A Critical Analysis on Gold ETFs

Summary

During 2004-06, the average return and risk of Dow Jones Industrial Average’s Index was 6.65% and 2.22% respectively. The UK – FTSE return and risk for the same period was 11.95% and 2.47% respectively. The German DAX Index registered an average return and risk of 19.11% and 3.52% respectively.

In terms of comparative assessment of systematic risk of Gold, the in the USA, Gold has a beta of 0.15 (in comparison to Dow Jones Industrial Averages), while in UK it is 0.48 and in Euro-Dax it is 0.095. This means that gold is an ideal asset for inclusion into investment portfolios for it has very low systematic risk. It is an ideal hedge against portfolio volatility.

The Coefficient of Variation of representative GETFs for the period of research are– for the USA 2.89, for UK 2.5 and 2.13 for Singapore, respectively. The Coefficient of Variation for Equities (as represented by respective Indices) are –for the USA 2.44, for UK 2.00 and for Singapore 1.93, respectively.

A comparison of Beta of GETFs with representative equity Indices across Asia, Europe and USA confirms why GETFs (and consequently gold) are considered as ideal hedges against inflation. While Beta of GETF (Singapore) and UK stand at 0.32 each, Beta’s of GETFs in USA is a mere 0.08. These results show that GETFs (like their underlying asset – gold), have low susceptibility to systematic risks.

These results clearly indicate that as an individual asset gold provides high returns as well as is a high risk investment, but it has a low coefficient of variation. Further, GETFs, with gold as the underlying objective are safer investments then equities. The advantage with gold and GETFs is that they have low Beta and are therefore less susceptible to systematic risks. Thus GETFs are “must haves” in every investment portfolio as they offer opportunities for “adequate risk diversification”.

Limitations of Study:

It is important to critically evaluate the results and the whole study on the primary data. The present study has certain limitations that need to be taken into account when considering the study and its contributions. This study has focused on a phenomenon that is a very extensive and major. Clearly, this represents a challenging task for research regardless of the more specific interests that the study may have. In this study, this extensive and complex phenomenon has been studied from a rather narrow empirical perspective. By understanding something about this particular case more in depth, I might eventually also learn something more apart from the research study and should be implemented in general. In this research report there are certain things which need to be explored and should be investigate at a big approach. I had faced a limitation during a research, which was regarding the feasibility of the appointments with the investors and there was certain limitations with organizations. Apart from that there were also some time constraints and cost constraints which limited the exposure of my research to a certain level. The report also contains much part of secondary data because of less participation of investors.

In addition to winding up the limitation and the perspectives of the research report, it was also very interesting to gain the knowledge and understanding of the topic and market analysis.

Conclusions:

India is the world's biggest consumer of gold, consuming 700-800 tonnes annually, the majority of which is used for jewellery. Gold ETFs are expected to be popular as investment-led buying for gold has pushed aside some of the demand for gold jewellery. Buying jewellery as an investment in gold can be expensive as charges in the form of making, storage and other services tend to increase the cost, while Gold-ETFs can be an effective investment tool to help one build significant wealth over time.

The study observes that the average annual return of Gold in USA during the period of research (2004-06) in USD was 107%. The return of Gold in Europe in GBP is 100% while the return of Gold in Euro is 106%.

The average annual risk of Gold in the USA (in terms of USD) was 9.49%, while it was 4.58% and 6.60% in UK (in terms of GBP) and Euro (in terms of Europe) respectively.

During 2004-06, the average return and risk of Dow Jones Industrial Averages Index was 6.65% and 2.22% respectively. The UK – FTSE return and risk for the same period was 11.95% and 2.47% respectively. The German DAX Index registered an average return and risk of 19.11% and 3.52% respectively.

In terms of comparative assessment of systematic risk of Gold, the in the USA, Gold has a beta of 0.15 (in comparison to Dow Jones Industrial Averages), while in UK it is 0.48 and in Euro-Dax it is 0.095. This means that gold is an ideal asset for inclusion into investment portfolios for it has very low systematic risk. It is an ideal hedge against portfolio volatility.

The Coefficient of Variation of representative GETFs for the period of research are– for the USA 2.89, for UK 2.5 and 2.13 for Singapore, respectively. The Coefficient of Variation for Equities (as represented by respective Indices) are –for the USA 2.44, for UK 2.00 and for Singapore 1.93, respectively.

