Don't give up on GOLD THEME now, it gave a fairly good return

~GOLD ranked among the best performers today. On a longer term basis, investors in Gold made +0.07% per day. Friday's performance of -0.26% was a underperformance compared to it's daily average.

[Theme constituents]

~GOLD showed a bullish trend over the last 3 months. During this period ~GOLD delivered +1.52% and saw a maximum drawdown of -17.3%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in ~GOLD till volatility reduces and a clear trend emerges.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

~GOLD has been outperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 18 Jan, 2016 to 15 Jan, 2018. Over the last 2 years 11 months and 13 days, ~GOLD outperformed the NIFTY-50 index on 53% days.

During the last three months ~GOLD delivered losses on 55% days. However, it still managed to end this period in a profit. It's best return during this period (of +4.98%) was on Friday, 2 Nov, 2018. While it's worst loss in the same period (of -3.9%) was on Friday, 28 Sep, 2018. The longest stort-term trend during this period was 8 losing days, which started on 27 Sep, 2018 and ended on 9 Oct, 2018. This bearish trend lost -10.06% of investor capital.

During the last year ~GOLD had 4 profitable months and 8 loss making months. ~GOLD returned profits in fewer months than NIFTY-50 index. ~GOLD was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -13.95% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ~GOLD had a longer winning streak of losing months than NIFTY-50 index. It went down in 7 straight months (from Jan 2018 to Jul 2018) during which period it delivered -31.94%. It is interesting to note that both ~GOLD and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Happiness lies in the joy of achievement and the thrill of creative effort.
-- Franklin D. Roosevelt

~GOLD is currently seeing overall increase in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant surge in ~GOLD's volatility from 17 Sep, 2018 to 5 Nov, 2018. While there was a significant fall in the NIFTY-50 index's volatility from 21 Sep, 2018 to 5 Dec, 2018.

Advanced/professional short-term investors should note that ~GOLD has significant positive skewness in it's return distribution. This indicates that investors can expect ~GOLD to recover from drawdowns quickly. Which makes ~GOLD a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

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

Based on your interest in ~GOLD you may find it interesting to know that LTTS and LTI are both mid caps that have shown remarkable performance and deserve to be on every investors' watchlist.