Skip to main content

Facts Vs Opinions – Comparing Indian Equity Markets And US Equity Market Performance

Do you believe that Indian Equity markets are doing better than US equity markets? As far as I get the drift from the “news”, it seems Indian markets are on the roll, while global equity market, especially the US is doing bad. Let’s see if the numbers support this opinion!!!

Here’s what the numbers say***:

1 Year calendar year (CY) performance, basis Total Return Index (TRI):

-          NIFTY 500:           4.25%  

-          S&P 500:              -18.11   

 

Indeed, Indian markets have held up better. And hence all the noise about being an oasis in the desert!!!

What does 5 year horizon hold?

-          NIFTY 500:           11.52% 

-          S&P 500:              9.42%   

Indian equity markets still seems to be doing better than US. Yay!!!

Let’s jack up the horizon further. What does 10 year horizon returns tell us?

-          NIFTY 500:           13.72% 

-          S&P 500:              12.56%

Again, Indian markets are beating US markets comfortably.

OR DID THEY? Have we looked at the data appropriately?

Nops. We have overlooked one critical thing. Above ROIs, while true, are in different currency – Indian market returns are in INR while US ones are in USD. Effectively, the data shown above does not give the true picture. Let’s do the comparison in same currency – in INR. All credit to spglobal.com for proving returns data in various currencies.

1 Year calendar year (CY) performance:

-          NIFTY 500, INR: 4.25%  

-          S&P 500, INR:    -8.86%

Ok, on latest year basis, Indian markets are still doing good. Though INR depreciation against USD has tempered the underperformance of US markets.

What does 5 year horizon hold?

-          NIFTY 500, INR: 11.52% 

-          S&P 500, INR:    15.25%

The tables have turned now. US Markets have surged ahead of Indian markets, and that too by quite a handsome margin!!!

Checking the data for 10 year horizon:

-          NIFTY 500, INR: 13.72% 

-          S&P 500, INR:    17.30%

US markets are still way ahead of India markets. Much touted “growth” market has lagged the “stable” market!!!

It’s upto to an individual what to read in the numbers given above. But don’t miss to do the numbers before you act on numerous opinions floating around (including those on this blog). And never forget the timeless wisdom shared by Benjamin Graham  - “Don’t take 1 year results seriously”.

***Performance at the end of CY 2022. Data source is https://niftyindices.com/ and https://www.spglobal.com/spdji/en/

Comments

Post a Comment

Popular posts from this blog

Equity Investing – The Worst Case Scenario, 10 Year Horizon Basis

10 year CAGR for the period 1 April 2010 – 31 March 2020: 6.19%. Covid 19 made equity market tumble and we had to contend with a lowly equity market returns. We can safely say 10 years is long enough investment horizon. Investment return of this quantum will easily qualify as worst case scenario. And it was. If we consider only point to point figure. Here’s what unique to listed equity investing: it is NOT like buying property where you lock in “one” price at a point in time. Then why look at worst case (or even best or average case) on point to point basis? My opinion – to get an idea of real worst case scenario, looking at data on 3 year moving average basis makes better sense. Let’s see what numbers say. Point to point returns of 10 year period ending: -           31 March 2018:                          ...
Post a Comment
Read more

Debt Mutual Funds: Can They Still Provide Better Returns Than Bank Deposits or Direct Bond Holdings?

Now that you are done with quickly deploying money in debt mutual funds in last few days of FY 2022 - 2023 to take advantage of indexation benefits which stand withdrawn from 1 st April 2023 onwards, what would you do with any money coming your way which you do not want to put in growth (risk) investments like equities? If you go by news, the money would move back to bank deposits now that fixed income investment area has been tax-levelled. We’ll see in a while what numbers say. Though for me, bank deposits beyond the insurance amount are a strict no. That said buying GILTS from RBI Retail Direct portal does deserve a serious thought now. But first let’s look at some subjective benefits of keeping money in bond funds. I could think of two: -           Liquidity. Bond funds are very liquid, while I cannot say for sure whether direct government bonds will be that liquid as I have never sold a GSEC in secondary market. In fact, not bough...
Post a Comment
Read more

Asset Inventory & Investment Success

You don’t know how well your money is doing until you have a clear picture where all your money is. That is where the role of periodically working out asset inventory comes into play. While it may appear to be a chore initially (and it is), if one perseveres, the results may be the best guide a very successful financial situation. The best part – you don’t need any fancy apps or other tools to go about it. Simple excel sheet or even a diary if you prefer writing can do the job near perfectly. I am deliberately not putting up any sample asset inventory format. That is left to each individual. The format you go by can be a simple one, with just the asset type & associated number against it. Or an advanced one where you also plug in realistic expected return. Maybe even a super advanced one (if I can say that), where you adjust the weighted average portfolio returns with expected inflation to get an idea how well your investments are keeping up with purchasing power capacity. Wh...
Post a Comment
Read more