Category Averages · SEBI-Compliant · June 2026

India Investment Returns
Reference 2026

Historical CAGR data for every major asset class in India - equity mutual funds, debt funds, gold, REITs, and NSE/BSE indices. Category averages across multiple funds so you compare apples to apples, not a cherry-picked fund to the market.

Equity MF Category Averages
Debt Fund Returns
NSE/BSE Index CAGR
Gold & Silver
REITs & InvITs
Inflation Reference
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Equity Mutual Funds Hybrid Funds ETFs & Index Funds Debt Mutual Funds NSE/BSE Index Returns Gold & Silver REITs & InvITs Market Summary Inflation Reference

How to Read This Page

Turn data into decisions, not noise.

Every number on this page is a category average CAGR across multiple funds - not the return of one specific scheme. This matters: SEBI prohibits recommending specific funds without an investment advisory licence. What we can do - and what helps you far more - is show you what the category typically delivers, so you have a grounded baseline before you pick any fund.

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CAGR = Compounded Annual Growth Rate

Returns over 1 year are absolute. Returns over 3, 5, 7, 10 years are annualised. A 5Y CAGR of 15% means your money grew at 15% per year compounded - not 75% total.

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Data as of June 2026

All 1-year returns reflect the 12-month window ending June 2026. Indian equities fell ~8% from their June 2025 peak. Do not use 1-year returns as planning assumptions - use 5Y or 10Y.

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Use ranges, not point estimates

Every return shown is a range (e.g. 13-17%). This reflects the spread across funds in the category. Assume your fund will sit somewhere in the middle of that range, not at the top.

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Match the horizon to the goal

For goals 7+ years away, equity averages (10Y CAGR) are most relevant. For 3-5 year goals, use balanced or hybrid benchmarks. For under 3 years, stay with debt or liquid instruments.

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Inflation eats your real return

An equity return of 12% when inflation is 5.3% gives a real return of ~6.4%. Always subtract your inflation assumption from nominal returns to check if you are actually getting ahead.

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Data benchmarks. Goals decide.

Use these numbers to define your investment goals and make informed decisions - not to replace a conversation with a qualified investment expert. Selecting funds, timing SIPs, and rebalancing require personalised guidance.

Section 1 — Equity Mutual Funds

Equity Mutual Fund Returns - Category Averages

Equity mutual funds invest primarily in stocks and are designed for long-term wealth creation. SEBI has defined distinct categories - Large Cap, Mid Cap, Flexi Cap, and so on - so that each fund stays within a defined mandate. The table below shows category average CAGR across multiple funds, compiled from AMFI, Value Research, NSE India, and aggregated data platforms covering at least 4-5 funds per category.

The June 2026 data sits in an unusual context: Nifty 50 was near its all-time peak of ~25,500 in June 2025 and fell to ~23,538 by June 2026 (-7.7%). This explains why 1-year returns are largely negative for large caps. Mid caps, however, had already corrected from their October 2024 peak before June 2025 and delivered positive 1-year returns. Do not anchor your expectations on either number - use 5Y and 10Y CAGR for planning.

June 2026 market context: Nifty 50 at 23,538 (down ~8% from June 2025). Nifty Midcap 150 TRI: +11.07% for the same period. Gold surged +49% YoY. This table reflects trailing 12-month actuals - use 5Y/10Y columns for long-term planning assumptions.

Table 1A - Pure Equity Funds

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Fund Category 10-Year CAGR 7-Year CAGR 5-Year CAGR 3-Year CAGR 1-Year Return* Benchmark Reference
Large Cap Funds13-16%13-16%12-16%12-16%-4% to -7%Nifty 100 TRI
Large & Mid Cap Funds14-18%14-18%15-20%14-20%0% to +8%Nifty LargeMidcap 250 TRI
Multi Cap Funds14-18%14-18%15-21%13-19%-2% to +8%Nifty 500 Multicap 50:25:25
Flexi Cap Funds13-17%13-17%15-22%14-20%-2% to +6%Nifty 500 TRI
Mid Cap Funds19-24%18-23%18-24%20-27%+5% to +13%Nifty Midcap 150 TRI
Small Cap Funds13-20%17-23%17-24%17-25%-3% to -10%Nifty Smallcap 250 TRI
Micro Cap / ThematicN/A-20%N/A-21%19-30%16-28%-5% to -15%Varies by theme
ELSS / Tax Saving Funds13-17%13-17%13-19%14-20%-3% to -7%Nifty 500 TRI
Focused Funds (max 30 stocks)13-18%13-18%14-21%12-18%-3% to +4%Nifty 500 TRI
Value / Contra Funds13-18%13-18%14-22%14-21%0% to +5%Nifty 500 TRI
Dividend Yield Funds12-17%12-17%14-21%13-21%+1% to +6%Nifty Dividend Opp 50 TRI
 Source: AMFI, Value Research, NSE India, INDmoney, ACE MF. Category averages across 4-5+ funds. Not a specific fund recommendation. * 1-year = trailing 12 months ending June 2026.

