Investment Performance Insights
This analysis compares the annual returns of NIFTY50 and GOLDBEES from 2,010 to 2025. Below, we explore their individual performance and the strategic benefits of combining these assets in a portfolio.
NIFTY50 Performance
NIFTY50 reflects the dynamics of its underlying market, offering insights into its growth potential and risks:
- Average Annual Return: 10.9%
- Volatility (Standard Deviation): 13.8%
- Best Year: 2,014 (31.4%)
- Worst Year: 2,011 (-24.9%)
With an average annual return of 10.9%, NIFTY50 demonstrates potential for significant growth. However, its volatility of 13.8% indicates notable price swings. The strongest performance was in 2,014 (31.4%), while 2,011 saw a return of -24.9%. Investors should balance its growth prospects with its risk profile.
GOLDBEES Performance
GOLDBEES, representing gold, serves as a traditional safe-haven asset:
- Average Annual Return: 11.1%
- Volatility (Standard Deviation): 12.9%
- Best Year: 2,011 (29.1%)
- Worst Year: 2,014 (-9.5%)
Gold’s average annual return of 11.1% and volatility of 12.9% highlight its relative stability. Its best year was 2,011 (29.1%), and its worst was 2,014 (-9.5%). Gold’s role as a hedge against inflation and market uncertainty makes it a valuable portfolio component.
Portfolio Diversification Benefits
Combining NIFTY50 and GOLDBEES can enhance portfolio stability through diversification:
- NIFTY50: Higher growth potential (average return: 10.9%) but increased volatility (13.8%).
- GOLDBEES: Lower volatility (12.9%) and stability during market downturns (average return: 11.1%).
A portfolio allocation, such as 60% NIFTY50 and 40% GOLDBEES, could reduce overall volatility while maintaining growth potential. For example, in 2,011, when NIFTY50 underperformed, GOLDBEES may have cushioned losses. Investors should adjust allocations based on risk tolerance and market outlook.
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