Abnormal Return of NSE Traded Gold ETFs in Crisis Settings: An Appraisal of Contrarian Versus Momentum Strategies
https://doi.org/10.26794/2587-5671-2024-28-6-69-79
Abstract
This study aims to scan the efficiency of NSE gold ETFs in the context of the pandemic. The trading strategies such as the contrarian and the momentum tactics employed by the market participants towards gold ETFs in different time horizons were observed in detail. This study also attempt to check whether gold based funds is considered as a safe haven by the Indian investors in crisis settings. Daily return trend of gold ETFs and the broad market index for past four years were duly examined. The risk adjusted abnormal return method was employed for different time horizons as this technique observed to be more reliable for the topic and seems to be quite novel to the existing body of literature. The market participants were efficient in accommodating the pandemic news in their trading strategies. The analysis confirmed trading momentum attributed to gold ETFs despite the COVID‑19 waves. This research points that fund managers should give more weightage for gold based ETFs in their portfolio along with common stock as the portfolios diversified with gold ETFs were able to marginalize its loss impacted by the COVID waves. From economic point of view gold ETFs enabled to divert more funds from domestic households to the corporate sector even during the crisis period.
About the Author
M. Aravind
Government Law College Thrissur
India
Competing Interests:
India
M. Aravind - PhD (Finance), Assist. Prof. in Business Administration
Kerala
Competing Interests:
The author has no conflicts of interest to declare
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For citations:
Aravind M. Abnormal Return of NSE Traded Gold ETFs in Crisis Settings: An Appraisal of Contrarian Versus Momentum Strategies. Finance: Theory and Practice. 2024;28(6):69-79. https://doi.org/10.26794/2587-5671-2024-28-6-69-79
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