to unmarried (35) and widower (48) respectively. There is no much difference in respect of graduates and no formal education for the purpose of investment in gold ETFs which represent 30.1%. However, there is a turn down in the proportion in respect of respondents whose educational level is intermediate and post graduate i.e., 14.4% and 25.3% respectively. The level of awareness among self-employed person is significantly different high from the other occupational categories namely, retired and full time salaried person. Source of awareness 156 out of 500 respondents given their spouse as the source of awareness for their investment in gold ETFs. Agents plays second important role in the source of awareness with 142 respondents. Investors share their views and get the opinion from friends and relatives very less here only 98 respondents have opted this as the source of awareness. The analysis indicates that there are some differences in the source of awareness between male and female investors. 156 respondents of both the gender 88 of male and 68 of female consider the information provided by their spouse. 78 of male respondents and 64 of female respondents depend on the services of the agents for their investments. 104 respondents of both the gender avail the advertisement as their source of awareness which takes third place on the awareness. Majority of 196 respondents of married category utilize all the available source of awareness. 61, 60, 44 and 31 respondents get the source of awareness from agents, 218

10 spouse or parents, advertisement and friend and relatives respectively. 153 respondents fall under the unmarried sector to use all the source of awareness in the second place. It is clear from the analysis that total number of 156 respondents with 129 graduate, 19 post graduate and 8 from both intermediate and no formal education respondents get the source of awareness from spouse or parents. 88% of 142 respondents in the category of no formal education were influenced by the agents. They invest in various securities through agents as compare to other categorization of education. As a whole self employed person have a better awareness about various alternative investment avenues in the market as compare to any other occupation category. Amount of investment The analysis shows 192 respondents invest less than Rs. 3,000 on gold ETFs with the first place, where as 144 respondents opt Rs. 3,001 Rs. 6,000 as the amount of investment in gold ETFs with the second place. Third place goes to the higher amount of investment above Rs. 12,000 with 102 respondents. The study clearly indicates that there are some differences between male and female investors in the cluster were the amount is less than Rs.3, 000 as an investment in gold ETFs. In which 50.5 % male and 49.5% female investors sum up to 192 respondents. Further it is noted that Rs.3, 001 Rs. 6,000 category have 144 respondents in which 78% male and 66% of female respondents invest in gold ETFs. There are 102 respondents in the class were the investment amount is above Rs. 12,000 which comprises of 61.8% male and 38.2% of female respondents. The marital status have significant role in the investment avenue. 196 respondents belong to the married group with the 81 respondents do less than Rs. 3,000 as 219

11 investment where as 53 respondents invest more than Rs. 12, respondents fall in the unmarried sector with high note of 56 respondents invest in Rs. 3,001- Rs.6,000 category followed by 50 respondents with the investment less than Rs. 3,000. The graduates have been the highest target group in making investments through gold ETF followed by the no formal education group, who were not having formal education excel as entrepreneurs, they have found investing in gold ETF as the fruitful investment. The maximum amount of investment which could be afforded was less than Rs. 3,000 followed by the amount Rs. 3,001- Rs. 6,000. From the study it is clear that the percentage of responses of the sample investor is not uniformly scattered among the various occupational categories. Majority of selfemployed person invest more in the less than Rs. 3,000 category in contrast with other occupational categories namely, full time salaried person and retired person. In the category of full time salaried person 165 respondents have the next higher value where 64 respondents invest in category of Rs Rs. 6,000. Advice agreed upon while investing In age group of up to 30, there are 143 respondents who accept the advice given by all, while investing when compared with others age group. These young people are ready to accept the idea given by others if it is a profitable one. The young age accepts the risk in making investments. The age group of 51-60, there are 102 respondents in which 37 investors get the advice from the friends. There is no much different between other age group of investors in getting advice from broker and the suggestions given by the TV/Newspaper while investing in gold ETF. 220

