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COMPANYORIGINALPROJECTCOMPLETIONLETTERTOBEINCLUDEDINTHEREPORT

COMPANYLETTER

DECLARATION

I, SARAVANA KUMAR V a bona fide student of SRM University School of Management

studies would like to declare that the Project entitled A Comparative Study On Gold ETF In

Selected Five Mutual Fund Companies In India submitted to University School of

Management studies, Chennai in partial fulfillment of Master of Business Administration (MBA)

final year Degree course from the SRM University.

REGISTERED NO: 3511010630

PLACE: Chennai

DATE :

Signature

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CERTIFICATE

This is to certify that the Project titledA Comparative Study on Gold ETF in Selected

Five Mutual Fund Companies in India Submitted by SARAVANA KUMAR V in partial

fulfillment of the requirements of the Post Graduate Degree course in Masters of Business

Administration (MBA) for the Academic year 2010-2012 in the subject of Finance Management

is the original work of the above candidate.

Head Guide Faculty

School of Management

Submitted to Project Viva voice held on ______________

Internal Examiner External Examiner

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ACKNOWLEDGEMENT

I am extremely thankful to the management of SRM University for providing the

opportunity to under go Masters Degree in Administration during the Academic Year 2010-

2012.

I would like to express our sincere sense of regard and gratitude to the Dr.Jayshree

Suresh Dean SRM Scholl of Management Studies

I also would like to extend heartfelt gratitude to the project guide Dr.Jayshree Suresh ,

for the continuous guidance, co-operation and constructive criticism through out phases of

this project which gave a shape to this project report. I also express gratitude to other staff of

the college for giving support and encouragement.

We take opportunity to thank Mr. Thara, for allowing to do project in the esteemed

organization. I forget to mention the management team of RR DONNNELLEY, Chennai. They

have been an instrument in motivating me to take a full charge on this project. I wish place

on record my sincere thanks to the employees of RR DONNNELLEY, for their valuable

contribution for this project.

I wish to thank all my family, friends and all my respondents for their help and guidance

without whose co- operation this study would not have been possible.

PLACE:

Date:

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LIST OF CONTENT

CHAPTER TITLE PAGE. NO.

LIST OF TABLES 7

LIST OF CHARTS 8

ABBREVIATION 9

CHAPTER I INTRODUCTION 10

1.1 Research Background 11

1.2 Need for the study 13

1.3 Statement of the problem 14

1.4Objectives of study 151.5 Scope of study 15

1.6 Limitation of study 15

1.7 Research Methodologies 16

CHAPTER II Industry profile 24

Company profile 36

CHAPTER III Review of Literature 42

CHAPTER IV Data Analysis and Interpretation 43

CHAPTER V Conclusions 83

BIBLIOGRAPHY 86

Websites 86

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LIST OF TABLES

6

CHAPTER TABLE NAMEPAGE

NO

1.1 Gold ETFs Mutual Fund Companies in india 371.2 Selected Five Gold ETFs mutual Fund Companies

Performing in India40

4.1 Month wise fund value of UTI Gold ETFS 43

4.2 Month wise fund value ofRELIGARE GOLD ETFS 46

4.3 Month wise fund value ofRELIANCE GOLD ETFS 48

4.4 Month wise fund value of SBI GOLD ETFS 51

4.5 NAV Movements of QUANTUM GOLD ETFS FUND VALUE 55

4.6 NAV Movements of RELIGARE GOLD ETFs FUND VALUE 56

4.7 NAV Movements of RELIANCE GOLD ETFS FUND VALUE 574.8 NAV Movements ofSBI GOLD ETFs FUND VALUE 58

4.9 Fund value fluctuation of GOLD ETFs in BSE SENSEX 60

4.10 Risk analysis of UTI Gold ETFs 63

4.11 Risk analysis of Quantum Gold ETFs 64

4.12 Risk analysis of Religare Gold ETFs 65

4.13 Risk Analysis of Reliance Gold ETFs 66

4.14 Risk Analysis of SBI Gold ETFs 67

4.15 Risk Analysis of Mutual fund Gold ETFs 68

4.16 Rank Analysis Of Co-Efficient Of Variation Calculation 694.17 Risk Analysis of UTI Gold ETFs 69

4.18 Risk Analysis of Religare Gold ETFs 70

4.19 Risk Analysis of Reliance Gold ETFs 71

4.20 Risk Analysis of SBI Gold ETFs 72

4.21 Risk Analysis of Mutual fund Gold ETFs 73

4.22 Rank Analysis Of Beta Calculation 74

4.23 Absolute Return for TOP 5 Mutual Fund Gold ETFsCompanies

76

4.24 Portfolio return for Gold ETF fund 764.25 RANK ANALYSIS OF SHARPE RATIO CALCULATION 77

4.26 Expense ratio for Gold ETF Fund 79

4.27 Rank for Expense ratio for Gold ETF Fund 79

4.28 Expense ratio of Quantum Gold ETF fund 80

4.29 Overall Rank Analysis of Selected Five Gold ETF MutualFund Companies

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LIST OF CHARTS

CHAPTER TITLEPAGE

NO

4.11 Month wise NAV of UTI Gold ETF 44

4.12 Month wise Return of UTI Gold ETF 44

4.21 Month wise NAV of Quantum Gold ETF 45

4.22 Month wise Return of Quantum Gold ETF 46

4.31 Month wise NAV of Religare Gold ETF 47

4.32 Month wise Return of Religare Gold ETF 48

4.41 Month wise NAV of Reliance Gold ETF 494.42 Month wise Return of Reliance Gold ETF 50

4.51 Month wise NAV of SBI Gold ETF 52

4.52 Month wise Return of SBI Gold ETF 52

4.61 Fund Value of Fluctuation in BSE SENSEX (correlation) 60

4.62 Risk Analysis of Gold ETF Fund in Co-efficient of variation 68

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ABBREVIATION

ETF - ExchangeTradedFund

NAV - Net Asset Value

AMC - Asset Management Company

AUM - Asset Under Management

SEBI - Securities and Exchange Board of India

UTI - Unit Trust of India

SR - Sharpe Ratio

IPO - Initial Public Offer

ELSS - Equity Linked Savings Schemes

RBI - Reserve Bank of India

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Chapter 1

INTRODUCTION AND DESIGN OF THE STUDY

1. IntroductionMutual funds are institute that collect money from several sources - individuals or

Institution by issuing 'units', invest them on their behalf with predetermined investment

objectives and manage the same all for a fee. They invest the money across a range of financial

instruments falling into two broad categories equity and debt. Individual people and institutions

no doubt, can and do invest in equity and debt instruments by themselves but this requires time

and skill on both of which there are constraints. Mutual funds emerged as professional financial

intermediaries bridging the time and skill constraint. They have a team of skilled people who

identify the right stocks and debt instruments and construct a portfolio that promises to deliver

the best possible 'constrained' returns at the minimum possible cost. In effect, it involves

outsourcing the management of money. More explicitly, the benefits of investing in equitiesand

debt instruments are supposedly much better if done through mutual funds.

This is because of the following reasons:

o Firstly, fund managers are more skilled. They are trained to identify the best investmentoptions and to assess the portfolio on a continual basis;

o Secondly, they are able to invest in a diversified portfolio consisting of 15-20differentstocks or bonds or a combination of them. For an individual such diversification reduces

the risk but can demand a lot of effort and cost. Each purchase or sales invest cost in

terms of brokerage or transactional charges such as demat account fees in India. The need

to possibly sell 'poor' stocks/bonds and buy 'good' stocks/bonds demands Constant

tracking of news and performance of each company they have invested in Mutual funds

are able to maintain and track diversified portfolio on a constant basis With lesser costs.

This is because of the pecuniary economies that they enjoy when it Comes to trading andother transaction costs;

o Thirdly, funds also provide good liquidity. An investor can sell her/his mutual fundinvestments and receive payment on the same day with minimal transaction costs as

compared to dealing with individual securities, this totals to superior portfolio returns

with minimal cost and better liquidity.

