Sensex at 53000 or at 80000 or much much higher!
Just see for the first time ever amazing data about Indian Equity Markets.
1. BSE completed 40 years.
2. There were around 10,000 trading days in last 40 years.
3. Observations on regular basis and positive and negative returns occurrences.
Frequency Positive Negative
Daily 53% time 47% time
Weekly 56% time 44% time
Monthly 61% time 39% time
Quarterly 64% time 36% time
Yearly 72% time 28% time
3 years 89% time 11% time
5 years 96% time 4% time
10 years 100% time
4. