How Have Indian Equities Achieved a 14% CAGR Over 20 Years?
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Synopsis
Discover the impressive journey of Indian equities as they deliver a 14% CAGR over two decades, multiplying investor wealth 13 times. This report sheds light on the performance of various asset classes, emphasizing the importance of long-term investing and the wealth creation potential of the Indian market.
Key Takeaways
- Indian equities achieved a 14% CAGR over 20 years.
- Investor wealth multiplied by 13 times.
- Gold slightly outperformed with a 14.7% CAGR.
- Mid- and small-cap stocks were the biggest wealth creators.
- Long-term investing significantly reduces the risk of negative returns.
New Delhi, Sep 15 (NationPress) Indian equities, particularly within the Nifty50 index, have achieved a remarkable compound annual growth rate (CAGR) of 14 percent over the last two decades, resulting in a staggering 13-fold increase in investors' wealth, as detailed in a report published on Monday.
In a comparative analysis, gold slightly surpassed equities with a 14.7 percent CAGR, enhancing its value by 16 times during the same timeframe.
On the other hand, real estate and debt markets yielded more conservative returns, compounding annually at 7.7 percent and 7.5 percent, respectively, over the past twenty years, as highlighted in FundsIndia's 'September Wealth Conversation Report.'
When examining a longer-term perspective, domestic equities have performed even more impressively, delivering a 13.6 percent CAGR over 35 years, leading to an 88-fold increase in wealth.
Globally, the US equity benchmark S&P 500 recorded a 14.7 percent CAGR, multiplying investor wealth by 15.6 times during the past two decades.
In the Indian market, mid- and small-cap stocks stood out as the most significant wealth generators. The Nifty Smallcap 250 achieved a 14.2 percent CAGR, growing 14 times in twenty years, while the Nifty Midcap 150 experienced a remarkable surge at 16.2 percent annually, multiplying wealth by 20 times. In contrast, large-cap stocks, represented by the Nifty 100, compounded at a 13.9 percent CAGR and increased 13.6 times over the same period.
The report underscored the crucial nature of long-term investing. It was noted that the likelihood of negative returns was as high as 43 percent for intraday trades in Nifty50 stocks, 39 percent for one-month holdings, 31 percent for three-month holdings, and 23 percent for one-year holdings. However, this risk significantly decreases over extended periods: just 6 percent for three years, 0.1 percent for five years, and becomes negligible for holding periods of seven to ten years.
The report indicated that 73 percent of the time, Indian equities (Nifty 50) have doubled in 6-7 years and 80 percent of the time, they have tripled in 10-11 years. Moreover, 76 percent of the time, Indian equities have quadrupled in 12-13 years.
Point of View
I affirm that the findings of this report are a testament to the resilience and potential of Indian equities. The data highlights the significance of adopting a long-term investment strategy, which can lead to substantial wealth creation, even amidst market fluctuations. Nation remains committed to informing investors about emerging trends and strategies.
NationPress
15/09/2025
Frequently Asked Questions
What is the CAGR of Indian equities over the past 20 years?
Indian equities have delivered a CAGR of 14% over the last 20 years.
How much has investor wealth multiplied in Indian equities?
Investor wealth has multiplied by 13 times in Indian equities over the past two decades.
What were the CAGR rates for gold and real estate?
Gold achieved a CAGR of 14.7%, while real estate had a CAGR of 7.7% over the same period.
What is the risk of negative returns in the short term?
The probability of negative returns for intraday trades in Nifty50 stocks is as high as 43%.
How often do Indian equities double in value?
Indian equities have doubled in value 73% of the time within 6-7 years.
