Performance and Hedging Effectiveness of Gold ETFs in India: A Comparative Study with Physical Gold (2019–2024)

Abstract This study examines the performance and hedging effectiveness of Gold Exchange Traded Funds (ETFs) in India compared to physical gold over the period 2019–2024. Using secondary data obtained from the National Stock Exchange, AMFI, and World Gold Council reports, the research evaluates annual returns, volatility, and tracking efficiency of selected Gold ETFs. The objective of the study is to determine whether Gold ETFs provide returns comparable to physical gold and whether they serve as effective hedge instruments during periods of market uncertainty. Descriptive statistics, return analysis, and correlation techniques were applied using MS Excel and SPSS. The findings indicate that Gold ETFs closely track physical gold prices with minor tracking errors and provide liquidity and convenience advantages. During periods of economic uncertainty, gold demonstrated strong hedging characteristics. The study highlights the growing importance of Gold ETFs as an alternative investment instrument in India. Key words: Gold ETF, Physical Gold, Portfolio Diversification, Hedging, Investment Performance, Tracking Error