Asset quilt: How returns varied across assets classes in 2024 and last 10 years
Subscribe to enjoy similar stories. While the winners among asset classes keep rotating every year, the absence of any such pattern over the past 10 years (see chart) reinforces the importance of asset allocation in building a balanced portfolio. Here’s a quick look at the performance of different asset classes in 2024.
Unlike last year, when Indian stock markets were on a tear with the BSE 250 SmallCap Total Return Index (TRI) delivering 47.3% returns, this year the stock markets seem to have taken a breather. The BSE 250 SmallCap TRI is up 24.1% in year-to-date returns (as of 23 December). The BSE 150 MidCap TRI is up 26.2% this year (from 42.4% in 2023) and the BSE 100 TRI—which tracks large-caps—is up 13.7% (from 23.2% in 2023).
In 2024, the stock markets have been more volatile. The frontline market indices—BSE Sensex and Nifty 50—have corrected as much as 10% from their respective highs touched on 26 September. The correction came amid a sell-off by foreign investors, downgrades to corporate earnings, and slower economic growth.
Foreign portfolio investors (FPIs) have net sold Indian equities worth ₹95,558 crore since October. Experts expect some moderation in market momentum, but believe India’s structural growth story remains intact. “What we have seen in the last five years in terms of returns across large-cap, mid-cap and small-cap, we are unlikely to see a repeat of that in near-to-medium-term," said Nilesh Shah, managing director of Kotak Mutual Fund.
Shah added that valuations are fair, the base is high, and nominal returns will also decline in line with inflation. “It will also be important to watch FPI flows," Shah said. “Markets will remain weak as long as they are selling aggressively.
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