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This can be represented with the following flow chart:

Chart 1,

Investor

Fund

Fund

House

Securities

Return

Securities

Source: Association of Mutual Funds in India (AMFI)

1.1Investment

Investment is the commitment of funds in an asset or financial instruments with the aim

of generating future returns in the form of interest, dividend or appreciation in the value of the

instrument. Investment is involved in many areas of the economy, such as, business management

and finance no matter from households, firms, or Governments.

An investment is a sacrifice of current money or other resources for the future benefits.

The two key aspects of any investment are time & risk. In some investments (like government

bonds) the time element is dominant attribute. In other investments (like equity shares) both time

and risk are important.

An investor has numerous investment options to choose from, depending on his risk

profile and expectation of returns. Different investment options represent a different risk-reward

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trade off. Low risk investments are those that offer assured, but lower returns, while high risk

investments provide the potential to earn greater returns. Hence, an investors risk tolerance

plays a key role in choosing the most suitable investment.

Various investment options available are

1. Bonds or debentures2. Life insurances3. Real estate4. Money market instruments such as Treasury Bills, Commercial papers5. Precious objects such as gold, silver etc.6. Mutual funds7. Equity SharesBank Deposits, Post Office Savings Schemes, Public Provident Fund, Company Fixed

Deposits and Stock Market options like Bonds and Debentures, Mutual Funds, Equity Shares

etc., Of the various types of investment options in the Stock Market, Gold Exchange Traded

Funds (Gold ETFs) happens to be one of the best options to be included in the portfolio for

diversification of risk.

The idea of Gold ETF was first conceptualized by Benchmark Asset Management Company

Private Ltd. in India, when they filed a proposal with the SEBI in May 2002. However, there was

no regulatory approval then and later it was launched in March 2007.

The first Gold Exchange-Traded Fund was actually launched in March 2003 on the

Australian Stock Exchange under Gold Bullion Securities (ticker symbol "GOLD"). Graham

Tuckwell, the founder and major shareholder of ETF Securities, was behind the launch of this

fund. The emergence of Gold ETFs in India is tabulated in Table 1. In this context, the study is

undertaken to assess the importance of Gold ETFs in India.

In India one can gain additional benefit by investing through mutual funds tax savings.

Investment in certain types of funds such as Equity Linked Tax Savings Schemes (ELSS) allows

for certain amount of income tax benefits.

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1.2 Overview Of Gold In India

The yellow metal is a symbol of wealth and good fortune in India, and the country has a

long history of gold buying. To understand Indias affinity towards gold, one must understand

the nation itself, where the purchase of gold has been entwined with Indias religious and culturalbeliefs. Unlike other nations, love of gold has transcended generations of Indians across the

social strata. Gold jewellery is not only considered an ornament but also an investment and store

of value. In fact we are always identified the yellow metal as a form of money and a means for

wealth accumulation.

Currently India holds more than 18000 ton of gold. At todays price level, that is nearly

worth Rs. 50lacs cr. Our nation continues to be the worlds largest gold market, and has

expanded significantly since liberalization. It constituted 32% of global gold jewellery and bar &

coin demand in 2010. Gold jewellery contributes around 75% of Indias total gold demand, and

the rest is accounted for by investment (23%) and decorative, technology and industrial (2%)

Gold demand is well distributed across India, with the four southern states (Tamil nadu,

Kerala, Andhra Pradesh, Karnataka) accounting for more than 40% of the nations overall

demand. The remaining is divided among the western (25-30%), northern (20-25%), and eastern

(10-15%) regions of the country. Despite being the largest source of gold demand, Indias

jewellery consumption intensity is till relatively low, at 0.40gram (as on 2009). We foresee

larger per capita gold consumption over the next decade as the nations favorable demographics

and age profile are likely to ensure buoyant consumption growth.

Gold plays a fundamental role in India for marriage ceremonies, and is considered a

necessity rather than a luxury. The gold (along with other gifts) that a bride receives is called

STREEDHANAM and is a means of passing some of the family inheritance to daughters, as

Hindu tradition dictates that family assets can only be passed down to sons. Thus, weeding

related demand makes up a substantial proportion of overall jewellery demand, particularly in

south India. Given the nations young population, approximately 15million wedding are

expected every year over the next decade. And with gold being an integral part of these wedding,

we are looking at incremental demand of about 500 ton every year, along with another 500 ton

of existing gold being gifted by one family to another.

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Indias gold investment revolution is gathering pace given its strong affinity towards this

tangible source of wealth. Given the yellow metals importance as a safe haven in troubled times,

characteristics of diversification and hedge against inflation, it is increasingly making its way

into investment portfolios today. In recent years many gold based financial instruments have

been launched, including GOLD ETfS, Gold linked structured products, and bullion schemes,

apart from schemes like the India post gold retail programme and gold linked microfinance

schemes.

Over the last ten years, Indias gold demand has risen at an average rate of 13% every

year, outpacing the countrys real GDP growth by almost 6% points. While estimates may vary,

the board consensus is that gold demand in India is likely to increase nearly 30% to touch 1200

ton by FY21. And India will continue to be the largest buyer and holder of gold in the world.

Advantages Of Gold Etfs

It can be easily sold in the secondary market on a real time basis (i.e at theprevailing market price)

Investor do not have worry about the storage and security It is ideal for retail investor as minimum lot size to trade is one unit on secondary

market

ETFs have a transparent pricing mechanism Gold ETFs assure purity of gold as per SEBI regulations, the purity of

underlying gold in Gold ETFs should be 0.995 fineness

1.3Statement of the Problem

India is one of the largest consumers of gold. Nearly 800 ton of gold is imported every

year. Indians account for 23% of the worlds total annual demand for gold. While conventional

investment options like jewellery, gold bars and coins still exist, Gold ETFs are another effective

way to invest in the yellow metal.

The study aims is mainly related give awareness about GOLD ETFs The survey of

Literature indicates that not much research work has been done on GOLD ETFs. Hence the

study is undertaken fill the research gap with the following objectives.

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1.4 Objectives Of The Study

To make the investor realize that the GOLD ETF is a strong asset class To stress upon the inclusion of GOLD ETF in a portfolio of risk diversification To assist the investor in selection of the best GOLD ETF option To identify the price fluctuations of Gold ETFs in Stock market To suggest better ways and means for the investors to enhance the knowledge about

GOLD ETFs investment in secondary market.

1.5 scope of the study

The most actively traded securities in NSE and S&P CNX nifty indices are only taken as

Gold ETFs were initially launched on National Stock Exchange of india

1.6Limitation Of The Study

The time period of the study was confined only for a few months. The return on Gold ETFs may be hampered due to factor such as entry loads & annual

fund management charges levied by the fund house on the funds NAV

Gold ETFs are made up of gold contracts and derivatives and can be redeemed for cash,never for gold itself.

The tools used for the study such as correlations, standard deviation, co-efficient ofvariation, beta, Sharpe have its own limitation which in turn affects the result of the

study

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1.7Research MethodologyResearch methodology is the systematic way to solve the research problem. It gives an

idea about various steps adopted by the researcher in a systematic manner with an objective

to determine various manners

Research Design

A research design is considered as the framework or plan for a study that guides as well

as helps the data collection and analysis of data. The research design may be exploratory,

descriptive and experimental for the present study. Descriptive research design is adopted for this

project.

SAMPLING DESIGN

.The Gold ETFs Mutual funds companies in india;

1.1 Table 1 shows the Gold ETFs Mutual Fund companies in india

Gold ETF Fund Launch Date

Gold Bees March 2007

UTI Gold ETF April 2007

Reliance Gold ETF November 2007

Quantum Gold ETF February 2008

SBI Gold ETF May 2009

Religare Gold ETF March 2010

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For the analysis, the top performing Five mutual fund Gold ETFs fund were selected. They arelike.

1.2 Table 2 Selected Five Performing Gold ETF Mutual Fund companies In India

S.NO FUND LAUNCH

DATE

UNIT SIZE SYMBOL AT BSE

1 UTI GOLD ETF April 2007 Approx. 1Gram GOLD SHARE

2 Reliance GOLD ETF November 2007 Approx. 1Gram

REL GOLD

3 Quantum GOLD ETF February 2008 Approx.1/2Gram

QGOLD HALF

4 SBI GOLD ETF May 2009 Approx. 1Gram

SBI GETS

5 Religare GOLD ETF March 2010 Approx. 1Gram

RELIGARE GOLD

SAMPLE SIZE

The sample size for this study is Five mutual fund Gold ETFs from the total population

of 13 mutual fund Gold ETFs companies.

