Now Reading: Nifty 500 data: Most common three-year return is 10-20%
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Nifty 500 data: Most common three-year return is 10-20%
Historical data from the Nifty 500 TRI since 2005 shows that the most common three-year annualised return for investors has been between 10% and 20%, occurring in 46% of all 258 rolling…
Historical data from the Nifty 500 TRI since 2005 shows that the most common three-year annualised return for investors has been between 10% and 20%, occurring in 46% of all 258 rolling observations. Niranjan Avasthi of Edelweiss Asset Management said this range is the "clearest centre of gravity" in the data, and the latest rolling three-year CAGR of 12.9% falls within it.
Returns above 20% were far less frequent: 20-30% appeared 12% of the time, and above 30% occurred 16% of the time. The historical average return is 17.5%, and the median is 15%. Avasthi advised investors to treat mid-teen returns as a planning anchor and exceptional returns as a bonus, rather than assuming strong bull-market outcomes will persist.
Indian Opinion Analysis
The 17.5% average over 20 years aligns closely with the long-term nominal return expectation used by many pension and insurance funds in India. For a retail investor with a 10-year horizon, expecting a 12-15% CAGR is historically reasonable, expecting 20% or more year after year has a roughly one-in-four chance of being met. The SEBI-regulated mutual fund industry now mandates that scheme performance be shown with rolling returns, not point-to-point, precisely to avoid anchoring on lucky entry or exit dates. The next figure to watch is the monthly rolling return update: if the Nifty 500 TRI three-year CAGR dips below 10%, it would signal a below-average phase even by historical standards.
Source: livemint.com
This brief was synthesised by AI from the source linked above.