How to use this for your decision: If your goal is 10+ years away, the 10Y CAGR column is your planning anchor - equity has delivered 13-24% CAGR depending on category. Mid Cap and Small Cap show higher CAGR but also higher volatility (negative years are common). Large Cap is your core. If you cannot stomach a -15% year, stay Large Cap or Flexi Cap. Match the category to your risk tolerance, not to whichever number looks highest right now.

Table 1B - Hybrid Mutual Funds

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Fund Category 10-Year CAGR 7-Year CAGR 5-Year CAGR 3-Year CAGR 1-Year Return* Risk Profile
Aggressive Hybrid (65-80% Equity)11-15%12-15%13-17%14-20%-3% to +6%Moderate-High
Balanced Advantage / BAF10-14%11-14%10-15%10-15%+2% to +6%Moderate
Multi Asset Allocation12-16%12-16%11-15%15-22%+6% to +15%Moderate (gold uplift)
Equity Savings Funds8-12%8-12%8-12%8-10%+10% to +16%Low-Moderate
Conservative Hybrid (10-25% Equity)8-11%8-11%7-11%7-12%+6% to +9%Low-Moderate
Arbitrage Funds5.5-6.5%6-7%6-7%6.5-7.5%6.5-7.5%Low (near debt)
 Source: Tickertape, Business Standard, HDFC MF, ICICI Pru MF, Tata MF category data. Returns are category averages, not specific fund performance.

Why hybrid funds shone in June 2026: The multi-asset allocation category benefited enormously from gold's 49% YoY surge. Equity savings funds and conservative hybrid funds also delivered positive 1-year returns while pure equity categories struggled - this is hybrid's core value: smoother returns across market cycles. If you are within 3-5 years of a goal, hybrid over pure equity.

Table 1C - Equity ETFs & Index Funds

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Index / ETF Category 10-Year CAGR 7-Year CAGR 5-Year CAGR 3-Year CAGR 1-Year Return* Notes
Nifty 50 ETFs / Index Funds12-14%11-13%9-11%8-11%-5% to -7%Tracks Nifty 50 TRI; lowest cost investing
Nifty Next 50 ETFs13-16%13-17%17-21%14-19%-1% to +3%Large-cap ex-top-50; different 1Y base vs Nifty 50
Nifty 100 ETFs12-15%12-15%13-16%11-14%-2% to -5%Blends Nifty 50 and Next 50 by market cap
Nifty Midcap 150 ETFs14-18%14-17%16-18%19-22%+9% to +12%Direct mid-cap index exposure; 1Y strongly positive
Nifty Smallcap 250 ETFs11-14%14-18%15-18%17-20%-4% to -6%High volatility; long horizon needed
Nifty 500 ETFs / Index Funds13-16%12-15%11-14%11-15%-1% to -3%Broadest market exposure; all cap sizes
Sector ETFs (Bank / IT / Pharma)VariesVariesVariesVariesVariesSector-concentrated; not for core allocation
International / US Tech ETFs15-22%16-24%18-24%20-28%+12% to +35%USD + INR depreciation uplift; RBI limits apply
 Source: Nippon India ETF (confirmed June 2026), Axis MF May 2026 factsheet, Motilal Oswal fund pages, INDmoney, Tickertape. All TRI returns.

Index funds vs active funds: Over 10 years, most active large-cap funds struggle to beat Nifty 50 or Nifty 100 consistently after expenses. ETFs with expense ratios of 0.10-0.20% vs active funds at 1.0-1.5% - that 1% compounded over 20 years is significant. For your core large-cap allocation, a Nifty 50 or Nifty 500 index fund is a defensible choice. Use active funds selectively in Mid Cap and Small Cap where alpha generation is still achievable.

Best 10Y performer (category)

19-24%

Mid Cap Funds - highest long-run CAGR but demands 10Y+ commitment to ride out volatility.

Defensive in June 2026 market

Value / Contra

0% to +5% in 1Y while most equity was negative - defensive large-value tilt paid off.

Surprise of the year

+12% to +35%

International ETFs - S&P 500 India fund delivered 34.3% in INR for 1Y, beating all domestic equity.

Gold-lifted winner

+6% to +15%

Multi Asset Allocation - gold's 49% surge powered category-beating 1Y return despite equity drag.

Put these rates to work. Model a monthly SIP into Large Cap, Mid Cap, Flexi Cap, or any equity category and see your projected corpus.

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Section 2 — Debt Mutual Funds

Debt Mutual Fund Returns - Category Averages

Debt mutual funds invest in bonds, government securities, and money market instruments. Their returns are heavily shaped by the interest rate cycle. Between 2021 and 2024, the RBI raised the repo rate from 4% to 6.5% to combat inflation - this created capital losses in long-duration debt funds even as short-term yields were rising. Since early 2025, the easing cycle began (repo rate cut to 6.25% as of June 2026), which has boosted medium and long-duration fund returns.