PERIOD OF STUDY

The study was conducted for the period 2 months.

AREA OF THE STUDY

The Five Mutual fund Gold ETFs companies NAV movements. The period of study is

only for two years from the year of 2010 jan to 2012-jan.

Gold ETFs: concept

India is one of the largest consumers of gold. Nearly 800 ton of gold is imported every

year. Indians consumes for 25% of the worlds total annual demand for gold. While conventional

investment options like jewellery, gold bars and coins still exist, Gold ETFs are another effective

way to invest in the yellow metal.

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Exchange-Traded Fund (ETF) is a security that tracks an index, a commodity or a basket

of assets like an index fund, but trades like a stock on an exchange at approximately the same

price as the net asset value of its underlying assets/commodity over the course of the trading day.

Gold ETF is an open ended exchange traded fund, 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. A Gold ETF is designed to provide

returns that, before expenses, closely correspond to the returns provided by domestic price of

Gold. However, the performance of the scheme may differ from that of the domestic prices of

Gold due to the expenses and/or the other related factors. All gold bullion held in the schemes

allocated account with the custodian shall be of fineness (or purity) of 995 parts per 1000(99.5%)

or higher.

An Individual who is a resident of India, Non Resident Indian, Foreign Institutional

Investor registered with SEBI, Banks and Financial Institutions, Companies, Trusts and

Cooperative Societies, Partnership Firms, a HUF, Mutual Fund registered with SEBI, etc., can

invest in Gold ETFs. A Demat account and registration with the broker (member of BSE) is

mandatory for the investors willing to invest in Gold ETFs.

GOLD ETF VS PHYSICAL GOLD

Many investors buy a gold bullion ETF to capitalize on golds price movements. So what

is a gold ETF vs. bullion and how does buying an ETF differ from actually buying physical

gold?

A gold bullion ETF is simply an exchange traded fund that tracks the price of physical

gold. If the price of gold goes up 10%, the ETF will go up the same proportion and if the gold

price goes down 10%, again the ETF will follow. Each ETF share normally represents one-tenth

of an ounce of gold bullion.

Now before deciding to buy a physical gold ETF, there are a few things you should know

about them. Firstly, like all ETFs there is a MER (management expense ratio) involved to cover

the costs of managing the fund. Luckily however the fee is typically very low (~0.4%) compared

to other types of funds.

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Another key point about an ETF gold bullion share is that unlike buying physical gold

coins or bars, you dont actually own physical gold by owning a gold ETF share. Yes, you own

shares in gold, but not the gold itself. Is that a problem? Well yes and no. Its not a problem at

all if all youre wanting to do is profit from price movements in gold. In fact buying a physical

gold ETF is perfect for capitalizing on gold price movements since like all ETFs, its simply a

stock traded on a major stock exchange which can be bought and sold easily. However, if your

primary reason for buying gold is to hedge yourself from a large wide-scale monetary crises, you

would be wise to consider buying physical gold bullion rather than the ETF, or at least in

addition to it.

The reason I say this is because if there was a large scale monetary crises in the US, let

alone worldwide, its very possible the banking institutions that are controlling these Gold

Bullion ETFs could become bankrupt or insolvent. As a result they would likely end up

liquidating the ETF and you would end up with no gold bullion and very little cash for your

shares, if any.

Now Im not saying this is likely to happen, but if youre a gold bug, you have to

consider why you want to own gold and Im sure one of the main reasons is to hedge your risk

from fiat currencies.

GOLD ETFS: A STRONG ASSET CLASS

In the times of growing uncertainty about the global economy, volatility in the equity

markets and the weakening of Indian Rupee against the US Dollar has set the gold prices soaring

to record highs, hugely benefiting the investors of Gold Exchange Traded Funds (ETFs).

In the last few years, the gold price showed an increasing trend and has touched Rs.

29,000 per 10 gms. The Volatility in gold prices is very less as compared to equities market

instilling confidence in the minds of investors to possess gold as an asset.

GOLD ETFS: RISK DIVERSIFICATION

Investment in gold is considered as a best way to mitigate the risk and hedge the

portfolio. Small allocation (5 - 15%) of gold improves the consistency of portfolio performance.

The purpose of diversification is not to increase the returns, but to reduce the risk. The aim is to

protect the value of portfolio against the fluctuations in any class of asset and this purpose is

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achieved when the different asset classes in a portfolio have either low or negative correlation

with each other. Gold serves this purpose well by diversifying and stabilizing the portfolio and

protecting it against the stock market fluctuations.

DATA SOURCES

Data was collected from secondary sources. The source are secondary data was collected

from journals, magazines and Internet. The data has been collected from the nseindia.com,

mutualfundsindia.com, Amfiindia.com, moneycontrol.com, karvy.com, karyfinapolis.com.

RESEARCH TOOLS

1. Correlation2. Standard deviation3. Co- efficient of variation4. Beta5. Sharpe

Candle Stick Chart

A candlestick chart is an enhanced version of a bar chart. These chart began to appear in

the united states in the mid 1980s such a chart a stock open, close, high, and low in a

modified three dimensional format. The vertical axis shows stock price, while the horizontal

axis reflects the passage of time. The principal difference between a daily candle stick chart and

a bar chart are the white & black candles augmenting the daily trading range lines. If the opening

price exceeds the closing price (the stock is down for the day) the body of the candle is black

when the stock is up (the close exceeds the open). The candle is clear white candle representsstock advances with black candles representing declines. The stick portion of an entry is called

real body with the vertical line representing the wick various clusters of candles have exotic

names such as dark cloud cover, doji star, hanging man, harami cross and two day tweezer tops

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Correlation:

A correlation is a single number that describes the degree of relationship between two

variables. To analyze the strength of the relationship of co variation between two variables, this

statistical technique Correlation Analysis is used.

The formula for the correlation is:

r=

)()()((

)(

2222

yyNyxN

yxXYN

The correlation should be between -1 to +1.

We use the symbol rto stand for the correlation.

If r = 1 it is perfect correlation

r > 1 it is positive correlation

r < 1 it is negative correlation

Standard Deviation:

Standard Deviation is a statistical tool, which measures the variability of returns from the

expected value, or volatility. It is denoted by sigma(s). It is calculated using the formula

mentioned below:

= ((x- ) )

N

Where, is the sample mean, xs are the observations (returns), and N is the total number of

observations or the sample size

Beta:

The Beta measure the movement of one scrip in relation to the market trend. Beta can be

positive or negative depending on whether the individual scrip moves in the same direction as

the market or in the opposite direction.

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The Beta is negative, if the fund value moves contrary to the general trend and positive if

it moves in same direction. The scrips which are having a high Beta of more than 1 are called

aggressive, and those with a low Beta of less than 1 are called defensive.

It is calculated using the formula mentioned below:

Nxy - X*Y

= Nx2 - (x)2

X = P-Po*100

Po

Y = P-Po*100

Po

Beta is the sensitivity of a stock's returns to the returns on some market index. Beta

values can be roughly characterized as follows:

Beta equal to 0

Cash under your mattress, assuming no inflation

Beta between 0 and 1

Low-volatility investments (e.g., utility funds)

Beta equal to 1

Matching the index

Beta greater than 1

Anything more volatile than the index (e.g.,new mutualfunds)

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Sharpe Ratio (SR)

The Sharpe ratio was developed by Bill Sharpe (1966) to measure risk adjusted

performance. It is calculated by taking the portfolio fund returns Rp net of R, is the risk free rate

of return and dividing it by the standard deviation of the fund returns. This gives the return abovethe risk free rate of return per unit of the risk involved.

SR = (portfolio return risk free return)/standard deviation

The higher the SR, the better is the fund's return per unit of risk.

