Do the Macroeconomic variables influence Exchange Traded Funds (ETFs)?

Exchange Traded Funds (ETFs) are essentially Index Funds that are listed and traded on exchanges like stocks. Until the development of ETFs, this was not possible before. Globally, ETFs have opened a whole new panorama of investment opportunities to Retail as well as Institutional Money Managers. They enable investors to gain broad exposure to entire stock markets in different Countries and specific sectors with relative ease, on a real-time basis and at a lower cost than many other forms of investing. An ETF is a basket of stocks that reflects the composition of an Index, like S&P CNX Nifty or BSE Sensex. The ETFs trading value is based on the net asset value of the underlying stocks that it represents. Think of it as a Mutual Fund that you can buy and sell in real-time at a price that change throughout the day. Compared to mutual funds, ETFs are relatively new. The first U.S. ETFs were created by State Street Global Advisors with the launch of the S&P 500 depositary receipts, also known as SPDRs ("spiders"). Although the first ETFs tended to track broad market indexes, more recent ETFs have been developed to track sectors, fixed income, global investments, commodities and currencies. There exists correlation between ETF and macroeconomic variables and also change in independent variables causes change in dependent variable. However, the degree of variability differs. These variables form significant part and the level of prediction is also good. Therefore, the model is good fit for the data. An investor needs to guise into these while taking investment decision.