The 5-year column shows lower returns than the 3-year or 1-year for most categories because the 5Y period includes the painful 2022-2024 rate-rise window. This is not a permanent feature of debt - in a stable or falling rate environment, medium-to-long duration funds can deliver significantly more than short-duration funds.

Critical tax note: From April 2023, debt mutual fund gains (regardless of holding period) are taxed at your income slab rate. The indexation benefit was withdrawn. This changes the post-tax attractiveness significantly versus bank FDs - run the numbers before choosing.

Which debt fund for which goal: Emergency fund / parking money: Liquid or Overnight Fund. Under 1 year: Ultra Short or Low Duration. 1-3 years: Short Duration or Corporate Bond. 3-5 years & rate cut expected: Medium or Medium-to-Long Duration. Long term / rate bet: Gilt or Dynamic Bond (higher volatility). For most salaried investors, Corporate Bond or Banking & PSU Debt are the risk-adjusted sweet spot.

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Fund Category 10-Year CAGR 7-Year CAGR 5-Year CAGR 3-Year CAGR 1-Year Return Duration / Notes
Overnight FundsN/A5-6%5-6%6.5-7%6.5-7.2%Overnight maturity; near-zero risk
Liquid Funds6.5-7%6.5-7%5.5-6.5%6.5-7.5%7-7.5%Max 91-day maturity; T+1 redemption
Money Market Funds7-7.5%7-7.5%6-7%7-7.5%7-7.5%Avg maturity max 1 year
Ultra Short Duration7-7.5%7-7.5%6-7%7-7.5%7-7.5%3-6 months duration
Low Duration Funds7-8%7-8%6.5-7.5%7.5-8%7.5-8%6-12 months duration
Short Duration Funds7.5-8%7.5-8%6-7.5%7-8%7.5-8.5%1-3 year duration
Medium Duration Funds8-9%7.5-8.5%7-8%7-8%8-10%3-4 year duration; category avg ~8.7% 1Y
Medium-to-Long Duration8-9%7.5-9%6.5-9%7-9%8-12%4-7 year duration
Long Duration / Gilt Funds8-10%7.5-9%6-9%7-9%8-14%7+ year duration; rate sensitive
Corporate Bond Funds7.5-8.5%7.5-8%6.5-7.5%7.5-8%7.5-8.5%AA+ rated; min 80% in top-rated debt
Banking & PSU Debt Funds7.5-8%7.5-8%7-7.5%7.5-8%7.5-8%Quasi-sovereign safety; high quality
Credit Risk Funds8-10%8-9.5%8-9%8-9%8.5-10%Min 65% in AA or below; higher credit risk
Floater FundsN/A7-8%6.5-7.5%7-8%7.5-8%Floating rate; low duration risk
Dynamic Bond Funds7.5-9%7.5-8.5%7-8.5%7-9%8-13%Active duration management
 Source: SBI, ICICI Pru, Bandhan, Parag Parikh fund data via INDmoney, Value Research. Business Standard medium duration category data. Category averages across multiple schemes.
Safe parking (short-term)

7-7.5%

Liquid funds - earning close to repo rate with daily liquidity. Better than savings account for surplus cash.

Rate-cut beneficiary

8-14%

Long Duration / Gilt - if RBI continues rate cuts, these funds can deliver double-digit 1Y returns from capital appreciation.

Quality + yield sweet spot

7.5-8.5%

Corporate Bond Fund - AAA-rated, reasonably liquid, steady 3Y returns, and lower volatility than gilt funds.

Model a debt allocation. Use the SIP Planner to project Liquid, Short Duration, or Corporate Bond fund growth across your time horizon.

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Section 3 — NSE & BSE Index Returns

Nifty 50, Midcap & Sector Index Historical Returns

Index returns are the baseline against which all active mutual funds are compared. TRI (Total Return Index) includes dividend reinvestment and adds approximately 1.5% per year over price returns - always use TRI for comparing against mutual fund NAVs, since fund returns include dividends automatically. Price return indices do not include dividends and will appear ~1.5% lower per year.

The June 2026 data reveals a sharp divergence within the Indian market. Large-cap indices (Nifty 50, Sensex) were near their all-time peak in June 2025 and corrected, producing negative 1-year returns. Mid cap (Nifty Midcap 150) had already corrected from its October 2024 peak before June 2025, and subsequently recovered - delivering a positive 1-year return of +11.07% in TRI terms. PSU Bank and Pharma indices also outperformed significantly. This divergence is why broad-market benchmarks do not tell the full story of any given 12-month window.

Key confirmed June 2026 data points: Nifty 50 = 23,538 (1Y: -7.7% price). Nifty Midcap 150 TRI 1Y = +11.07%. Nifty Next 50 TRI 1Y = +2.09%. Nifty 500 TRI 1Y = -2.14%. Nifty Bank 1Y = -2.52%. Nifty IT 1Y = -5.57%. Nifty PSU Bank = +20% to +40% (rose 31% in CY2025). Gold (MCX) 1Y = +49%.

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Index 10-Year CAGR 7-Year CAGR 5-Year CAGR 3-Year CAGR 1-Year Return*
Nifty 50 (Price Return)11-12%10-12%8-9%7-9%-7% to -9%
Nifty 50 TRI (Total Return)12-14%11-13%9-11%8-11%-5% to -7%
BSE Sensex (Price Return)11-12%10-12%8-10%7-9%-6% to -8%
BSE Sensex TRI12-14%11-13%9-11%8-11%-5% to -7%
Nifty Next 5014-17%13-17%17-21%14-19%-1% to +3%
Nifty Midcap 150 (TRI)16-20%15-18%16-18%19-22%+9% to +12%
Nifty Smallcap 25010-13%14-18%15-18%17-21%-4% to -6%
Nifty 500 (Broad Market)13-16%12-15%11-14%11-14%-1% to -3%
Nifty Microcap 250N/A13-18%17-24%12-20%-10% to -18%
Nifty IT Index15-20%16-22%14-20%4-10%-3% to -9%
Nifty Bank Index11-14%10-13%9-12%7-11%-1% to -4%
Nifty Pharma Index12-16%12-16%14-18%12-18%+5% to +15%
Nifty Infrastructure10-14%10-15%13-18%10-16%-3% to -8%
Nifty PSU Bank Index8-13%8-14%14-22%12-20%+20% to +40%
 Source: NSE India index factsheets, Tickertape, Bajaj AMC, Multibagg.ai, Motilal Oswal. * 1-year = trailing 12 months ending June 2026. TRI = Total Return Index (includes dividends).

Why this table matters for fund selection: Before choosing an active fund, check what its benchmark index returned. If your mid-cap active fund returned 10% over 3 years, but the Nifty Midcap 150 TRI returned 19-22%, you underperformed significantly after fees. This table gives you the benchmark to hold your fund manager accountable. Rule of thumb: If your active fund hasn't beaten its benchmark index by at least 1.5-2% over 5+ years, a cheaper index fund is the better choice.

Index fund SIP projections. Model a Nifty 50 or Nifty 500 index SIP using conservative, moderate, or custom return assumptions.

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Section 4 — Gold & Silver

Gold & Silver Investment Returns - June 2026

Gold has delivered one of the most remarkable multi-year runs in recent Indian financial history. From Rs 28,500 per 10g in June 2016, it has reached Rs 1,49,230 per 10g in June 2026 - a 10-year CAGR of approximately 18% in INR. This includes the exceptional 1-year return of ~49% (from Rs 99,800 in June 2025). The drivers: global safe-haven demand, USD weakness against other currencies, central bank gold accumulation (especially by BRICS nations), and geopolitical uncertainty in the Middle East and Eastern Europe.

However, gold's long-run historical average in INR is 8-11% CAGR over very long periods. The current 3Y, 5Y, and 7Y CAGRs of 33%, 25%, and 24% respectively are extraordinary - driven by a structural re-rating by central banks. Investors should not extrapolate these returns forward. The appropriate portfolio allocation to gold for most investors is 10-15%, primarily as a hedge, not as a primary return driver.

Investment vehicles for gold: Gold ETFs and Sovereign Gold Bonds (SGBs) are the preferred routes - no making charges, no storage risk, no purity uncertainty. SGBs earn an additional 2.5% p.a. interest, and maturity redemption is fully tax-exempt for individuals. Note: RBI discontinued new SGB issuances in FY2025-26. Existing SGBs continue to maturity.

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Instrument 10-Year CAGR 7-Year CAGR 5-Year CAGR 3-Year CAGR 1-Year Return* Notes
Physical Gold (INR price)~17-18%~24-25%~25-26%~33-36%~47-50%MCX Spot. June 2026: Rs 1,49,230/10g
Gold ETFs (listed)~17-18%~24-25%~25-26%~33-36%~46-49%Mirrors spot; subtract ER of 0.10-0.50%
Gold Fund of Funds~16-17%~23-24%~24-25%~32-35%~44-48%Invests in Gold ETFs; slightly higher costs
Sovereign Gold Bond (SGB)~17-19%~24-26%~25-27%~33-37%~47-50%Spot + 2.50% p.a. interest; maturity tax-free
Silver ETFsN/AN/A~18-30%~15-28%~20-35%Listed from 2021; limited history; more volatile
Multi Commodity Basket (gold-heavy)N/A~18-22%~20-24%~25-30%~30-40%Blended gold/silver; gold weight varies by fund
 Source: MCX gold spot price, NSE Gold ETF NAVs, SEBI/AMFI, Goodreturns.in. All INR returns. * Trailing 12 months ending June 2026.
10-Year MCX Gold CAGR

~17-18%

From Rs 28,500 (June 2016) to Rs 1,49,230 (June 2026). A historic decade for gold in INR.

