PERFORMANCE EVALUATION OF SELECT GOLD ETFS IN INDIA

Abstract

Gold Exchange-Traded Funds (Gold ETFs) offer a convenient way to invest in gold without the complexities of physical ownership. These funds track the domestic price of gold and represent physical gold in electronic form, making them accessible to investors. This study evaluates the performance of Gold ETFs in India, focusing on their risk and return analysis, and compares their performance over a 10-year period (2014-15 to 2023-24). The research includes 11 Gold ETF schemes traded on the National Stock Exchange (NSE) and utilizes various statistical tools to measure performance, such as Sharpe Ratio, Treynor Ratio, and Jensen’s Alpha. It is found that most Gold ETFs provided returns close to the benchmark gold price, with UTI Gold ETF and IDBI Gold ETF emerging as the top performers. While most ETFs delivered solid returns, some, like Axis Gold ETF and Quantum Gold ETF, exhibited higher volatility. The study also reveals that while UTI Gold ETF showed high returns, it had more market sensitivity and risk, making it suitable for risk-tolerant investors. On the other hand, IDBI Gold ETF was more stable, offering consistent returns and lower risk, making it a better option for conservative investors. It is found that Gold ETFs in India offer a viable alternative to physical gold investment, balancing convenience, liquidity, and risk.