Long-term equity returns: Claim vs reality

Overarching claims, disclaimers give rise to wrong expectations about risk and return to the investor

When on August 1, 2017, Nifty 50 touched 10,114, it gave a return (theoretical) of over 32x in approximately 27 years. While Nifty 50 was launched for trading on April 1996, it was back calculated all the way to July 20, 1990, for the purpose of index creation. From July 20, 1990, till date, Nifty 50 has given an annualised return of approximately 13.7 per cent. While such headlines create a case for long-term investment in Indian equities, it also sets wrong expectations about risk and return among retail investors. It is surprising that the market regulator feels that an