Best vehicle (new investors)

Gold ETF

Pure gold exposure, low cost, daily liquidity. Start with Rs 500-1000 SIP via Gold ETF or Gold Fund of Fund.

Best vehicle (hold to maturity)

SGB

Spot price gain + 2.5% p.a. interest + zero Capital Gains Tax on maturity. The most tax-efficient gold investment - when available.

Gold SIP or lump sum? Project how a Gold or Multi-Asset SIP compounds at 8-14% over 10, 15, or 20 years.

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Section 5 — REITs & InvITs

REIT & InvIT Returns - Since Listing

Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) are India's newest listed asset class, most having debuted between 2017 and 2023. They provide exposure to institutional commercial real estate and infrastructure through a regulated, exchange-listed structure - without the capital, illiquidity, and legal complexity of owning property directly.

Price appreciation has been moderate for most REITs and InvITs (many trade close to or slightly above their issue price). The real return driver is the regular Distribution Per Unit (DPU) - REITs must distribute 90% of their net distributable cash flows. Total returns (price + DPU yield) range from 9-18% depending on the instrument. As of FY2026, Embassy, Mindspace, and Nexus have seen strong YTD price appreciation, reflecting improving leasing markets and rental escalations.

Who should consider REITs/InvITs: Investors seeking regular income (like a rental property but without the hassle), portfolio diversification beyond equity and debt, and exposure to commercial real estate or infrastructure. REITs and InvITs are interest-rate sensitive - unit prices typically fall when rates rise. With the current rate-cut cycle, they stand to benefit. Minimum allocation: Rs 15,000-20,000 per unit; suitable for conservative to moderate investors.

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Instrument Listed Since Price CAGR (since listing) DPU Yield (FY26) Total Return CAGR (est.) Notes
Embassy Office Parks REITApr 2019~0-3%~7-8%~9-11%India's largest office REIT; 33 msf portfolio
Mindspace Business Parks REITAug 2020~2-5%~7-8%~9-12%30+ msf; Hyderabad/Mumbai/Pune
Brookfield India REITFeb 2021~1-4%~8-9%~9-12%Mumbai/Gurgaon/Noida/Kolkata
Nexus Select Trust (Retail REIT)May 2023~5-10%~8-9%~13-18%India's first retail/mall REIT; 17 Grade-A malls
Knowledge Realty TrustJun 2025Too early~7%N/AOffice; Bengaluru/Chennai; recently listed
IndiGrid InvIT (Power)Jun 2017~2-5%~10-12%~12-16%Sterlite Power; regulated revenue
IRB InvIT FundMay 2017~0-3%~10-12%~10-14%Toll roads; traffic-linked revenue
PowerGrid InvITJul 2021~3-6%~10-12%~13-16%PGCIL sponsor; transmission assets
Nifty REITs & InvITs IndexJul 2021~2-5%~8-10%~10-14%Composite index; all listed REITs + InvITs
 Source: NSE India REIT/InvIT factsheets, SEBI, company investor presentations, Nifty REITs & InvITs Index. Total return estimated as price CAGR + distribution yield.

Model your investment growth. Use the lump sum mode in the SIP Planner to project REIT or InvIT-style returns on a one-time allocation.

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Section 6 — Overall Market Summary

Cross-Asset Return Comparison & Risk Indicators

This table consolidates all major asset classes into a single comparison view, alongside two risk indicators: Beta (sensitivity to Nifty 50 movements) and Standard Deviation (annualised return volatility). This is the table to use for asset allocation decisions - comparing what each class has delivered over long periods against how much volatility it introduces to your portfolio.

Two patterns stand out in June 2026 data: Gold's exceptional returns across all time horizons (driven by a structural re-rating), and the counterintuitive positive 1-year return for Mid Cap while Large Cap was negative. Both represent point-in-time observations, not permanent shifts. The 10-year CAGR column is the most reliable guide for setting long-term expectations.

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Asset Class 10-Year CAGR 7-Year CAGR 5-Year CAGR 3-Year CAGR 1-Year* Avg Beta Std Dev (5Y)
Broad Equity Market (Nifty 500 TRI)13-16%12-15%11-14%11-14%-1% to -3%1.00 (mkt)~16-18%
Large Cap Equity (Nifty 100 TRI)12-14%11-13%9-11%8-11%-5% to -7%~0.90-1.0~14-16%
Mid Cap Equity (Nifty Midcap 150 TRI)17-20%15-18%16-18%19-22%+9% to +12%~0.90-1.1~18-22%
Small Cap (Nifty Smallcap 250 TRI)10-13%14-18%15-18%17-21%-4% to -6%~0.85-1.0~22-28%
Gold (MCX Spot, INR)~17-18%~24-25%~25-26%~33-36%~47-50%~0.0 (neg. corr.)~18-24%
Debt Market (CRISIL Composite Bond)7.5-8.5%7.5-8.5%7-8%7.5-8.5%8-10%~0.0~4-6%
REITs & InvITs (Nifty Index)N/A~3-6%~10-14%~8-12%~10-18%~0.3-0.5~12-16%
Arbitrage Funds5.5-6.5%5.5-6.5%6-7%6.5-7%6.5-7.5%~0.0~0.5-1%
Fixed Deposits (SBI, 3-5Y)6-7%6-7%6-7%7-7.5%6.5-7%N/A~0%
PPF (Government)7.1%*7.1%*7.1%*7.1%*7.1%N/A~0%
 Source: NSE India, CRISIL, AMFI, RBI. Beta and Std Dev are indicative rolling 5-year averages. * PPF rate as declared by government (current rate).

