India vs US markets

You might be surprised by this data. The white line represents the CNX 500 India index in dollar terms, and the blue line represents the S&P 500 in dollar terms.

Many people believe that the US market, specifically the top 500 stocks, performs much better than the Indian market. However, a comparison between the S&P 500 and the CNX 500 from 1999 to now shows a different story.

The data, spanning 25 years, reveals that the Indian market has significantly outperformed the US market. While the S&P 500 has returned 295% in this period (excluding dividends), the CNX 500 has delivered an impressive 1,330%. This comparison, made in dollar terms, clearly shows that the Indian market has been a better performer than the US market as a whole.

In the US market, a few standout stocks like Nvidia, Apple, and Tesla often drive the narrative of high returns. However, when considering the top 500 stocks as a whole, the performance does not match up to the Indian market. This analysis is in dollar terms, making it a fair comparison for both retail and institutional investors.

Adding the Nasdaq and CNX IT indexes to the comparison, which represent technology and biotech shares, further illustrates the point. The Nasdaq, a leading US index, has been significantly outperformed by the CNX IT index. Despite the Nasdaq’s strong performance, Indian IT stocks have done 70-80% better. This shows that Indian IT companies have performed exceptionally well compared to their US counterparts.

Volatility and Long-Term Gains

Indian markets may have more volatility compared to US markets, but the long-term gains are undeniable. An investor who put money in the Indian market 20 years ago and left it there would have seen fantastic returns in dollar terms. It’s crucial to look at data rather than relying on narratives. The data shows that Indian markets have consistently outperformed.

Looking forward, the Indian growth story appears stronger. The US markets are currently facing challenges and may need restructuring to regain momentum. From this perspective, staying invested in India or increasing investments in the Indian market seems promising. The past performance and future potential make the Indian market an attractive choice for investors.

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