The Sharpe ratio tells us whether a portfolio's returns are due to smart investment

decisions or a result of excess risk. This measurement is very useful because although one

portfolio or fund can reap higher returns than its peers, it is only a good investment if those

higher returns do not come with too much additional risk. The greater a portfolio's Sharpe ratio,

the better its risk-adjusted performance has been. A negative Sharpe ratio indicates that a risk-

less asset would perform better than the security being analyzed.

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Chapter 2

INDUSTRY PROFILE

2.1 The Mutual Funds Industry in India

The beginning of mutual funds in India was laid by the enactment of the Unit Trust of

India (UTI) Act in 1963. The objective was to provide investors from the middle and lower

income groups with a route to invest in the equity market. It was also meant to encourage

savings. UTI brought out its first fund, Unit Scheme (US) 64 in 1964. It called an amount of

Rs.246.7 million. UTI remained a monopoly in the mutual fund industry till 1987. By then US 64

had grown to Rs.32.69 billion and the overall asset base of UTI was RS.67.38 billion with 25

different schemes In 1987 other public sector banks were allowed to offer mutual funds. The

State Bank of India (SBI) set up the SBI Mutual Fund and Canara Bank Mutual Fund. Other

public sector banks such as Bank of India, Punjab National Bank, Indian Bank entered the fray

by 1990. Two public sector insurance companies - Life Insurance Corporation of India (LlC) and

General Insurance Corporation of India (GIC) also started their own mutual fund companies. But

during this period only public sector companies were permitted to enter the mutual fund market.

The collective assets under management continued to grow and by the end of 1993 it was Rs.470

billion with UTI alone accounting for RS.390 billion' There were 44.7 million investors in

mutual funds".1992-93 saw the beginning of economic reforms in India. The reforms aimed at

reducing government control over the economy and allowing for greater

play for the private sector besides others. In keeping with this direction the private sector was

allowed to enter the mutual fund industry in 1993. In keeping with this direction the private

sector was allowed to enter the mutual fund industry in 1993. In the same year the first mutual

fund regulations 1993 SEBI (mutual fund) Regulations came into being. This was later

substituted by a more comprehensive set of regulations - SEBI (mutual fund) Regulations 1996.

However, UTI did not come under these regulations and continued to be governed under the UTI

Act of 1963. By 2003 the total assets under management (AUM) had increased to Rs.1,218

billion 33 mutual fund families and 401 funds. UTI alone accounted for Rs.445 billion of the

total AUM9

.

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In 2003 the public sector UTI, which had faced serious problems in the late 90's and

again during 2002, was special into two entities. One was the specified undertaking of UTI

which managed US 64, assured return schemes and others which totaled to Rs.298.4 billion and

the other was UTI Mutual Fund Ltd'. The latter came under the regulations of SEBI. Since 2003

the mutual fund industry has also seen a spate of mergers. Hence this period was marked by

consolidation. By March 2007 the total AUM excluding UTI touched Rs.3,591 billion showing a

phenomenal growth of 47 percent year-on-year since 2003". During this period only Russia and

China did better than India AUM growth rates of 97 percent and 67 percent, respectively".

2.2 Types of Mutual Funds

A mutual fund say, Mutual Fund, can have several 'funds' called 'schemes' in India under

its management. These different funds can be categorized by structure, investment objective and

others. It would be well illustrated by the following flow chart:

Mutualfund

openend

fund

Closeend

Fund

Growth

Dividend

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2.2.1 Structure of mutual funds

An 'Open end' fund is available for purchase or redemption on continuous basis at the

day's closing Net Asset Value (NAV). This gives liquidity to investments.

A 'Close end' fund is open for investment only during the Initial Public Offer (IPO) after

which the investment is locked in until the maturity date which could be between 3-7yrs. The

investor can, however, sell or buy the shares of the funds on the stock exchange where the shares

are listed.

Interval funds combine the characteristics of both 'open end' funds. They can be bought

or redeemed by the investor at predetermined times, say once in six or twelve months.

2.2.2 Investment objective of mutual fund

'Growth' oriented funds aim at providing capital appreciation. They tend to invest

primarily in equities. 'Income' funds aim at providing regular income to investors. They generally

invest a major portion of their assets in fixed income earning instruments such as goverment

securities, corporate bonds and money market instruments. Their returns are determined by

fluctuations in interest rates.

A 'Balanced fund' tries to provide both capital appreciation and regular income. They

invest in both equities and fixed income securities. They specify the maximum equity exposure

in the prospectus and is normally 60 percent; of late other types of balanced funds such as "Asset

Allocation funds and 'Arbitrage funds' have also emerged. Asset allocation funds, such as the

Franklin Templeton (FT) PE ratio fund, allocate funds to equity or debt depending on the

dynamic situation. They tend to increase exposure to equity during a market downturn and move

out during market peaks. The FT PIE ratio fund uses the market PIE ratio to determine the

degree of equity exposure.

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2.2.3 Special schemes in mutual fund

Tax saving funds give an investor tax benefits under section 80 C of the Income Tax Act.

Such funds also termed as Equity Linked Saving Schemes (ELSS), have a lock in period of three

years. By investing in such funds a person can avail of a maximum of rupees one hundred

thousand in tax deductions. ELSSs are normally diversified equity funds.

Exchange Traded Fund's (ETF) are relatively a new concept in India. Such funds are

essentially index funds that are listed and traded on the stock markets. There are some

commodities ETFs are also traded in stock market.

2.2 Overview of ETFs

Exchange Traded Fund (ETFs)

Exchange Traded Fund is a security that tracks an index, a commodity or a sector like an

index fund or a sector fund but trades like a stock on an exchange. It is similar to a close-ended

mutual fund listed on stock exchanges.

Currently there are three types of ETF's which can be traded in BSE. These are :

Equity ETF's. Gold ETF's. Liquid ETF's.

Gold ETFs

Gold ETF is a special type of Exchange traded fund that tracks the price of gold.

Currently there are six gold ETF's which can be traded in BSE & NSE.

ETFs trade

ETF's can be bought / sold just like stocks through trading terminals anywhere across thecountry.

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Advantages of ETFs

Instant exposure to a well-diversified portfolio or an asset class. Real-time buying and selling of ETF units throughout the trading hours just like

any other equity scrip. Most ETFs have a lower expense ratio than comparable mutual funds. Not only

does an ETF have lower shareholder-related expenses, but because it does not

have to invest cash contributions or fund cash redemptions, an ETF does not have

to maintain a cash reserve for redemptions and saves on brokerage expenses.

No sales load for investor. Only normal brokerage charges apply. Low tracking error- ETF's trade close to their NAV's unlike substantial premiums/

discounts associated with close-ended funds that trade on the bourses.

Tax efficient instrument, capital gains taxes for investors of ETF tend to be muchlower than those in mutual funds due to in-kind creation and redemption process.

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HISTORY OF STOCK EXCHANGE

The first organized stock exchange in India is the Bombay stock exchange (BSE), which

was established in 1875. But trading in securities used to take place much earlier in the 18th

century. The advent of western styled business practices in India in the early 18th century

commenced with the establishment of the East Indian Companys office in India. By the 1830s,

there was a perceptible rise in the volume of business in loans of corporate stocks and shares.

In 1836s the Englishman of Calcutta reported quotations of 4%, 5% and 6% loans of

east India Company as well as shares of bank of Bengal. Shares of bank like the corporation

bank, the chartered mercantile Bank, the chartered bank, the oriental bank and the bank

of Bombay were traded. "Between" 1840-50, banks recognized about half a dozen brokers and

merchants in Bombay.

By the mid 19th century railways were extended, telegraph was introduced and hence

communication expanded. Internal traded and commerce gradually improved and broadened.

Brokerage businesses become attractive and in 1860 there were 60 brokers. Their acknowledged

leader was Premchand Roychand who was the first broker to the read and speaks English. He

was called Napoleon of finance

STOCK EXCHANGE:

Stock exchanges contribute in a huge measure to the growth and expansion of

national business and to the ultimate benefit and well being of the national economy and

its people. A stock exchange provides an organized market place for the investors to buy

and sell securities freely. The market offers perfectly competitive conditions where a

large number of sellers and buyers participate.

