Gold proves crucial in portfolio performance ranking
In this TrendMap, we have considered the weighted annual returns for comparison. The equal weighted portfolio of equity, debt, and gold generated the highest returns in 2025 year-to-date. Moreover, such a portfolio delivered double-digit returns in six of the past 11 years. In contrast, the returns generated by the portfolio with a strong debt component has seen high volatility since 2020.After topping the charts in 2023 and 2024, the portfolio with a strong equity component skidded down in 2025 year-to-date amid high turbulence due to global macroeconomic uncertainties and valuation concerns. Gold has emerged as a crucial asset. Portfolios with zero gold exposure remained in the lowest two ranks in six out of the last 11 years.
Looking at the risk-reward ratio, of the seven defined portfolios based on the average returns and standard deviation over the last 11 years, the portfolio with the higher debt component (debt 60%) has the most optimal risk-to-reward ratio, followed by the equal weighted portfolio.
Comparatively, the portfolio with the highest equity component has the most sub-optimal risk-to-reward ratio.
Source: ACE MF. *2025 data is YTD based on 30 May 2025 closing values. Other years’ returns are calculated between the first and the last trading day closing values. WAR is the weighted average return (or portfolio
return) of the given investment allocation. Benchmarks used: Equity: Nifty 500 Index, Debt: Crisil Composite Bond Index, Gold: Nippon India ETF Gold BeES.
