Exchange traded Funds from the name as it indicates are investment vehicles that are similar to other stocks and bonds that are traded at the stock exchange. These are open ended funds that are used to evaluate the performances of other indices. The fund industry has drastically boomed with innovative changes with the introduction of ETFs. Not only had the fund industry boomed, the practical method of trading has also highly improved. During the initial days of trading, the transaction cost for transacting a mutual fund was high. But with the establishment of ETFs, the cost has reduced vividly and the efficiency per transaction increased significantly.

There are various types of ETFs like for example; stock ETFs, commodity ETFs, index ETFs, etc. and one of the most common ETFs is commodity ETFs. Commodity ETFs are funds that are invested in commodities like gold, silver and futures. Among these commodities the one commodity that is mostly invested as well as our research topic is the Gold ETFs. Similar to ETFs which is used to track the performance of indices, Gold ETFs are for tracking the performance of Gold Bullion. These ETFs are transparent investment funds which provide retail investors to widen their portfolio and also allow them to participate and trade in the Gold Bullion Market. The returns from investing in Gold ETFs comparatively equal to the returns that are gained from physical gold.

The first Gold ETFs came in to picture in USA during the year 1993. Initially these funds were not much of interest to the public as most of the investors were unaware about it and those investors who were aware about it didn’t give much importance as it was considered that investing in gold was risky as the prices appreciate which results in a gain and sometimes falls down which will lead to a loss and only those investors who are ready to take risk invested in gold. Initially these ETFs took years to attract both potential investors as well as small investors. When it was known to all the investment in them hiked most other ETFs.

THE STATEMENT OF PURPOSE

This study is undertaken to have a comparative study of the returns gained in investing in gold ETFs in London Stock Exchange (LSE) and National Stock Exchange (NSE). Also, a study is made with respect to the returns attained in 1day, 1 week, 1 month, 3 months, 6 months and 1 year. Based on the returns calculated within these time period a comparative study is done. The study further shows, is it wiser to invest in Gold ETFs in the economic conditions and for what period it should be invested in order to get better returns. Finally this study analyzes the role played by the London Stock Exchange (LSE) and the National Stock Exchange (NSE) in the trading of Gold ETFs.

OBJECTIVES

More particularly, this study has been designed to achieve the following objectives:-

To study the concept of Gold ETFs and the advantages in investing in the same

To have a comparative study on the performance of various Gold ETFs in India (National Stock Exchange) and in London (London Stock Exchange).

To evaluate the returns carried out on a 1 day, 1 week, 1 month, 3 months, 6 months, and 1year of Gold ETFs that are traded in both the London Stock Exchange (LSE) as well as the National Stock Exchange (NSE).

To study and know the competitive advantage between Physical Gold and Gold ETFs.

Finally to study about the role played by the National Stock Exchange (NSE) and the London Stock Exchange (LSE) on trading Gold ETFs.

METHODOLOGY

The study is carried out completely based on using the secondary data. This secondary data is collected from the National Stock Exchange and the London Stock Exchange websites. The study gives an outline on the past script prices on the various Gold ETFs which satisfy the following criteria:-

Gold ETFs pricing performance is available on the National Stock Exchange (NSE) and the London Stock Exchange (LSE) on various time intervals which is been considered as a part of the objectives of the study.

Secondary Data with respect to the closing price of the Gold ETFs is obtained on a daily trading days for a predefined interval

All Gold ETFs that’s data have been available is been considered for the study of the factors that are affecting the performance analysis.

If the returns are positive the price has appreciated and the investor results in a gain and if the returns are negative the price has depreciated and the investors results in a loss.

In order to get a comparative study as well as to analyse the returns on a short run investing, returns are calculated for 1day, 1 week, 1 month, 3 months and 6 months.

Finally the computation of the percentage return at the end of the period is done by the differences between the closing price a particular and the closing price of the previous date of the particular date taken for study divided by the closing price of the previous day of the particular date take taken for study and finally multiplied by 100 in order to get the percentage.

CHAPTERIZATION SCHEMA

This project is divided into six chapters. They are as follows:-

Introduction

The introduction deals with the following sub-heads

Introduction

Statement of Study

Objectives

Methodology

Chapterisation Schema

Limitations

Literature Review

Here we have a summarization done on the various studies which have been undergone earlier as well as relevant articles, reports and journals have been studied and briefed out.

Profile of the Industry

This chapter deals with the history of gold and initial use of gold and the beginning of Gold as an investment tool and difference between gold ETFs with physical gold. And finally the Cons and Pros of the Gold ETFs.

Profile of the Organization

This chapter includes the history of National Stock Exchange (NSE) and the London Stock Exchange (LSE) and its objectives, departments, performances and the role played for trading the Gold ETFs.

Analysis and Interpretation

Here the analysis and the interpretation is carried out on the data collected and the returns calculated.

Findings, Conclusion and Suggestion

This final chapter deals with the comparative study between investing in the National Stock Exchange (NSE) and the London Stock Exchange (LSE) and as well as the returns obtained during various time intervals and the reasons following it.

LIMITATIONS

The limitation of this study is as follows:-

Due to the time constraints the resources are limited to the London Stock Exchange (LSE) and the National Stock Exchange (NSE).

This study is restraint with the collection of Secondary Data and not Primary Data.

The correctness of the study depends upon the accuracy of the data available in the concerned sites.