A Comparative Study on the Performance of Gold ETF and Infrastructure ETF as Against CNX Nifty Index

It is important to diversify a portfolio across different asset classes, since prices of all assets don't move in the same direction. Optimal diversification helps in reducing risk as well as creating wealth to an investor. Exchange Traded Funds (ETFs) are diversified mutual fund portfolios that trade like stocks on the stock exchange. As stock markets are highly volatile and stock picking is difficult for an investor, investing in an ETF is relatively safe. Gold products are considered a highly valuable means of investment in the present scenario of financial markets. Gold ETF have emerged as most successful source for investment in gold. Infrastructure sector in India, which holds the key to our country's fast growing GDP. Investors can participate in the rapidly growing Infrastructure sector through Infrastructure ETF. This paper attempts to compare the performance of Gold ETF and Infrastructure ETF as against market index, CNX Nifty. Return and risk of Gold ETF have been compared with the return and risk of Infrastructure ETF. Monthly Net Asset Values (NAVs) for the period, January 2011 to December 2014 are used for both the schemes. Closing prices of the CNX Nifty are considered. The study concluded that the Gold ETF have lesser variability as compared to the Infrastructure ETF. Gold ETF have performed better than market index and Infrastructure ETF have underperformed market index.