A comparison of Beta of GETFs with representative equity Indices across Asia, Europe and USA confirms why GETFs (and consequently gold) are considered as ideal hedges against inflation. While Beta of GETF (Singapore) and UK stand at 0.32 each, Beta’s of GETFs in USA is a mere 0.08. These results show that GETFs (like their underlying asset – gold), have low susceptibility to systematic risks.

I believe ETFs offer a good service - and a service which is in every way better for gold buyers than gold futures (which are unbacked by gold bullion and thereby subject their holders to unknown risks of default during a crisis). We also understand that convenience, where the buyer has an existing brokerage account, may make ETFs an excellent choice for many investors.

Perhaps they are most appropriate to investment institutions - for who they were originally targeted - because so many funds are required to own instruments which are structured as securities and traded on a formal stock exchange.

However we believe several features - when taken together - make BullionVault the best available route to gold ownership available today - namely:

1. 100% pure gold to the full weight of the investment - and no weight discounts
2. Direct physical ownership with no complex trust deed
3. Multiple vault locations, and the flexibility to switch locations at speed
4. Much lower storage charges - which include insurance
5. Accessible price reporting
6. 24/7 dealing in three currencies
7. The proof of ownership by the Daily Audit and
8. Extremely competitive pricing with the ability to earn the spread

These results clearly indicate that as an individual asset gold provides high returns as well as is a high risk investment, but it has a low coefficient of variation. Further, GETFs, with gold as the underlying objective are safer investments then equities. The advantage with gold and GETFs is that they have low Beta and are therefore less susceptible to systematic risks. Thus GETFs are “must haves” in every investment portfolio as they offer opportunities for “adequate risk diversification”.

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The above article is a summary extract from the dissertation projects of the MBA and BBA students of Skyline College. Skyline, situated in Delhi and Gurgaon (NCR) is a premier institute providing management education specialising in MBA and BBA degrees and specialist courses for travel and tourism as well as mass communication.

Critical Analysis of the Consumer Perception about the Nokia Mobile in India

Name:    Vikas (2008 – 2010)
Title:     Critical Analysis of the Consumer Perception
            about the Nokia Mobile in India

Summary:
This project was aimed at critical analysis of the consumer perception about the mobile in India.
I have chosen several parameters to study the Nokia.

• Parameters like organization profile, market positioning, product strength and weakness, were used during the study.
• After a thorough understanding of the consumer perception, some recommendations were offered.
• Both primary as well as secondary data was obtained for the study. Primary data was collected by personally interview and filled questionnaire by customer and retailer.
• And secondary data was obtained through the medium of internet, organizational site, magazines and newspapers.

At the end of this study a detailed analysis was made with the respect to factors like, consumer perception, comparison of Nokia with others and awareness level of consumers about Nokia mobile phones.

Aim / Objective of the Study:
The main objective of study was to analyze the consumer perception about the mobile in India. The specific objective of the study was:

• To study the awareness level of consumer and potential consumer of Nokia mobile phone.
• To know how Nokia brand is perceived by consumer compared by competitors.
• To analyze consumer perception of Nokia on various attributes.

Recommendations:
During study I found lots of problem in the organization. Here is some recommendation is given below by which organization can maximize profit and grow.

• Should Use latest Mobile Software: Nokia should use latest software through which they can enhance their mobile phones. During my study I found the hanging problem in mobiles (especially N, E series). It also affects the output of organization.
• Should Use Good Speakers: Nokia should use good quality of speakers in order to improve the sound quality. I found that their speakers are not good as compared to competitors (Sony Ericson, Motorola).
• Should Use Attractive Panels:  Most of respondents made complaint about Panel in their mobiles. So they use attractive panel in order to satisfy the customer.
• Should use hologram for product (Charger): During my study what I analyze that there are many duplicate product of Nokia is  available in the market which have same looks as  Nokia , so for unique identity they should  use hologram for their product(Charger).
• Should provide some scheme to customer: Nokia should provide some scheme to customer because it will also increase after market sale
• More sign board should be installed.

Conclusions:

According to my study what I found that Nokia is a well brand name company in Indian market as well as globally. Some of the findings are given below.

• Firstly, mobile segment Nokia has more than 40% market share.
• According to my research what I found that most of the customers know about the Nokia. It means that the awareness level of Brand in market is very high.
• During my study what I found that for the customer Nokia is well known brand but they are not satisfied with the quality (Sound, Slow Processing) of the product. It mean the quality of the product is comparatively is low.
• The after sales service of Nokia is excellent. Around 60% of customers are satisfied with them.
• Through my field study what I analyze that Nokia has Reliance the major competitors in every segment.

According to me the mantra for success of Nokia will be QCD that is Q = quality, C= Customer, D= delivery.