Building an allocation from this table: A classic 60:20:20 portfolio (60% equity / 20% debt / 20% gold) over 10 years would have blended approximately: 60% × 13% + 20% × 8% + 20% × 18% = 7.8% + 1.6% + 3.6% = ~13% blended CAGR. After inflation of ~5.3%, the real return is ~7.3%. At that rate, money doubles in real terms every ~10 years. This is the core math of long-term wealth building.

Run your own allocation projections. Pick any asset class from this summary and see what a SIP or lump sum looks like at your time horizon.

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Section 7 — Inflation Reference

India Inflation Rate - Historical Data for Investment Planning

Inflation is the silent tax on your savings. Every financial plan - retirement corpus, education fund, insurance sum assured - must account for the purchasing power erosion that inflation creates. Yet most people use a single round number (often 6% or 7%) without checking what India's actual inflation history looks like.

The data below uses CPI (Consumer Price Index) - All India Combined, the RBI's formal inflation target. India's inflation has changed structurally: the 2006-2016 decade averaged 8-9% (global commodity supercycle + structural food inflation). The RBI's Flexible Inflation Targeting (FIT) framework, adopted in 2016 with a 4% target (+/- 2% band), has significantly anchored inflation. The last 10 years average 4.9%; the RBI's long-term aspiration remains 4%.

Table 7A - 5-Year Block Averages (FY2006-07 to FY2025-26)

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5-Year Block (Financial Year) Avg CPI Range (Lo-Hi) Dominant Driver RBI Stance
FY2006-07 to FY2010-11 (High Inflation Era)9.0%6.4% - 12.4%Global commodity surge; food prices; MGNREGA wage pushTightening; repo 6.25% to 4.75% (post-GFC cut)
FY2011-12 to FY2015-16 (Persistently Elevated)7.9%4.9% - 10.2%Structural food inflation; fiscal deficit; INR depreciationHawkish; repo 8.50% peak; FIT framework set up
FY2016-17 to FY2020-21 (FIT Target Band Era)4.5%3.4% - 6.2%FIT discipline; demonetisation supply shock; COVID demand crashAccommodative; repo 6.25% to 4.00%
FY2021-22 to FY2025-26 (Post-COVID Cycle)5.3%4.0%* - 6.7%COVID supply disruptions; Russia-Ukraine commodity surge; normalisationTightening then easing; repo 4.00% to 6.50% to 6.25%
 Source: MOSPI/NSO CPI press releases, RBI DBIE database, RupayWise. * FY2025-26 is estimated (4.0% per Crisil/RBI MPC Feb 2026 projection).

Table 7B - Recommended Inflation Assumptions for Investment Planning

Time Horizon Avg CPI Inflation Period Covered Suggested Use in Planning
Trailing 20 Years~6.7%FY2006-07 to FY2025-26Conservative long-horizon planning (education, estate, endowments)
Trailing 10 Years~4.9%FY2016-17 to FY2025-26Balanced planning; post-FIT-framework reference rate
Trailing 5 Years~5.3%FY2021-22 to FY2025-26Near-term adjustment; insurance sum assured, retirement cash-flow updates
RBI Target (Long-term)4.0%FIT Framework targetAspirational best-case; use only with explicit assumption disclosure
 Source: MOSPI, RBI. Use trailing 10Y (4.9%) as your default planning assumption for most financial goals.

Which inflation rate should you use in your financial plan? For retirement projections (20-30 year horizon), use the 20-year average of 6.7% as a conservative assumption. For a 10-year goal (child's education), use 5-6%. For insurance sum-assured reviews (3-5 year cycles), use the trailing 5-year figure of 5.3%. The RBI's 4% target is aspirational and should only be used if you are stress-testing a best-case scenario. When in doubt, run your plan at 6% and 4% and see the difference - that gap tells you your planning margin.

Conservative planning rate

6.7%

20-year trailing CPI average. Use this for retirement and long-horizon goals. It includes two high-inflation decades.

Balanced planning rate

4.9%

10-year trailing CPI average. Post-FIT-framework inflation. The recommended default for most financial plans.

