Smallcaps are top asset class in 2026 so far, but did they beat gold, silver, debt in the long run? 10-year performances compared

Metals and midcaps rule the decade

After a sharp correction in late 2025 and early 2026, small-cap stocks staged a strong recovery as earnings prospects improved and valuations turned reasonable. The segment also benefited from a better risk-reward equation following the sell-off. However, the rebound was far from broad-based, with gains concentrated in a relatively small group of stocks rather than being evenly distributed across the universe. Gold continued to serve as an effective portfolio hedge despite heightened volatility. The metal drew support from recurring geopolitical tensions in West Asia, sustained central bank purchases, and concerns surrounding inflation and currency stability. Mid-cap stocks, meanwhile, benefited from a stable interest-rate environment and improving domestic demand, though returns remained moderate.

The 10-year gilt index delivered positive returns but significantly underperformed short-term debt instruments. Rising bond yields and concerns over inflation weighed on long-duration bonds, while higher accrual income helped short-term debt generate superior returns.

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Silver emerged as the laggard in 2026 so far. Following an extraordinary 169% rally in 2025, the metal came under pressure from profit booking, expectations of higher real interest rates, and volatility across precious metals. Although long-term industrial demand linked to clean energy and technology remains supportive, silver witnessed a sharp correction from its previous highs.

Long-term performance

Over the past decade, silver has been the best-performing asset class, followed by gold. The strong performance of precious metals reflects an era marked by uncertainties, including the pandemic, geopolitical conflicts, elevated inflation, increased central bank buying and periodic weakness in major currencies.

Among equity segments, mid-cap stocks delivered the highest returns, driven by robust earnings growth. Although large-cap stocks trailed both mid- and small-caps in terms of returns, they continued to create decent wealth over the decade.

Source: Bloomberg and ACE MF. *2026 data is YTD based on 21 July 2026 closing values. Other year returns are calculated between the first and the last trading day closing values. Benchmarks used: Equity (Large cap): Nifty 50,Equity (Midcap): Nifty Midcap 100 Index, Equity (Small cap) : Nifty Smallcap 100 Index, Silver: MCX Silver futures, Gold: MCX Gold futures, G-Sec 10-Yr : Crisil 10 Yr Gilt Index, Debt (Short-term) : Crisil 91 Day T-Bill Index