12 There are fewer variations in the source of advice between male and female investors. Here 53.7% male and 46.3% female respondents of 149 respondents avail opinions of their friends for their investment, who give more important to the suggestions of their friends. The analysis specifies that 56.6 % male and 43.4% female respondents of 143 respondents consider the suggestions given by TV/newspapers. Both the 53.3% male and 46.7% female of 107 respondents are influenced by the broker as their source for investment. From the analysis, married respondents occupy the majority role that is backed by the advices given by their friends for their investments. 36.9% of married respondents consider the advice given by their friends. In the category of widowers it is contrary from the married category. 41.1% of widowers follow the advice given by the brokers while investing in gold ETFs from the total 151 respondents. It is clear from the study that, 149 respondents, 78.5% of graduates are influenced by their friends and 21.5% constitutes others which includes 12.8% of post graduates, 4.7% of intermediate and no formal education of 4.0% respectively. 78.3% of 143 respondents in the category of no formal education were influenced by the suggestions given by TV/newspapers. They invest in various securities by the suggestions of the media as compare to other categorization of education. Last but not least 101 respondents of the total were take decisions for investment on their opinion itself On the entire it establishes that the self-employed persons had better awareness of the various investment alternatives, as compared to the investors of other occupational categories. Out of 173 respondents belong to the self employed category, 37.1% agree 221

13 the suggestion given by TV/Newspaper while investing in gold ETFs. While 162 respondents of retried person category, 39.9% agree the suggestion given by TV/Newspaper for the investment. Investment strategies More than half of the respondents irrespective of the age group sell the gold ETFs within a few days or months or year and as soon as the price reaches high. While remaining respondents won t sell the gold ETFs for certain period of time and keep revising the target price until it reaches high from all the age group. 170 respondents are willing to sell gold ETFs in stipulated period of time in which the self-employed persons occupies the major role as compare to other category of employment. Maximum number of respondents sells gold ETFs within a few days or months or within a year in which 22.4%, 21.8% and 20.0% of 170 respondents falls under the income group of Rs.10, 001-Rs.15, 000, up to Rs. 5,000 and Rs. 15,000 Rs. 20,000 respectively. It also signifies that 152 respondents are not interested in selling in which majority of respondents are of Rs.15, 001 Rs.20, 000 as compare to other income groups. A huge number of respondents sell their investments within few days or months or year more in contrast with other amount of investment categories of respondents. Most of investors invest in gold ETFs and sells according to the fluctuation of the prices which may be monthly, quarterly, half yearly and annually. There are few 222

14 investors who don t sell their investments in gold ETFs even there is much fluctuations in the investment prices of gold ETFs. Three fourth of respondents will sell their investments on gold ETFs in a few days or months or years as to meet the following needs i.e. prestige, to meet the higher education and marriage of their children respectively. A greater part of respondents of different age group invest in gold ETFs when the value of dollars increases which occupies the first place and in second place fluctuations in oil prices which includes 132 respondents as a whole. 38.0% of 166 respondents belong to full time salaried group buy gold ETFs when the value of dollar is high as compare to self employed and retired person respectively i.e. 33.7% and 28.3%. In fluctuations in oil prices have influence self employed persons occupies the major role as contrast to retired persons and full time salaried which comprises of 35.6% and 28.0% respectively. Other reasons like political uncertainty, low rate of interest and equivalence to gold to oil ratio also plays a vital role in influencing investors to invest in gold ETFs. Increase in the price of dollar and the fluctuation in oil prices have a great influence in the investments made by the investors towards the gold ETFs irrespective of income of investors. Nearly 36.7%and 30.7% of 166 respondents consider the high value of dollars as a reason for their purchase of gold ETFs and 132 respondents of various amount of investment in gold ETFs groups are interest to buy when there is a fluctuation in oil prices which comprises of 37.1%, 28.8%, 20.5% and 13.6% respectively. 223

