282.8 -1.15 (-0.4%) Buy

Stop-loss on the minds of KOTAKGOLD investors as it underperforms

13 min read

KOTAK GOLD ETF underperformed on Friday. It fell by -0.4% to close at 282.8. It is currently trading +9% above it's 52 week low of 257.8 and is down only 0% from it's 52 week high.

[Themes containing KOTAKGOLD]

Buy-and-Hold investors in KOTAKGOLD experienced a maximum drawdown of -6.0% over the last three months. It delivered +1.25% during this bullish trending period. There were both Long and Short signals during this period, while the long signals were marginally more profitable than the short signals.


KOTAKGOLD has been outperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 29 Feb, 2016 to 21 Aug, 2018. Over the last 3 years and 1 month, KOTAKGOLD underperformed the NIFTY-50 index on 52% days.

During the last three months KOTAKGOLD was mostly profitable and delivered on average +0.02% per day. It's best return during this period (of +1.73%) was on Monday, 10 Dec, 2018. While it's worst loss in the same period (of -1.71%) was on Monday, 12 Nov, 2018. The longest stort-term trends during this period were 6 profitable and losing days. The bullish trend (which returned +2.01%) started on 20 Dec, 2018 and went on till 28 Dec, 2018 while the bearish trend (which returned -2.77%) started on 12 Dec, 2018 and went on till 19 Dec, 2018.

During the last year KOTAKGOLD had 8 profitable months and 4 loss making months. KOTAKGOLD returned profits in more months than NIFTY-50 index. KOTAKGOLD was also a less risky investment than NIFTY-50 index as it's worst month in the last year, Nov 2018, returned -5.56% compared to -6.42% returned by NIFTY-50 index in Sep 2018. KOTAKGOLD had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from Feb 2018 to Apr 2018) during which period it delivered +5.55%. It is interesting to note that both KOTAKGOLD and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

There is nothing wrong with changing a plan when the situation has changed.
-- Seneca

KOTAKGOLD is currently seeing overall fall in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant surge in KOTAKGOLD's volatility from 22 Oct, 2018 to 12 Nov, 2018. While there was a significant fall in the NIFTY-50 index's volatility from 31 Oct, 2018 to 5 Dec, 2018.

Advanced/professional short-term investors should note that KOTAKGOLD has positive skewness in it's return distribution. This indicates that investors can expect KOTAKGOLD to make attempts to recover from drawdowns quickly. Which makes KOTAKGOLD a good candidate for momentum based trading on short-term bullish trends or counter-trends.

NIFTY-50 index has more chance of extreme outcomes than KOTAKGOLD. Therefore, NIFTY-50 must receive a lower allocation than KOTAKGOLD in your portfolio. KOTAKGOLD usually has shorter drawdown period than the NIFTY-50 index.

Based on your interest in KOTAKGOLD you may find it interesting to know that SPLIL has shown remarkable performance this year and deserves to be on every investors' watchlist.

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