Portfolio allocation: Portfolios with higher allocations to gold deliver superior returns in 2026

Equity leads long-term gains, diversification adds resilience

Portfolios with higher allocations to gold have delivered superior returns in 2026 so far, while those with a heavier equity bias have lagged. The results highlight the value of diversification. The portfolio with an equal allocation to equity, debt and gold tops the rankings, followed by those with substantial exposure to gold. Gold’s strong performance has been driven by height ened global uncertainty, currency volatil ity, and concerns over inflation and fiscal sustainability. In contrast, equity-heavy portfolios have underperformed. This does not necessarily signal weakness in India’s economic fundamentals; rather, it reflects headwinds such as foreign institutional out flows, elevated valuations, rupee weakness, and concerns over global trade and crude oil prices. Debt has provided stability, but its contribution has not been sufficient to offset gold’s outperformance. As a result, the portfolio with no exposure to gold is at the bottom of the performance rankings.

Long-term performance

Over the long term, portfolios with a bal anced allocation to equity, debt and gold have delivered the strongest performance, indicating that gold has enhanced overall returns. Portfolios with moderate to high equity exposure have also fared well, sup ported by the strong compounding effect of Indian equities over the period.


On the other hand, more conservative portfolios with higher allocations to debt have generated relatively modest returns over the past decade.

Source: ACE MF. *2026 data is YTD based on 25 August 2026 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. Bench marks used: Equity: Nifty 500 Index, Debt: Crisil Composite Bond Index, Gold: Nippon India ETF Gold BeES.