15 Most of the respondents are investing in the gold ETFs, as to meet the higher education for their children which constitute 28.2% of the total respondents and remaining respondents were investing for prestige, to avail tax benefit and capital appreciation with a percentage share of 18.8, 18.4 and 17.8 respectively Less than Rs. 3, 000 of investment occupies the major part as compare to all other categories of frequency of investment which comprise of Rs.3, 001- Rs.6, 000, above Rs.12, 000 and Rs.6, 001- Rs.12, 000 respectively. Nearly 35.8% of the total respondents were investing on a quarterly basis, 27.2% have the habit of investing in gold ETF on annual pattern and 37% invest on half yearly and monthly respectively. Assistance of friends in taking the investment decision plays a vital role as compare to any other source of advice. 33.2% and 26.4% of the respondents invest on gold ETFs when the dollar value is high and fluctuation in oil price. Remaining 40.4% of respondents invest when there is a political certainty, returns rate is high, and equivalence to gold to oil ratio. Majority of the respondents have strategies on selling gold ETF within a few days or months or within a year and 30.4% respondents are not interested to sell their investments. DGL and DBP occupy the major roles as compare to GLL, GDX and DGP which comprises of 23% and 22.2% respectively. 224

16 To measure the awareness, perception of small and household investors in respect of Gold ETFs investment avenues. After the introduction of gold ETF, the investors are feeling very happy to purchase gold at minimal quantities and increase their security in the fluctuation of gold market. It was understood from the above analysis, that the investors had varied reasons for investing in gold. The major reasons and the perceived mind of the investor to invest in gold was only on two reasons viz., the gold ETF has given an opportunity to accumulate the gold over a period of years. Further the gold ETF had not forced the investor to purchase gold of a sovereign but gave freedom to purchase a gram gold. Hence forth the possibility of purchasing gold in small quantities had pushed the investor to purchase gold through ETF s. While purchasing gold ETF the investors has two risks unveiled The risk of buying gold and keeping it without returns at home is eliminated. There is no possibility of lowering interest rate through market fluctuations are also eliminated. Hence forth investing in gold ETF have gained momentum in the recent days rather than investing in shares real estate, etc To ascertain the factors that influences the investors for investing in Gold ETFs and the reasons for repeated investments. It was clear and evident from the analysis that the various companies issuing gold ETF has been selling the gold ETFs at a transparency price and they were having high liquidity while 225

17 selling and the SEBI has ensured heavy securities and norms hence it has a low risk profile. Hence forth the gold ETFs are becoming a very safe pattern in the minds of investors. It would be found that the factor affordability, as the gold ETFs were able to be purchased in small quantities at varied levels have given the avenues for investing on gold. As the gold has varied schemes and sold at transparent price was the next factor which has given prime satisfaction for the investor who have purchased gold ETFs. Every investor has a willingness to purchase Gold, will try to purchase a gold of purity, has secured a total score of 871 and has been ranked as III, IV and V ranks were secured by the factors of liquidity for low risk and which has given the best strategy for return potential had a total score of 869 and an average mean of To measure the problems that would rise while investing in gold ETF and assess the investor s level of satisfaction It would be observed from that the investment on gold ETFs, the reasons such as the portfolio disclosure is on daily or real time, gold is used as hedge against inflation. It is considered to be less volatile compared to equities. 5.3 SUGGESTIONS: In the light of the conclusions drawn earlier, the following suggestions would go long-way in improving the investment culture and investors protection among the small and household investors. There is an explosion in the growth of middle class families due to double income group families and increase in number of working women, hence this group will plays 226

18 vital role in the investment market. Efforts should be made to attract the women investors by providing right information and knowledge about the investment market through advertisements. Print media and electronic media should play an active role in disseminating investment information for timely decisions. There is a direct need to initiates steps to inculcate a habit of savings among the growing middle class families. The savings are to be pooled and channelized into productive investment, thereby enhancing the returns to the investors. It may further accelerate investment in corporate securities in future on a large scale. Investors should be educated about the benefits of investment in diversified industries and companies. Diversification of funds among different industries is a must because if one industry fails or experiences a down trend in share value then the investment in other industries would be safe. So investors are to be explained about the advantages of diversifying funds across industries and over different companies in the same industry. Of the different groups of the investors, professionals and businessman pay less attention while evaluating the pros and cons of investing in different securities. They have to be explained about the need and benefits of systematic and analytical evaluation of different alternatives and competitive investment avenues. Then only it is possible to park surpluses in economically viable investment. The capital market regulator should undertake educative and informative mechanisms through internet so as to create investment awareness among the public. The people who are investing in securities should be informed about the benefits of capital appreciation instead of short-term returns. The capital appreciation will take 227

