Rs 1 Lakh Invested in Equity, Gold, and Real Estate in 2005: Which Asset Class Provided the Highest Returns in 20 Years?
Over the past 20 years, Indian equities have significantly outperformed other asset classes like gold and real estate. This article explores the historical returns of these investments to help investors make informed decisions.
EquityGoldReal EstateInvestment ReturnsLongterm InvestmentsReal Estate NewsJul 24, 2025
There are several avenues of investment for Indian investors, including equity, gold, real estate, and more. These are major financial instruments considered for wealth-building. However, the plethora of options can lead to confusion, known as the 'Choice Paradox.' The more options you have, the more confused you may become.
Where should an investor go among equity, gold, and real estate? There’s no one-size-fits-all answer. Each asset and investment instrument has its pros and cons. The investor’s conviction and risk tolerance play a crucial role in the decision-making process.
But what matters most is the returns. The purpose of investing in assets is to generate as much return as possible. Therefore, it’s better to look at the historical returns for these asset classes over the long term, say 10 or 20 years. While past returns do not guarantee future returns, they provide valuable insights.
Indian equities have outperformed other major asset classes over the long term, generating compounded annual returns of 14.4% over the past 20 years, according to data as of June 30, 2025, compiled by FundsIndia. This translates into a 14.7x multiplication of investors’ money, highlighting the consistent wealth-building potential of long-term investments in equities.
The Nifty 50 Total Returns Index (TRI) has topped the long-term chart, delivering robust returns over two decades, outpacing asset classes such as real estate, debt, and even gold. Interestingly, gold also performed strongly over the 20-year horizon, matching Indian equities with a 14.4% return and a 14.8x multiplier. However, its 15-year CAGR was lower at 11.1% versus the Nifty 50’s 12.4%.
Real estate and debt lagged significantly in long-term performance. Real estate investments returned just 7.7% CAGR over 20 years, growing 4.4 times in value. Debt assets performed similarly, with a 7.6% return and a 4.3x multiplier.
In the short term (1–3 years), gold remained highly volatile, showing a 45% return in 1 year and 25.2% in 3 years, while Indian and US equities experienced relatively steady growth.
So, how much would Rs 1 lakh invested in these assets in 2005 be worth today? If you had invested Rs 1 lakh in Indian equities (Nifty 50 TRI) 20 years ago, your money would have grown nearly 15 times to become around Rs 14.7 lakh today. A Rs 5 lakh investment would have become approximately Rs 73.5 lakh, and Rs 10 lakh would have turned into a whopping Rs 1.47 crore.
Gold has also been a solid performer. Over 20 years, it multiplied investments by 14.8 times. This means Rs 1 lakh invested in gold would now be worth Rs 14.8 lakh, while Rs 5 lakh would have grown to Rs 74 lakh, and Rs 10 lakh to Rs 1.48 crore.
On the other hand, real estate delivered more modest growth—multiplying money by 4.4 times. So, Rs 1 lakh would have become Rs 4.4 lakh, Rs 5 lakh would be Rs 22 lakh, and Rs 10 lakh would have grown to Rs 44 lakh.
In conclusion, while all three asset classes have their merits, Indian equities have shown the highest returns over the past 20 years. However, it's essential to consider your risk tolerance, investment horizon, and financial goals before making any investment decisions.
Disclaimer: The views and investment tips by experts in this report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.
Frequently Asked Questions
Which asset class has provided the highest returns over the past 20 years?
Indian equities have outperformed other major asset classes, generating compounded annual returns of 14.4% over the past 20 years.
How much would Rs 1 lakh invested in Indian equities in 2005 be worth today?
Rs 1 lakh invested in Indian equities (Nifty 50 TRI) in 2005 would be worth around Rs 14.7 lakh today.
What is the CAGR of real estate investments over the past 20 years?
Real estate investments returned a CAGR of 7.7% over 20 years, growing 4.4 times in value.
How did gold perform compared to equities in the long term?
Gold also performed strongly over the 20-year horizon, matching Indian equities with a 14.4% return and a 14.8x multiplier.
What should investors consider before making investment decisions?
Investors should consider their risk tolerance, investment horizon, and financial goals before making any investment decisions.
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