Indian equities, debt, gold and US stocks: How should investors allocate money across these asset classes?

If you invest across Indian equities, debt, gold, and US equities, how you divide your portfolio across these asset classes can have a significant impact on your overall returns and risk.

A recent market study from WhiteOak Capital Mutual Fund offers a historical perspective by comparing the performance of these four asset classes from FY2011 through FY2027 year-to-date (July 2026).

The study tracks the BSE Sensex TRI for domestic equities, the CRISIL Short Term Bond Index for debt, MCX Gold in rupee terms, and the S&P 500 TRI in rupee terms for US equities.

When did Indian equities perform best and worst?

Indian equities had some sharp swings during the period. The BSE Sensex TRI's weakest performance came in FY2020, when it fell 22.9%.

On the other hand, FY2021 was the strongest year for the index, with a 69.8% return.

How did debt perform?

Debt was the most consistent of the four asset classes in the study. The CRISIL Short Term Bond Index did not record a negative annual return during the period shown.

Its highest return was 10.3% in FY2015. The lowest return in the period was 4.2% in FY2023.

When did gold perform best and worst?

Gold had a particularly strong run in some years, but it also went through periods of negative returns. MCX Gold in rupee terms fell 8.3% in FY2015, its weakest performance in the period.

At the other end of the spectrum, gold gained 64.8% in FY2026, making it the strongest annual performer among the four asset classes that year.

How did US equities perform?

The S&P 500 TRI recorded only one negative year: FY2023, when it fell by 1.5%.

Its strongest year was FY2021, when it gave 51.8% returns. Since the index is measured in rupee terms, these returns reflect both the performance of the US equity market and currency movements.

What was the return across asset classes?

From FY2011 to FY2027 year-to-date, the study shows the following CAGRs:

• BSE Sensex TRI: 11.0%
• CRISIL Short Term Bond Index: 7.6%
• MCX Gold (INR): 14.2%
• S&P 500 TRI (INR): 19.6%

The multi-asset portfolio shown in the study delivered an 11.4% CAGR over the same period.

How much should you allocate to each asset class in the portfolio?

The study allocated 25% to Indian equities, 45% to debt, 25% to gold, and 5% to US equities. At these weights, the portfolio's historical CAGR comes out to 11.4%.

But increasing the allocation to higher-returning assets can also lift the portfolio’s historical return.

For example, the S&P 500 TRI delivered a 19.6% CAGR over the period, the highest among the four asset classes. Increasing the allocation to US equities could potentially boost the portfolio’s historical returns.

For investors more concerned about stability and lower volatility, a higher allocation to debt could be considered. The CRISIL Short Term Bond Index did not post a negative annual return over the period.

Disclaimer: This is purely for educational/informational purposes and should not be taken as any sort of investment advice. Always consult a SEBI-registered advisor before making any investment decisions.