19 place when the investments are to be continued over a longer period of time so there by the investors wealth increases with wire investment. Since the investors gives importance to regular and fixed returns from debentures, so the watch dogs of capital market should periodically and constantly oversee the functionality of corporate bodies and then only it is possible for the corporate to earn and declare and pay interest regularly. It promotes confidence in the minds of the investors about the payment of return at regular intervals. There is a need of Specific Act for protecting investor s interests. The Act should codify, amend and consolidate laws and practice for the purpose of protecting investors interest in corporate investment. A Judicial forum is needed for the redresser of investor s grievances for the purpose of remedying the same with the award of compensation. The consumer forum only for the purpose of compensating the investors. The objective of motivating the public to invest their savings in the stock market will be achieved only if the regulatory authorities succeed in providing a manipulation free stock market. With the rate of interest offered by banks on deposit being very unattractive as a result many people could think of investing in the stock market. This could happen only if the stock market is transparent and free from scams because those who invest in bank deposits basically wants to avoid risk. The Government should take proper steps to regulate the market operations and protect the investors from the unethical and illegal activities of the actors of the stock market and other investment avenues. 228

20 It will always be impossible to match the theoretical returns of an asset through an ETF but if you compare the costs of holding physical gold bullion to holding shares of a low-cost ETF the fund will likely be a cheaper alternative. ETFs usually report their holdings through formal disclosures and from time to time on their websites, and there is often a small mismatch between what is shown in these reports and the current value of the fund. So proper publishing of data pertaining to Gold ETF has to be made. Theoretically, an ETF is backed by its assets and therefore its shareholders are secure so, it is possible for an ETF manager or sponsor to go out of business or defraud shareholders. Shareholders in gold ETF may not have the same rights in the event of a bankruptcy that would apply to stock holders in a public company. Hence proper guidelines are needed. CONCLUSION: Now-a-days the younger generation plays exemplary role in overall investors behavior. People invest in various investment avenues which differ from persons to person depending upon their requirements and it also depends on their personal factors like age, gender, income, occupation and etc., According to the investors awareness, perception and preference their investment choice also varies. Some investors invest in securities where they get higher return in relation to high risk or vice versa. Awareness is considered to be the first and foremost step which measures the investors exposure and knowledge towards investments. The investors awareness is shaped by the external sources like friends and relatives, brokers, spouse or parents and through media 229

21 which provides them a platform for their investments. Investors should have a good balance between awareness and their personal factors as it would motivate them to invest more. In today s life the standard of living is moving at high speed which forces the people to earn more and more as to lead a sophisticated life. In current scenario the small and household investors would prefer safety and liquidity form of investment as compare to other investments. Indian population has given high appeal for investing in gold which is also a recent trend of investment and investors need more awareness about such form of investment which includes Gold ETF. Investors are ready to accept the ideas of gold ETF if it is profitable one. It is considered to be one of the latest trends in investment which provides the benefits such as purity, affordability, liquidity and transparent price. To convert the Gold ETF holdings into physical form, the investor has to follow the regulations framed by the SEBI. Gold ETF provides the investors the opportunities to purchase gold at minimal quantities. The main reasons for investing in gold ETF is to meet their children higher education and marriage. On the other hand gold price is influenced because of high in dollar values and fluctuation in oil price. If an investor is clear about the reasons for investing in gold and the issues related to it then there will be every reason to include gold as an asset class in the portfolio and the gold ETFs may be just the ideal vehicle to join in the gold rush. 230

22 SCOPE FOR FURTHER RESEARCH Further the research can be carried out by focusing on Analyzing Gold ETFs as a long run hedge against inflations. Scope exists for studying the quantitative trading of gold ETF using nonlinear models. Further study on the financial performances of Gold ETF companies in Stock Exchange. Price volatility of Gold ETFs and stock market returns in India. Focusing on the relationship between the prices of gold ETFs with gold mining and non mining equities. A study on the performance and trading of gold exchange trade fund in the stock exchange. A detailed study may be considered to ascertain and analyze the volatility of stock with gold ETFs. Comparative study of risk and return performance of Gold ETFs in Indian markets and close ended funds may be undertaken. 231