Limitations:
The cell phone industry is large consisting of a large number of competitors and different consumer perceptions about them, & the entire universe cannot be studied. So the study is limited to only few issues related to Nokia brand in view of cost & time constraints. The main limitation of this study is that it is based on the perception and we know that it is very difficult to make conclusion on these basis.

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The above article is a summary extract from the dissertation projects of the MBA and BBA students of Skyline College. Skyline, situated in Delhi and Gurgaon (NCR) is a premier institute providing management education specialising in MBA and BBA degrees and specialist courses for travel and tourism as well as mass communication.

Tropicana Juice Retail Survey (Market Improvement)

Name: Ravi Yadav (2008 – 2010)

Title:  Tropicana Juice Retail Survey (Market Improvement)

Summary
PepsiCo India Holdings Pvt. Ltd. operates through its subsidiaries including Pepsi Foods Ltd, Frito - Lay India, and Tropicana Beverages Company. The company, through its subsidiaries manufactures, bottles, and exports fruit juices and carbonated beverages and packaged snacks such as Lays, Ruffles, Fritos, and Cheetos. PepsiCo India is based in Gurgaon, India. The company operates as a subsidiary of PepsiCo Inc.

Ms. Punita Lal: (Head of Marketing for the South Asia Beverage Business Unit PepsiCo India Holdings Pvt. Ltd.)

Ms. Punita Lal is employed at Pepsi Co. India in the position of Head of Marketing for the South Asia Beverage Business Unit since November 2004. A graduate in Economics from St. Stephens College, New Delhi and an MBA from the Indian Institute of Management, Kolkata, and Ms. Lal started her career in the advertising industry with Lintas, before moving to J Walter Thompson (JWT). While with JWT, she developed Pepsi's successful "Are you ready for the magic" marketing campaign.

Mr. Sanjeev Chadha: (General Manager, PepsiCo India Holdings Pvt. Ltd)
Mr. Sanjeev Chadha has been employed at PepsiCo India Holdings Pvt. Ltd. in the position of General Manager since 2007, Mr. Chadha is responsible for all aspects of PepsiCo's beverage business in India. Mr. Chadha is also Vice President of PepsiCo Asia.

Purpose of Study:
We select retailer survey because we want to study what different problems retailer are facing today regarding juices. Our research is restricted to TROPICANA juices. We have included existing number of Tropicana retailers.  We have developed market research on basis of distribution and sales network. This include direct interview of retailers those keeping Tropicana Juices. On basis of our study, what are different areas on which company can improve the distribution and sales network.

Recommendation:

• Company is introducing more and more schemes to reduce problem regarding schemes and also on other hand company is facing problem of expiry density. Single handed solution is provided by customer executive. 
• Tropicana is using mass communication tools to generate awareness in public about Tropicana juices. So company should increase their existing number of retailers to generate more sales.
• Company should have differential scheme for different retailers and their class. Usually, company has four class group 
• Gold class, A class, B class, C class
• Company can try to improve the ranking by introducing different options and services to them.
• Company is charging premium prices over competitor prices. Company also think about the commission offered to them. Company can increase commission to some extent that can give relief to retailers.

Conclusion:
Retailer survey consists of eight questions, among eight questions some of them also be divided into different categories. We take out retailer survey of Tropicana juices exactly opposite of Brand Management. It means focusing the brand from the retailers and company side instead of understanding it from consumer point of view. How company is aggressively making efforts to compete the market with less awared brand? In future any survey regarding retailer must be conclusive instead of inclusive. We have gathered only those questions which are most important. But further detailed study of this subject is possible on individual basis; we can individually come to know how many super stores keeps Tropicana juices in Gurgaon out of total number super store. In the future survey should be extensive study of complete Gurgaon market is possible. Due to lack of time constraints given to us, only two months with training in marketing, we are able to perform inclusively. We have ground reality experience in marketing profile offered to us.

