Gold, Equity, Debt, and Real Estate: Which Asset Class Outperformed Over the Last 10 Years?
Explore the 10-year performance of different investment segments, including mid-caps and gold, to determine the best returns and the importance of diversification.
GoldEquityReal EstateMidcapsDiversificationReal Estate NewsAug 25, 2025
The demand for safe-haven assets amid global uncertainty fueled gold prices, while strong industrial demand and limited domestic supply supported silver’s surge in 2025. Mid cap and small cap segments turned laggards due to the absence of fresh growth triggers, elevated valuations, profit booking, and shifting investor sentiment, particularly among foreign portfolio investors (FPIs). Currently, mid and small-cap benchmarks are trading at over a 40% premium to the Nifty 50, based on historical price-to-earnings multiples. In the long run, equity mid-caps led the performance charts, driven by their faster earnings growth and expansion into new markets. Gold was a long-term diversifier due to its low correlation with equities and resilience against macro-economic shocks such as rising oil prices and geopolitical tensions.
Lessons from the Grandmasters highlight the importance of strategic investment and diversification. Over the past decade, the performance of various asset classes has fluctuated, emphasizing the need for a balanced portfolio. While mid-caps and gold have shown strong performance, it is crucial to consider the broader economic context and individual financial goals.
Source: Reuters-Refinitiv, NHB and ACE MF. 2025 data is YTD based on 19 August 2025 closing values. Other years’ returns are calculated between the first and the last trading day closing values. 10-year return is compounded average return. NHB Residex returns based on March values for each year. The latest NHB Residex data is available up to the March 2025 quarter. Benchmarks used: Equity (Large cap): Nifty 50, Equity (Midcap): Nifty Midcap 100 Index, Equity (Small cap): Nifty Smallcap 100 Index, Silver: MCX Silver futures, Gold: MCX Gold futures, G-Sec 10-Yr : Crisil 10 Yr Gilt Index, Debt (Short-term) : Crisil 91 Day T-Bill Index, Real Estate : NHB Residex.
Frequently Asked Questions
What asset class performed the best over the last 10 years?
Equity mid-caps and gold have shown the best performance over the last 10 years, driven by faster earnings growth and their role as a safe-haven asset, respectively.
Why did mid-caps and small-caps underperform recently?
Mid-caps and small-caps underperformed recently due to the absence of fresh growth triggers, elevated valuations, profit booking, and shifting investor sentiment, particularly among foreign portfolio investors (FPIs).
How did gold perform as a safe-haven asset?
Gold performed well as a safe-haven asset, showing resilience against macro-economic shocks such as rising oil prices and geopolitical tensions, and maintaining a low correlation with equities.
What is the importance of diversification in investment?
Diversification is crucial in investment as it helps to spread risk and can lead to more stable returns. No single asset class consistently outperforms, and a balanced portfolio can help protect against market volatility.
What benchmarks were used to track the performance of different asset classes?
Benchmarks used to track the performance of different asset classes include the Nifty 50 for large-cap equity, Nifty Midcap 100 Index for mid-cap equity, Nifty Smallcap 100 Index for small-cap equity, MCX Silver futures for silver, MCX Gold futures for gold, Crisil 10 Yr Gilt Index for G-Sec 10-Yr, Crisil 91 Day T-Bill Index for short-term debt, and NHB Residex for real estate.
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