Real return (equity, 10Y)

~7-9%

Equity (Nifty 500) 10Y CAGR of ~13-16% minus 4.9-6.7% inflation. Your wealth grows in real terms only if returns exceed inflation.

Beat inflation with long-term SIPs. Model how equity or balanced fund SIPs compound over 10-30 years - and how far ahead of inflation they stay.

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Ready to put the data to work?

Data tells you what has happened.
Your goals tell you what to do next.

Now that you know what different categories have historically returned, the next question is: what does this mean for your specific goals, timeline, risk appetite, and tax situation? That is a conversation - not a table. A coaching session can help you read these numbers in the context of your own plan.

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Fund Type Glossary

What is each fund type and how does it help you invest?

Click any question to understand the fund category - what it owns, who it suits, and how it fits into a financial plan.

← Back to SIP & Investment Planner - use these definitions to choose your asset class in the calculator.

A Large Cap Fund invests at least 80% of its corpus in the top 100 companies by market capitalisation on Indian exchanges. These are well-established businesses with stable earnings, strong governance, and lower volatility than mid or small cap companies. Who it suits: investors with a 5-7 year horizon wanting equity growth with relative stability. Ideal as a core long-term holding.
A Mid Cap Fund invests at least 65% in companies ranked 101-250 by market cap - companies in a growth phase, not yet large cap but beyond the early stage. They offer higher return potential over long periods but with higher short-term volatility. Who it suits: investors with a 7+ year horizon who can stay invested through drawdowns and want to accelerate wealth creation beyond large caps.
A Small Cap Fund invests at least 65% in companies ranked 251 and beyond. These carry the highest growth potential among equity categories but also the highest risk - liquidity is lower and price swings can be severe. Who it suits: aggressive investors with a 10+ year horizon. Best used as a satellite allocation (10-20% of equity) alongside more stable funds, not as a standalone core holding.
A Flexi Cap Fund has the freedom to invest across large, mid, and small cap companies in any proportion. The fund manager dynamically shifts allocation based on valuations and market conditions. Why it's popular: one fund gives you diversification across the market cap spectrum without managing multiple funds. A strong choice as a primary equity holding for a 7+ year horizon.
ELSS (Equity Linked Savings Scheme) funds invest predominantly in equities and qualify for a deduction of up to Rs 1.5 lakh per year under Section 80C (Old Tax Regime only). They have the shortest lock-in period among all 80C instruments - just 3 years. Long-term use: ELSS functions as a standard equity fund after the lock-in. Staying invested beyond 3 years lets compounding work on the same corpus that earned you a tax deduction.
Value and Contra funds follow a contrarian philosophy - they buy stocks that appear undervalued relative to intrinsic worth, or which the broader market is currently avoiding. They may underperform in momentum-driven markets but can outperform significantly when sentiment reverts. Who it suits: patient, long-term investors who believe in fundamentals over momentum, comfortable holding through extended periods of underperformance.
International funds invest in equities of companies listed outside India - US, European, and Asian markets. They add geographic diversification to a portfolio entirely dependent on India's economic cycle, and provide indirect currency exposure (INR depreciation vs USD historically benefits returns). Best use: 10-15% satellite allocation for investors with 5+ year horizons seeking true global diversification. Note: SEBI currently restricts Indian MFs from accepting new international fund flows pending overseas investment limits.
Multi Asset Allocation Funds invest across at least three asset classes - typically equity, debt, and gold - with a minimum 10% in each. The manager rebalances between them based on valuations and macro conditions. Who it suits: investors who want automatic asset allocation in a single fund, or moderate-risk investors who want equity exposure without the full volatility of a pure equity fund. A reasonable fit for 3-5 year goals.
Aggressive Hybrid Funds invest 65-80% in equities and 20-35% in debt. The debt component cushions equity market corrections, making these funds less volatile than pure equity. Who it suits: first-time equity investors or those with a 4-5 year horizon who want equity growth with lower drawdown. They retain equity taxation (held over 1 year) due to the equity-dominant structure - an important tax efficiency advantage.
BAFs dynamically shift between equity and debt based on market valuations - typically using proprietary models based on P/E ratios. When markets are expensive, equity allocation reduces; when markets are cheap, equity increases. They can hold 0-100% equity, unlike hybrid funds with fixed bands. Who it suits: moderate investors with 3-5 year goals who want equity-linked returns with actively managed risk reduction during expensive markets.
Liquid Funds invest in debt and money market instruments maturing within 91 days. They preserve capital while generating returns slightly above a savings account - typically 6-7% per annum. Best use: emergency fund or short-term surplus you may need within 3 months. Redemptions settle within one business day. Not designed as a long-term investment - use them as your most liquid, near-cash holding.