Meaning:

A specialized marketplace that facilitates the exchange securities that already

exist is knows as a Stock exchange or Stock market.

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Definition:

Stock exchange or securities market comprises all the places where buyers and sellers of

stocks and bonds or their representatives undertake transactions involving the sale of securities

- Hastings

NATIONAL STOCK EXCHANGE OF INDIA (NSE):

In the fast growing Indian financial market, there are 23 stock exchanges trading

securities. The National Stock Exchange of India (NSE) situated in Mumbai - is the largest and

most advanced exchange with 1016 companies listed and 726 trading members. The group of

leading financial institutions such as Indian Bank or Life Insurance Corporation of India owns

the NSE.

The NSE is one of the few exchanges in the world trading all types of securities on a

single platform, which is divided into three segments: Wholesale Debt Market (WDM), Capital

Market (CM), and Futures & Options (F&O) Market. Each segment has experienced a

significant growth throughout a few years of their launch. While the WDM segment has

accumulated the annual growth of over 36% since its opening in 1994, the CM segment has

increased by even 61% during the same period.

The National Stock Exchange of India has stringent requirements and criteria for the

companies listed on the Exchange. Minimum capital requirements, project appraisal, and

company's track record are just a few of the criteria. In addition, listed companies pay variable

listing fees based on their corporate capital size. The National Stock Exchange of India Ltd.

provides its clients with a single, fully electronic trading platform that is operated through a

VSAT network.

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A Brief Account About The Five Mutual Fund Gold ETF Companies

UTI

Unit Trust of Indiais a financial organization in India, which was created by the UTI

Act passed by the Parliament in 1963. For more than two decades it remained the sole vehicle

for investment in the capital market by the Indian citizens. In mid- 1980s public sector banks

were allowed to open mutual funds. The real vibrancy and competition in the MF industry came

with the setting up of the Regulator SEBI and its laying down the MF Regulations in 1993.UTI

maintained its pre-eminent place till 2001, when a massive decline in the market indices and

negative investor sentiments after Ketan Parekh scam created doubts about the capacity of UTI

to meet its obligations to the investors. This was further compounded by two factors; namely, its

flagship and largest scheme US 64 was sold and re-purchased not at intrinsic NAV but atartificial price and its Assured Return Schemes had promised returns as high as 18% over a

period going up to two decades.

Fearing a run on the institution and possible impact on the whole market Government

came out with a rescue package and change of management in 2001.Subsequently, the UTI Act

was repealed and the institution was bifurcated into two parts .UTI Mutual Fund was created as a

SEBI registered fund like any other mutual fund. The assets and liabilities of schemes where

Government had to come out with a bail-out package were taken over directly by theGovernment in a new entity called Specified Undertaking of UTI, SUUTI. SUUTI holds over

27% stake Axis Bank. In order to distance Government from running a mutual fund the

ownership was transferred to four institutions; namely SBI, LIC, BOB and PNB, each owning

25%. Certain reforms like improving the salary from PSU levels and effecting a VRS were

carried out UTI lost its market dominance rapidly and by end of 2005,when the new share-

holders actually paid the consideration money to Government its market share had come down to

close to 10%!

A new board was constituted and a new management inducted. Systematic study of its

problems role and functions was carried out with the help of a reputed international consultant.

Fresh talent was recruited from the private market, organizational structure was changed to focus

on newly emerging investor and distributor groups and massive changes in investor services and

funds management carried out. Once again UTI has emerged as a serious player in the industry.

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Some of the funds have won famous awards, including the Best Infra Fund globally from Lipper.

UTI has been able to benchmark its employee compensation to the best in the market, has

introduced Performance Related Payouts and ESOPs.

The UTI Asset Management Company has its registered office at: UTI Tower, Gn Block,Bandra Kurla Complex, Bandra (East), Mumbai- 400 051.It has over 70 schemes in domestic

MF space and has the largest investor base of over 9 million in the whole industry. It is present in

over 450 districts of the country and has 100 branches called UTI Financial Centres or UFCs.

About 50% of the total IFAs in the industry work for UTI in distributing its products! India

Posts, PSU Banks and all the large Private and Foreign Banks have started distributing UTI

products. The total average Assets Under Management (AUM) for the month of June 2008 was

Rs. 530 billion and it ranked fourth. In terms of equity AUM it ranked second and in terms of

Equity and Balanced Schemes AUM put together it ranked FIRST in the industry. This measure

indicates its revenue- earning capacity and its financial strength.

Besides running domestic MF Schemes UTI AMC is also a registered portfolio manager

under the SEBI (Portfolio Managers) Regulations. It runs different portfolios for is HNI and

Institutional clients. It is also running a Sharia Compliant portfolio for its Offshore clients. UTI

tied up with Shinsei Bank of Japan to run a large size India-centric portfolio for Japanese

investors.

Quantum

Quantum Mutual Fund is Indias first dedicated, direct-to-investor mutual fund.QuantumSetting up a mutual fund to invest in India was an idea that Ajit Dayal the founder of Quantum

had when he was studying in USA in 1983.

Not being smart enough to be a doctor or a scientist, Ajit was keen to pursue a career in

the field of investments.

And Ajit had a strong desire to come back home to India and do something to change

India. His stay in the US exposed him to the world of mutual funds.

Though India had the Unit Trust of India then a government monopoly, which was a

mutual fund it was sold more like an investment in a fixed deposit.

Investors were promised a dividend by the agents.

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No one knew what the true value of the underlying portfolio of UTIs Unit Scheme 1962

was. Sadly, this mis-selling and mis-declaration of the value of the UTI Funds finally led to its

blow up in 2001 and a huge blow to investor confidence. (The existing UTI Mutual Funds rose

from the ashes of the old UTI.)

Ajit decided to get into the financial services business a business where there was no

corruption and which would be a clean business. But converting the dream to a reality took over

25 years.

While waiting to qualify for a mutual fund license to launch mutual funds, Ajit continued

to gain knowledge and experience (and, yes, the common sense!) under the umbrella of Quantum

Advisors.

Quantum Advisors is the Sponsor and parent company of Quantum Asset ManagementCompany and the Quantum Mutual Funds.

From 1992 to 1995, Ajit and Quantum were the local partners of Jardine Fleming in

India, then one of the largest FIIs in India.

Between 1996 and 2004, Ajit and Quantum managed money for various FIIs. Ajit was

also the Deputy Chief Investment Officer of Hansberger Global Investors, Inc (a US-based

company with over USD 5 billion of assets under management with more money invested in

stock markets worldwide than what UTI had invested in Indian stock markets).

RELIGARE ENTERPRISES

Religare Enterprises Ltd. is an Indiabased financial servicescompany with operations

around the globe. Commonly referred to as Religare, the company offers a range of financial

services through its group companies. The services offered includebroking, insurance, asset

management, lending solutions,investment bankingand wealth management. Serving over a

million clients, Religare has around 15 billion dollars of assets under management.

The Religare group of companies include Religare Capital Markets, Religare Securities,

Religare Broking, Religare Online, Religare Finvest, Religare Finmart, Religare Insurance,

Religare Health Insurance, Aegon Religare, Religare Mutual Funds, Religare Macquire,

Milestone Religare, Religare Art and Vistaar Religare.

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Religare Asset Management Company Limited

With an average asset base of over INR 118bn (for the quarter ending December 2011),

Religare Asset Management aims to serve investment needs of individual investors, corporate

and institutions through mutual funds and sub-advised portfolios. Our product portfolio ismanaged by individually focused management teams to create optimum balance and results. We

are committed to providing financial care and top class service. We subscribe to sustainable

business models and processes that factor in the dynamism of the business in fast changing

market scenarios. Investors can expect best-in-class investment products that will leverage on

our expertise and global resources available with the Religare Group.

Religare is an emerging markets financial services group with a presence across Asia, Africa,

Middle East, Europe, and the Americas. In India, Religares largest market, the group offers a

wide array of products and services including broking, insurance, asset management, lending

solutions, investment banking and wealth management. With 10,000-plus employees across

multiple geographies, Religare serves over a million clients, including corporate and institutions,

high net worth families and individuals, and retail investors.