Limitations:

• We have interviewed 60 number retailers keeping Tropicana juices; this number is insufficient for extensive research. For that at least we need 150 retailers to know the performance. 
• Our research consists of only those retailers who are keeping Tropicana juices. Next time we need to address also those retailers who are not keeping Tropicana juices.
• Some of retailers are not providing answers adequately, so they may be shuffle in the future research.
• We have only 8 questions in survey, at least 10 t0 15 questions would be sufficient number for the interview.
• Our research is restricted to only develop areas of Gurgaon; we have very less number of respondents from developing areas of Gurgaon.
• We have taken retailer population hypothesis of Bernoulli theorem. It is used when population mean and standard deviation is known to us. 
• Our hypothesis is based in certain assumptions if anyone wants to use these report in future, hypothesis will change. 
• We have worked under two distributors out of four distributors in Gurgaon; our market research is restricted to only areas related with two distributors.
• Some of parameters use in the research provides insufficient data regarding actual scenario.
• This research is restricted to education purpose, company acts as an authorised signatory. Company may use data for official purpose.
• We have included petty shop and local shop as a convenience store; actually very less number of petty shops is keeping Tropicana juices.
• Some of questions in research, we used ambiguous terms like sometimes in stock-out position, it doesn’t show which period stock-out is possible.

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The above article is a summary extract from the dissertation projects of the MBA and BBA students of Skyline College. Skyline, situated in Delhi and Gurgaon (NCR) is a premier institute providing management education specialising in MBA and BBA degrees and specialist courses for travel and tourism as well as mass communication.

Study on Consumer Buying Behaviour in Toothpaste Industry a Case Study of Colgate

Name: Shri Kant Dubey (2008 – 2010)

Title: Study on Consumer Buying Behaviour in

Toothpaste Industry a Case Study of Colgate

Summary:

Toothpaste industry has grown immensely in the Indian scenario. There is a loof competition in the industry mainly between two major players Colgate and HLL .The companies are coming up with new schemes as well as products to lure the customers. The usage of toothpaste has grown because of the lifestyle and the way the individuals are living i.e. more awareness about health.  Colgate is going ahead with almost 60% of the market share in the industry.

The title of the project was “study on consumer buying behavior in the toothpaste industry”.

The objectives of the study were to “Study the consumer buying habit” and “to study the toothpaste brands to identify important parameters for customer”. The questionnaire methodology was adopted and the consumers and the sales officer in companies were contacted in order to have their view on toothpaste. The area of the study was restricted to Gurgaon 100 respondents were contacted .The sales managers in two companies were contacted and their views were known in terms of how they were going in the toothpaste segment. It was found that many firms are in the toothpaste segment. So it is a highly competitive segment. It was found that focus as well as cost leadership was being followed by the firms when they were going in the toothpaste segment 

The firms are more and more focusing on the promotion and they are spending a lot of money on this front. Customers are also becoming demanding now-a-days and it is seen that many attributes are important for the success of a particular brand. The firms are going in for new launches.

It is found that the discounts are important factor. Another important factor is brand image or brand name. The project provided an opportunity to know about a competitive segment and how consumers behave in that segment. It also provided an insight into the toothpaste industry and the attitude and perception of the consumer in that segment.  

Objective of the Study:

• To study the Consumer Buying habits in Toothpastes. 
• To study the various factor and identify important parameters for customer acceptance
• To plot popular Toothpastes Brands on the perceptual maps.

Scope of the Study:

1. Identification of gaps in positioning stances.
2. Identification of consumer perceptions and attitudes regarding Oral hygiene.  

Conclusions:

The toothpaste industry is going to be more competitive in the near future. The profit margin is going down over the year and going to be continuing for the future also. So the main mantra for the companies to be successful is to satisfy the consumers and develop brand image and brand loyalty amongst them. 

So it has become very necessary for the consumers to understand the Indian consumers very well. So in the future the companies who come up with new products at competitive prices and with good quality are going to the successful one. Promotional activities are also going to play an important role that should to be for both retailers and consumers.

So we are going to see a market which is going to heat up in the near future where mainly two major players Colgate and HLL will fight the war.

Suggestions:

• The companies should give more emphasis on advertising and sales promotion as the competition is becoming tougher and tougher. So they need to make some brand image amongst the consumers.
• The customers are becoming king as they have a whole lot of choices. So the companies should try to be cost effective and pass on the saved amount to the customer.
• Retailers are still the place to buy toothpaste. So the companies should focus on retailers also who is also a customer for their products.
• The companies should try to launch new products after through research of the consumers as they are becoming more dynamic day by day. 

Limitations:

• The responses can be biased, as some of the respondents may not have revealed the true pictures.
• The company officials also too tend to give biased answers, as they always want to give a rosy picture of their company. 
• The managers were reluctant to give information about the product.
•   The sample was restricted to the Gurgaon region only.

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The above article is a summary extract from the dissertation projects of the MBA and BBA students of Skyline College. Skyline, situated in Delhi and Gurgaon (NCR) is a premier institute providing management education specialising in MBA and BBA degrees and specialist courses for travel and tourism as well as mass communication.