Ultra Short Duration Funds hold debt with a Macaulay Duration of 3-6 months - slightly longer than liquid funds. They carry marginally more interest-rate sensitivity but typically offer slightly better returns. Best use: parking money for 3-6 months where you want better yield than a liquid fund but still need relatively quick access. A good stepping stone between a savings account and a short duration fund.
Short Duration Funds invest in debt with a Macaulay Duration of 1-3 years. They generate better returns than liquid or ultra-short funds when rates are stable or falling. Best use: an alternative to fixed deposits for a 1-2 year investment horizon. Returns are generally 7-8% pre-tax. Since the 2023 tax amendment, debt fund gains are taxed at your slab rate regardless of holding period - so the FD vs debt fund comparison is now primarily about flexibility and liquidity.
Corporate Bond Funds invest at least 80% in AA+ and above rated corporate bonds. They offer higher yield than government securities of similar tenure while maintaining high credit quality. Returns are typically 0.3-0.6% higher than equivalent government bond funds. Who it suits: conservative to moderate investors seeking better-than-FD returns over 2-3 years, comfortable with some mark-to-market variation in the interim.
Banking and PSU Debt Funds invest at least 80% in bonds issued by banks, public sector undertakings, and public financial institutions. These issuers are considered very high quality - government-owned entities or large regulated banks. Why it stands out: a good balance of safety and yield, typically outperforming pure government bond funds while maintaining very low credit risk. A suitable FD substitute for investors with a 1-3 year horizon seeking predictable, high-quality returns.
Dynamic Bond Funds shift portfolio duration from short to very long depending on the manager's interest rate view. When rates are expected to fall, the manager takes long-duration positions to maximise capital appreciation. When rates are expected to rise, duration is shortened. Who it suits: investors with 3+ year patience who want an actively managed debt solution without choosing a specific duration bucket themselves. Returns can be highly variable in the short term.
Gilt Funds invest exclusively in government securities (G-Secs) issued by the central or state governments. They carry zero credit risk - the Government of India cannot default on rupee-denominated debt. However, they carry high interest-rate risk: G-Sec prices move inversely with rates. During rate-cutting cycles, gilt funds can deliver 10-15% returns. Who it suits: investors who understand interest rate dynamics and are positioning for rate cuts, with a minimum 3-5 year horizon.
A Nifty 50 Index Fund passively replicates the Nifty 50 index by holding the same 50 stocks in the same proportions. There is no active fund management - costs are very low (expense ratios of 0.05-0.20%). Research consistently shows most actively managed large cap funds underperform the Nifty 50 index over 10+ year periods after accounting for costs. Why it works: the lowest-cost, most transparent way to gain Indian large cap equity exposure with no manager selection risk.
A Gold ETF tracks the price of 99.5% pure gold - each unit typically represents approximately 1 gram. Unlike physical gold there is no storage cost, no making charges, no purity risk, and it is fully dematerialised. You buy and sell on the stock exchange like a share. Best use: 5-10% of a diversified portfolio as an inflation hedge or safe-haven allocation. Capital gains are taxed at your slab rate (same as debt funds post-2023 amendment) for new purchases.
Sovereign Gold Bonds (SGBs) are government securities denominated in grams of gold. They track the gold price and additionally pay 2.5% annual interest. Most importantly, capital gains at maturity (8 years) are completely tax-free. Why it wins on tax: gold price appreciation + 2.5% annual interest + zero capital gains tax at maturity makes SGBs the most tax-efficient form of gold investment in India. The tradeoff is illiquidity - secondary market exit is possible but at a discount. Note: new SGB issuances have been paused as of 2025; existing bonds can still be bought on exchanges.
A Real Estate Investment Trust (REIT) is a listed entity that owns income-generating commercial real estate - typically Grade A office parks, IT campuses, or retail malls in India. REITs must distribute at least 90% of distributable income as dividends, making them a regular income instrument. Why it's useful: you participate in institutional-grade commercial real estate returns with investments starting from Rs 250-300 per unit, and with stock-exchange liquidity that physical real estate cannot offer.
An InvIT is similar in structure to a REIT but invests in infrastructure assets - toll roads, power transmission lines, gas pipelines, and renewable energy projects. These generate long-term, contracted cash flows distributed to unit holders. Who it suits: income-seeking investors (typically HNIs or sophisticated investors) who want stable, inflation-linked distributions and exposure to India's infrastructure growth story, while accepting that liquidity and regulatory frameworks are still maturing relative to REITs and equity funds.

All return data on this page represents indicative historical CAGR ranges compiled from publicly available sources - AMFI, NSE India, BSE India, Value Research, NSE Indices factsheets, Axis MF, Motilal Oswal, Crisil, and MOSPI/NSO CPI releases. Returns shown are category averages across multiple funds and are not a specific fund recommendation. Returns are pre-tax unless stated. Mutual fund investments are subject to market risks. Past performance is not indicative of future results. Boundless Consulting Pvt Ltd is not a SEBI Registered Investment Adviser. Data is compiled for educational purposes only and does not constitute investment advice. Consult a SEBI-registered investment adviser before making investment decisions. AMFI MFD registration in progress.