Capitalmind CEO Deepak Shenoy’s analysis reveals Nifty’s 10-year real returns outshine gold, PPF against inflation

Capitalmind CEO Deepak Shenoy recently shared valuable investment insights on social media platform X. In a post on September 10, Shenoy presented an analysis of long-term investment returns that highlights the impact of inflation on various asset classes.

“Nifty 10 year returns, above inflation, are about 8% (real returns). Gold is also 4%+! Even PPF is a decently positive number. But equities have been quite good for a bit,” Shenoy posted on X and shared a graph.

Shenoy's “Rolling Real Returns Above Inflation” graph compares 10-year returns for the Nifty Index, Gold, and Public Provident Fund (PPF), revealing disparities in the performance of major assets when adjusted for inflation. 

The decade-long data ending in mid-2024 showed the Indian Nifty Index, inclusive of dividends, as a frontrunner, with returns peaking at 8.4 per cent, albeit accompanied by significant swings in performance.

Gold, often considered a safe haven during economic turbulence, mirrored this volatility but ultimately delivered a solid comeback, stabilizing at a 4.8 per cent real return. Meanwhile, the Public Provident Fund (PPF) emerged as the bastion of stability, offering consistent, though more modest, returns at 2.5 per cent.

Shenoy's graph painted a broader picture of strategic investment approaches—equities for the bold, gold for the cautious, and PPF for the steady. Shenoy concluded that “equities have been quite good for a bit,” denoting the potential benefits of stock market investments.

Conversely, gold is well-known for its function as a safe-haven investment, showing strength and reliability during turbulent times. In economic instability, geopolitical conflicts, and market declines, gold has typically acted as a store of value, drawing in investors looking to reduce risk. Its performance often aligned with inflation concerns, as people sought to maintain their purchasing power amid rising prices, solidifying gold’s reputation as a reliable asset for long-term wealth preservation.

How has Bank Nifty fared?

The expense of hedging against fluctuations in the NSE Nifty Bank Index has been at its lowest point since January, compared to the broader NSE Nifty 50 Index, suggesting a reduced need for protection. At the same time, data from Bloomberg revealed that the number of bearish options on the banking index reached a three-week low on Friday, compared to bullish contracts.