Reliance

Reliance Anil Dhirubhai Ambani Group(usually referred as Reliance Group) is one

of India's largest conglomerates, headquartered inNavi Mumbai, India. The company, which

was formed after Dhirubhai Ambani's business empire was divided up, is headed by his younger

son Anil Ambani. It has a market capitalizationof US$ 15 billion, net assets US$ 7 billion. The

ADAG Reliance Group has a business presence that extends to over 20,000 towns and 4.5 lakhs

(450,000) villages in India, and across the globe. The shareholder base is over 12 million, among

the largest in the world. The group is present in many sectors including Telecom, Capital, Power,

Infrastructure, Entertainment and Health.

Reliance Capital (Rel Cap)has interests in asset management and mutual funds, life and

general insurance, private equity and proprietary investments, stock broking, depository services,

distribution of financial products, consumer finance and other activities in financial services.

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Reliance Mutual Fundis India's largest mutual fund. Reliance General Insurance is a

general insurance company and among the top 3 private sector insurers. Reliance Money is

brokerage and distributor of financial products in India with over 2.7 million customers and has

the largest distribution network. Its brokerage, arm Reliance Securities is planning to invest Rs

300 crore (Rs 3 billion) for upgrading infrastructure, hiring staff and enhancing the capability of

its online trading platform.

STATE BANK OF INDIA

The Bank is actively involved since 1973 in non-profit activity called Community

Services Banking. All our branches and administrative offices throughout the country sponsor

and participate in large number of welfare activities and social causes. Our business is more than

banking because we touch the lives of people anywhere in many ways.

State Bank of India, the countrys largest commercial Bank in terms of profits, assets,

deposits, branches and employees, welcomes you to its Investors Relations Section. SBI, with

its heritage dating back to the year 1806, strives to continuously provide latest and upto date

information on its financial performance. It is our endeavor to walk on the path of transparency

and allow complete access to all the stakeholders enabling total awareness about the Bank. The

Bank communicates with the stakeholders through a variety of channels, such as through e-mail,

website, conference call, one-on-one meeting, analysts meet and attendance at Investor

Conference throughout the world. SBI has always been fundamentally strong in its core business,

which is mirrored in its results year after year.

SBI mutual fund is a bank sponsored mutual fund and has a base of 3 million investors.

SBI mutual fund is a result of joint venture between State bank of India and Society General

Asset Management of France. Thirty-two schemes have been launched since the inception of SBI

mutual fund and out of these thirty-two, fifteen schemes have been successfully redeemed. As ofthe present scenario, the SBI mutual fund manages assets worth over Rs. 17000crores.

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COMPANY PROFILE

ABOUT RRD

The company, originally known as R.R. Donnelley & Sons Company, was founded in 1864 by

Richard Robert Donnelley. RR Donnelley(NASDAQ: RRD) is a Fortune 500company that provides

print and related services. Its corporate headquarters are located at 111 S. Wacker Drive,Chicago, Illinois,

USA. RR Donnelley's cartographicproduction facility was for many years one of the largest in the United

States.

Business Acquisitions and Mergers

Throughout its history, particularly in the 1990s and 2000s, RR Donnelley purchased a numberof other companies outright, steadily increasing in size. In February 2004, RR Donnelley mergedwithMoore Wallace Inc., keeping the name RR Donnelley as the name of the combined companies. Donnelleywent on to purchase Office Tiger, a major publishing and financial outsourcing company, as well as

printing company Banta Corporationin 2007. In May 2007, RR Donnelley also acquired book andeducational materials printer Von Hoffmann(and creative/ pre-press subsidiary Anthology Inc.)from Visant Corporation. An additional purchase at the beginning of 2007 was Perry Judd's Holdings Inc.,a private catalog and magazine printer. At the beginning of 2008, RRD also announced the acquisitionof Pro Line Printing, Inc. As of 2007, RR Donnelley is the world's largest commercial printer.

In 2007, RR Donnelley was also named as an interested party in an attempt to purchase QuebecorWorld. In May 2009, the company tendered an unsolicited bid to purchase Quebecor World.

In July 2008, the company established a multi-year contract with F+W Publications Inc., whichwill allow Donnelley to print a large amount of F + W'sbookand magazinepublications. The contract isvalued at about $80 million.

In 2010 and 2011, RR Donnelley acquired Bowne & Co., San Francisco-based NimblefishTechnologies, and Helium.com.

During the Labor Day weekend in September 2011, RR Donnelly announced it would closeits Bloomsburgprinting plant wherePenguin Classicsand paperbacks in the best-selling Twilightand Idiot's Guideseries are published.

Financial Services

RR Donnelley Financial Services provides a range of solutions to address all your business communicationneeds. In addition to traditional financial printing services for the capital and investment markets, we offerindustry-leading judgment-based outsourcing and real estate services.

Capital Markets

We partner with corporate counsels, officers and directors, as well as securities lawyers,investment bankers and accountants to create, manage, produce and deliver transaction and compliancedocuments to provide a full range of financial service communication solutions to support the complexregulatory requirements of capital markets.

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Investment Markets

We deliver useful decision-making tools to your investors and manage key elements of overallcommunications for investment funds, insurance companies, and variable annuities through our seamless,efficient and timely adherence to SEC rules and regulations.

Outsourcing Services

We offer you a full range of outsourced services to complement your internal capabilities. These servicesare designed to meet the support needs of financial, corporate and professional services.

Real Estate

We provide services from commercial to residential, from debt to equity. Only RR Donnelley can providethe low-cost, high-value support that the largest players in real estate industry rely on to remain

competitive.

Translations

Our robust translation and multilingual services help your business meet its communication needs in theareas of financial services, life sciences, and corporate communications.

Our efforts add value to you and your company through highly personalized around-the-clock services,worldwide expertise, and insight that comes from a history of experience and achievement. That's whyFORTUNE Magazine has named us America's Most Admired Printer for five consecutive years.

About XBRL

XBRL is a technology language for the electronic communication of business and financial data and isbeing implemented worldwide. XBRL-formatted documents enable greater efficiency, improvedaccuracy and reliability as well as cost savings to those involved in supplying and using financial andbusiness information data.

Primary benefits of XBRL Solutions

Reduces Costs Increases Productivity Improves Data Quality Extends Data Interoperability

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How XBRL works

XBRL is based on XML, a widely accepted standard, and has the ability to tag or code each element ona financial or business report with information such as description, units, currency, etc., so that it is easyto identify and understand for users of the information. All the elements are grouped together into acollection of financial and business reporting terms called a taxonomy. XBRL is extensible, meaningthat the terms available for use can be customized so that companies using XBRL can create their ownelements called "extensions" to describe a unique reporting situation .

XBRL is not an accounting standard and will not change what is reported, only how its reported. TheXML tagging means that the information in a business report is computerreadable and can be more easilyextracted, searched and analyzed by users of that information.

What it can do

XBRL allows for the creation of interactive, intelligent data.Each piece of business information has detailed descriptive and contextual information wrapped

around it, so that the data becomes machine-readable and can be automatically processed andanalyzed.

XBRL allows business reporting information to be reused and repurposed.A financial or business report created once can be used to create many documents in differentformats--HTML, ASCII text, Microsoft Word or Excelwith no loss of accuracy or integrity.

XBRL adds value to every step of an organizations business information reporting.The entire reporting chain of business information -- from data collection through internalreporting and external reporting -- will be made more efficient and accurate and will contain moreuseful data.

XBRL enhances the ability to compare information from one organization or entity toanother,because XBRL lays out a common set of definitions by which all organizations tag their data.

XBRL allows for unique reporting situations,because it can be extended by a single reporting entity by adding special elements that may beneeded to best represent that company.

US GAAP and SEC Activities

XBRL US developed the US GAAP digital dictionary of required disclosures and common reporting

practices under contract with the Securities and Exchange Commission (SEC) and produced the 2008 and2009 releases of the taxonomy. In April 2010, the Financial Accounting Foundation (FAF) took on therole of ongoing support and maintenance. XBRL US works closely with the FAF to support theseefforts. The SEC mandated the use of XBRL for public company reporting and other reportingapplications:

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1. Public Company Reporting all public companies must file in XBRL format; companies withworldwide public float greater than $5 billion to comply starting with period ending June 2009;all other large accelerated filers to comply starting with period ending June 2010; all other publiccompanies comply with period ending June 2011.

