If your is in the red over the last 1 year, you may be missing out on returns from other asset classes. A portfolio concentrated in Indian equities or Indian mutual funds would have faced a different outcome from one spread across US equities, gold, real estate, and debt.
need to look beyond a single market or asset class to understand how returns vary across investment horizons. Here is how 5 asset classes have performed over the last 1 year and across longer periods.
How have different asset classes performed?
| Asset Class | 1Y | 3Y | 5Y | 10Y | 15Y | 20Y |
| India – Equity (Nifty 50 TRI) | -7.1% | 6.1% | 6.4% | 11.5% | 12% | 11% |
| Debt | 5% | 6.7% | 6% | 6.7% | 7.5% | 7.5% |
| Real Estate | 8.5% | 7% | 6.9% | 5.5% | 6.1% | 7.5% |
| Gold (in INR) | 18% | 37.2% | 25.4% | 16.4% | 11.4% | 14.3% |
| US – Equity (S&P 500 TR in INR) | 25% | 29% | 19.8% | 19.6% | 21% | 15.4% |
*Source: FundsIndia’s Wealth Conversations October 2026 report, CAGR returns as on 30 September 2026
In the last 1 year, the Nifty 50 TRI declined 7.1%, while US equities returned 25%, gold gained 18%, real estate returned 8.5%, and debt delivered 5%.
For example, ₹1 lakh invested in a Nifty 50 index fund tracking the index would have fallen to around ₹92,900, assuming the index return and ignoring tracking error.
Now consider an allocation of ₹20,000 each across the five asset classes.
- Indian equities: The investment would fall by 7.1% to ₹18,580, a loss of ₹1,420.
- US equities: A 25% return would increase the investment to ₹25,000, a gain of ₹5,000.
- Gold: An 18% return would take the investment to ₹23,600, a gain of ₹3,600.
- Real estate: An 8.5% return would increase the investment to ₹21,700, a gain of ₹1,700.
- Debt: A 5% return would take the investment to ₹21,000, a gain of ₹1,000.
Overall, the diversified portfolio would be worth ₹1,09,880, generating a gain of ₹9,880, compared with a loss of ₹7,100 if the entire ₹1 lakh had been invested in a Nifty 50 index fund.
Which asset class leads over different periods?
Market leadership changes with the investment horizon. Over 3- and 5-year periods, gold delivered the highest CAGR, while Indian equities and debt, respectively, recorded the lowest returns.
Over 10 and 15 years, US equities led, while real estate ranked last. Over 20 years, US equities again topped the list, while real estate and debt shared the lowest CAGR of 7.5%.
This shows that no single asset class leads across every period. Concentrating a portfolio can leave investors more exposed when the single asset class or market underperforms.
Diversification across asset classes can help spread risk, although it does not guarantee profits or prevent losses.
investors can consider diversifying their portfolios across Indian equity funds spanning different market capitalisations, international funds, debt funds, gold ETFs, and REIT (real estate investment trusts) funds, depending on their investment objectives and risk appetite.
Disclaimer: This is purely for educational/informational purposes and should not be taken as any sort of investment advice. Always consult a SEBI-registered advisor before making any investment decisions.