Equity, debt and gold: Best-performing asset combinations of 10 years
In this week’s TrendMap, ET Wealth compares seven asset combinations. Portfolios with gold have delivered a notable return boost in recent years, while those without gold exposure have consistently lagged. By Sameer Bhardwaj.
The balanced allocation strategy dominated 2025, delivering a stellar 28.4% return; nearly double that of most other portfolios.
For best portfolio results, it’s best not to get swayed by any one asset class. Experts recommend diversification. While asset allocation is key, the optimal mix varies across investors.
Gold and equities: Engines of long-term growth
The balanced allocation strategy (equal weighted across equity, debt, and gold) dominated 2025, delivering a stellar 28.4% return; nearly double that of most other portfolios. Portfolios with meaningful gold exposure occupied the top three spots. In contrast, the equity-heavy portfolio (70%)— despite being the most powerful long-term wealth generator—ranked sixth in 2025 with just 12.9%, as volatility and interim corrections exposed its high sensitivity to market cycles. The portfolio with zero gold exposure in 2025 had a mere 6.3% return.
Over the 10-year horizon, however, the picture shifts dramatically. The equityheavy portfolio delivered a compounded return of 12.8%, underscoring equities’ unmatched wealth-generation potential over time. The balanced allocation strategy proved its worth here too, achieving the second-highest 10-year compounded return of 12.7% and ranking among the top two performers in seven of the last 10 years. By limiting drawdowns during stress periods while still capturing meaningful gains in bull markets, it emerged as a model of consistency.
Debt-heavy portfolios, while resilient in certain years, lagged over the long run. Structural limitations—such as lower return potential and vulnerability to interest rate cycles (ultra-low rates during Covid followed by aggressive tightening)—capped performance relative to equity-driven strategies. Gold consistently enhanced portfolio resilience across the decade.
Source: ACE MF. *2025 data is YTD based on 22 December 2025 closing values. Other years’ returns are calculated between the first and the last trading day closing values. Numbers in brackets are the weighted average return (or portfolio return) of the respective investment allocation. 10 year weighted average return is based on compounded returns of the respective assets. Benchmarks used: Equity: Nifty 500 Index, Debt: Crisil Composite Bond Index, Gold: Nippon India ETF Gold BeES.