2. Risk Return Summary Portion of Mutual Fund Prospectus mutual funds must beginpublishing the risk return summary portion of their prospectuses in XBRL format starting January1, 2011.

3. Credit Rating Agencies must report ratings actions (initial rating, upgrades, downgrades, etc.)in XBRL format.

The SEC and XBRL US have resources available to help public company preparers get educated, identifytools and resources to tag their financials and create their own XBRL-formatted financials.

By using XBRL, Mutual funds and Broking firms can benefitfrom

XBRL brings about transparency, granularity and consistency in companiesfinancial data.

Faster availability of data.

The ability to handle and compare a broader range of companies and deeper set ofinformation.

More powerful software tools for analysis, comparison and benchmarking.

Ease of finding company specific data.

Cost savings in preparation, production & distribution of information.

The ability to select data from a variety of companies within seconds forcomparison and analysis.

Crossfire for SEC Mutual Fund Filers

Rivet's Mutual Fund Package is the solution that combines the experience of our Professional Services

team and the strength of our Crossfire Financial Reporting Platform to put you in control of your XBRL

Mutual Fund Risk/Return Summary mandate from the U.S. Securities and Exchange Commission (SEC).

Rivet has invested over 100,000 hours into our XBRL platform and developed a strong relationship with

the SEC over the past few years. We even created the XBRL rendering engine the SEC uses for theMutual Fund Risk/Return Summary mandate. Some of the key benefits are below:

Rivet's Mutual Fund Package will assist you with all aspects of meeting the SEC's XBRLRisk/Return Summary Mandate.

Cut costs and streamline your technology processes with our XBRL solution. Rivet's solution ensures your Risk/Return Summary rendering matches your filed information

exactly as it was intended.

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You will increase control over your Risk/Return Summary information since the data is pulleddirectly from your source documents no rekeying necessary!

Support your Summary Prospectus processing using XBRL at the same time you meet the Risk/Return Summary mandate.

You can be secure in the knowledge that you are backed by Rivet's outstanding team of Mutual Fund

subject matter experts, and XBRL professionals. Rivets Mutual Fund Package includes the tools and

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REVIEW OF LITERATURE

1. Bakul Chugani Tongia in his article in the website of www.moneycontrol.com haspointed out that, in the month of May 2010 alone, Gold ETFs have clocked in about 8.7%

gains, strengthening its role as a hedge against inflation as well as equity markets as

Sensex has declined by about -5.6% during the same period. He also pointed out that,since the launch of gold ETFs in early 2007, they have emerged as a strong asset class,

generating more than 27% returns (CAGR) in the past three years against the Sensex

returns of just about 4% CAGR during this period. He further corroborated that the

increasing demand for gold is evident from the growth in the Assets under Management

(AUM) of gold ETFs. During the period Apr 2010-May 2010, the AUM of gold ETFs

has surged by nearly 10% from Rs 1,650 crore to Rs 1,815 crore. In fact, the AUM has

risen by more than 100% in the past one year the highest annual growth witnessed by

gold ETFs since their launch three years ago.

2. Dipak Mondal in his article in the website of www.skriec.com suggested that investorsshould take exposure in gold by buying either physical gold, Gold Exchange-Traded

Funds or even units of mutual funds, which invest in the stocks of gold mining

companies. He also added that due to the crisis in the European Union, most currencies

are witnessing high volatility and unless world currencies reach some kind of

equilibrium, prices of gold would continue to go up. In the very short-term, there are

possibilities of a correction but gold, either in physical form or in mutual fund units,

continues to be a very good investment tool.

3. Fisherlists five reasons why the yellow metal remains the most universally accepted andtime-tested asset class. The reasons are Effective Portfolio Diversifier, Thrives underworst conditions, Hedge against inflation, Linkage with oil and US Dollar and Widening

demand and supply Gap. He suggested that gold must be made a part of the asset

allocation because it is a great risk diversifier and considered as a safe haven during times

of economic uncertainty, political strife, high inflation and wars.

4. Fisher in his article in the website of www.goldetf.funds.com mentioned that GoldExchange-Traded Funds (ETFs) have made investing in the yellow metal very convenient

and inexpensive. He expressed that they offer a way of participating in the gold bullion

market without the necessity of physical delivery of gold. He listed out six reasons why

gold ETFs are considered as the best way to invest in the gold. The reasons mentioned

are Wealth tax exemption, Income tax benefit, Investment in small denominations.

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CHAPTER 4

ANALYSIS AND INTERPRETATION

Month wise NAV of UTI Gold ETF fund

4.1 Month wise fund value of UTI Gold ETFS

Date Open price Close price High Low Volume

2010 Jan 1651 1608 1689 1606 263420

2010 Feb 1609 1650 1656 1576 143623

2010 Mar 1651 1609 1678 1536 114545

2010 Apr 1616 1669 1680 1600 98742

2010 May 1676 1767 1823 1665 283292

2010 Jun 1766 1832 1840 1671 119072

2010 Jul 1834 1750 1842 1741 1191262010 Aug 1759 1852 1855 1751 147856

2010 Sep 1860 1883 1894 1801 133099

2010 Oct 1883 1893 1960 1870 328572

2010 Nov 1916 1977 1990 1908 110840

2010 Dec 1985 2012 2039 1985 85063

2011 Jan 2028 1956 2028 1910 190002

2011 Feb 1963 2018 2050 1929 88811

2011 Mar 1991 2012 2060 1985 68687

2011 Apr 2020 2156 2174 2015 111074

2011 May 2185 2195 2199 2122 2180172011 Jun 2182 2138 2199 2132 130285

2011 Jul 2131 2209 2256 2100 619207

2011 Aug 2205 2597 2765 2197 517177

2011 Sep 2644 2527 2775 2500 266088

2011 Oct 2550 2590 2650 2490 159632

2011 Nov 2586 2750 2765 2586 165168

2011 Dec 2775 2608 2790 2578 115951

2012 Jan 2640 2673 2680 2601 83081

Interpretation

The above 4.3 table reveals that 1651 was the opening Fund NAV price in the year Jan

2010 and it was closed with 2673 in the month of Jan 2012. It has an highest price of 2790 in the

month of December 2011.

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4.11 Month wise NAV of UTI Gold ETF fund

0

500

1000

1500

2000

2500

3000

Interpretation:

The above 4.5 chart it is inferred that the NAV has performed well in the month of

August 2011. The candle stick is depicted in white color, with open price low and close price

high. The fund in the month of December 2011 has performed poorly, as the candle stick is

depicted in black color, in the open price high and close price low.

4.12 Month wise return of UTI Gold ETF fund

10.00

5.00

0.00

5.00

10.00

15.00

20.00

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

return

return

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Interpretation



month of August 2011.

4.21 Month wise NAV of Quantum Gold ETF fund

0

200

400

600

800

1000

1200

1400

1600

2010Jan

2010Feb

2010Mar

2010Apr

2010May

2010Jun

2010Jul

2010Aug

2010Sep

2010Oct

2010Nov

2010Dec

2011Jan

2011Feb

2011Mar

2011Apr

2011May

2011Jun

2011Jul

2011Aug

2011Sep

2011Oct

2011Nov

2011Dec

2012Jan

Interpretation:

The above 4.13 chart it is inferred that the NAV has performed well in the month of




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4.22 Month wise return of Quantum Gold ETF fund

10.00

5.00

0.00

5.00

10.00

15.00

20.00

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

return

return

4.2 Month wise fund value ofRELIGARE GOLD ETFS


2010 Apr 1621 1708 1710 1620 1745

2010 May 1698 1850 1870 1560 34893

2010 Jun 1938 1894 1938 1825 26225

2010 Jul 1909 1788 1909 1762 6748

2010 Aug 1784 1900 1923 1779 9781

2010 Sep 1915 1922 1957 1883 3634

2010 Oct 1930 1936 2020 1905 5520

2010 Nov 1988 2044 2050 1783 5352

2010 Dec 2033 2056 2090 2005 2042

2011 Jan 2098 2002 2098 1937 2288

2011 Feb 1990 2075 2134 1981 2013

2011 Mar 2075 2058 2477 2041 2457

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2011 Apr 2055 2220 2225 2055 2205

2011 May 2240 2238 2289 2231 357936

2011 Jun 2220 2196 2248 2111 10706

2011 Jul 2185 2294 2351 2153 75932011 Aug 2312 2669 2885 2207 14487

2011 Sep 2689 2597 2850 2510 13716

2011 Oct 2601 2671 2732 2522 79099

2011 Nov 2670 2843 2879 2670 19375

2011 Dec 2857 2675 2890 2662 6042

2012 Jan 2670 2780 2865 2655 4097

Interpretation

The above 4.8 table reveals that 1621 was the opening Fund NAV price in the year Apr


month of December 2011.

