Small, Mid, Large and Gold
Over the past two decades, India’s equity markets and gold have yielded some surprising results. A comparative analysis of the Nifty 50, Nifty Midcap, CNX Smallcap indices, and gold prices (in INR) from 2005 to 2025 presents a clear picture of the performance across various asset classes.
20-Year Overview :
- Midcaps have led the pack with a remarkable 1,500% return.
- Gold follows closely behind with a 1,300% gain.
- Nifty 50 delivered an 869% return.
- Smallcaps brought up the rear with an 809% gain.
This long-term view challenges conventional expectations. Many might assume that Smallcaps often considered high-growth investments would outperform. However, they have underperformed not only compared to midcaps but also in relation to gold (see image above).
10-Year Overview (2015–2025):
- Midcaps: 390%
- Gold: 320%
- Smallcaps: 235%
- Nifty 50: 195%
Once again, midcaps consistently outperform across various timeframes, while gold remains a strong alternative asset (see image above). Although Smallcaps performed slightly better than the Nifty 50 during this period, they still lag behind the other asset classes.
5-Year Overview (Post-COVID Recovery):
- Smallcaps: 326%
- Midcaps: 306%
- Nifty 50: 148%
- Gold: 133%
Following the pandemic lows, Smallcaps staged a robust recovery, benefiting from the bounce-back effect after a significant downturn (see image above). Even in this recovery phase, midcaps were not far behind.
Key Insights:
- Midcap stocks have demonstrated strong and consistent growth across all periods.
- Smallcaps tend to excel after significant market corrections but have underperformed over longer durations.
- The Nifty 50 provides steady compounding and has proven to be a reliable core holding.
- Gold adds valuable diversification and has outperformed the Nifty over both the 10-year and 20-year periods.
A balanced allocation among these segments—large caps, midcaps, Smallcaps, and gold may be essential for optimizing long-term returns while managing risk.
What are your thoughts on the shifting performance of these asset classes? Do you actively diversify your investments? Share your views in the comments below! If you found this analysis helpful, don’t forget to SHARE it with your friends.