4.31 Month wise NAV of Religare Gold ETF fund

0

500

1000

1500

2000

2500

3000

3500

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Interpretation:

The above 4.15chart it is inferred that the NAV has performed well in the month of




4.32 Month wise return of Religare Gold ETF fund

10.00

5.00

0.00

5.00

10.00

15.00

20.00

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

return

return

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4.3 Month wise fund value ofRELIANCE GOLD ETFS


2010 Jan 1605 1553 1639 1548 378197

2010 Feb 1550 1598 1778 1520 171327

2010 Mar 1608 1561 1778 1555 243713

2010 Apr 1556 1614 1620 1550 235798

2010 May 1625 1740 1798 1611 508768

2010 Jun 1741 1785 1809 1739 161017

2010 Jul 1787 1698 1792 1691 42181

2010 Aug 1713 1805 1810 1697 409927

2010 Sep 1811 1823 1840 1790 165925

2010 Oct 1823 1838 1890 1814 3412602010 Nov 1850 1932 1950 1846 292385

2010 Dec 1935 1947 1970 1911 283920

2011 Jan 1968 1889 2049 1856 216794

2011 Feb 1893 1962 1976 1875 58091

2011 Mar 1968 1963 2050 1945 55564

2011 Apr 1969 2098 2118 1953 80032

2011 May 2129 2117 2133 2050 547112

2011 Jun 2109 2077 2500 2072 95101

2011 Jul 2071 2191 2242 2040 3804902011 Aug 2195 2527 2639 2180 638070

2011 Sep 2555 2456 2725 2406 592135

2011 Oct 2490 2532 2590 2425 617473

2011 Nov 2545 2698 2800 2533 248061

2011 Dec 2716 2549 2744 2515 187309

2012 Jan 2550 2645 2647 2545 152065

Interpretation



month of November 2011.

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4.41 Month wiseNAV of Reliance Gold ETF fund

0

500

1000

1500

2000

2500

3000

Interpretation:





4.42 Month wise return of Reliance Gold ETF fund

10.00

5.00

0.00

5.00

10.00

15.00

20.00

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

return

return

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4.4 month wise fund value ofSBI GOLD ETFS


2010 Jan 1689 1640 1718 1633 41420

2010 Feb 1639 1677 1710 1605 286052010 Mar 1600 1638 1710 1600 26919

2010 Apr 1635 1696 1700 1630 21102

2010 May 1679 1828 1880 1679 113039

2010 Jun 1844 1865 1898 1830 52770

2010 Jul 1869 1776 1875 1731 56039

2010 Aug 1795 1892 1918 1779 54318

2010 Sep 1900 1913 1948 1876 85395

2010 Oct 1914 1937 1980 1900 72363

2010 Nov 1974 2028 2035 1945 69036

2010 Dec 2039 2046 2105 2020 67502

2011 Jan 2050 1989 2075 1946 68506

2011 Feb 1990 1825 2078 1961 45470

2011 Mar 2064 2056 2095 2036 50605

2011 Apr 2054 2196 2225 2053 86258

2011 May 2218 2226 2597 2155 161711

2011 Jun 2223 2175 2243 2136 86526

2011 Jul 2170 2294 2314 2130 166748

2011 Aug 2290 2649 2983 2283 352380

2011 Sep 2677 2537 2849 2550 318131

2011 Oct 2597 2643 2720 2500 194361

2011 Nov 2640 2821 2840 2640 141953

2011 Dec 2842 2668 2868 2618 139966

2012 Jan 2689 2757 2763 2181 86695

Interpretation



month of August 2011.

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4.51 Month wise NAV of SBI Gold ETF fund

0

500

1000

1500

2000

2500

3000

3500

Interpretation:





4.52 Month wise return of SBI Gold ETF

10.00

5.00

0.00

5.00

10.00

15.00

20.00

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

return

return

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II. PRICE FLUCTUATIONS OF GOLD ETF IN SENSEX MARKET

To identify the fund value fluctuation of mutual fund in the stock market, the researcher

using the correlation tools.

Correlation:

A correlation is a single number that describes the degree of relationship between two

variables. To analyze the strength of the relationship of co variation between two variables, this

statistical technique Correlation Analysis is used.

The formula for the correlation is:

r=

)()()((

)(

2222

yyNyxN

yxXYN

The correlation should be between -1 to +1.

We use the symbol rto stand for the correlation.

If r = 1 it is perfect correlation

r > 1 it is positive correlation

r < 1 it is negative correlation

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4.4 NAV Movements ofUTI GOLD ETFs FUND VALUE

Date BSE(X) NAV(Y) X2 Y2 XY

2010 Jan 16915.705 1629.5 286141075.6 2655270.25 27564141.3

2010 Feb 16384.435 1629.5 268449710.3 2655270.25 26698436.83

2010 Mar 16983.11 1630 288426025.3 2656900 27682469.3

2010 Apr 17556.875 1642.5 308243859.8 2697806.25 28837167.19

2010 May 17240.745 1721.5 297243288.2 2963562.25 29679942.52

2010 Jun 17321.86 1799 300046833.9 3236401 31162026.14

2010 Jul 17773.815 1792 315908499.7 3211264 31850676.48

2010 Aug 17941.215 1805.5 321887195.7 3259830.25 32392863.68

2010 Sep 19048.12 1871.5 362830875.5 3502512.25 35648556.58

2010 Oct 20063.22 1888 402532796.8 3564544 37879359.36

2010 Nov 19896.87 1946.5 395885435.8 3788862.25 38729257.46

2010 Dec 20019.54 1998.5 400781981.8 3994002.25 40009050.69

2011 Jan 19474.685 1992 379263355.8 3968064 38793572.52

2011 Feb 18124.29 1990.5 328489888 3962090.25 36076399.25

2011 Mar 18713.75 2001.5 350204439.1 4006002.25 37455570.63

2011 Apr 19299.535 2088 372472051.2 4359744 40297429.08

2011 May 18863.665 2190 355837857.2 4796100 41311426.35

2011 Jun 18686.495 2160 349185095.4 4665600 40362829.2

2011 Jul 18586.08 2170 345442369.8 4708900 40331793.6

2011 Aug 17514.49 2401 306757360 5764801 42052290.49

2011 Sep 16708.715 2585.5 279181157 6684810.25 43200382.63

2011 Oct 16980.49 2570 288337040.6 6604900 43639859.3

2011 Nov 16832.005 2668 283316392.3 7118224 44907789.34

2011 Dec 16005.425 2691.5 256173629.4 7244172.25 43078601.39

2012 Jan 16364.11 2656.5 267784096.1 7056992.25 43471258.22

449299.25 51519 8110822310 109126625 923113149.5

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r=

)()()((

)(

2222

yyNyxN

yxXYN =0.999

From the above 4.13 table the correlation coefficient of UTI gold ETFS NAV with BSE

SENSEX is 0.999. The value is positive and very very nearest to 1. This revealed that the UTI

gold ETFs has perfect positive correlation with BSE index.

4.5 NAV Movements of QUANTUM GOLD ETFS FUND VALUE

Date BSE (X) NAV (Y) X2 Y2 XY

2010 Jan 16915.71 811 286141075.6 657721 13718636.76

2010 Feb 16384.44 813.5 268449710.3 66

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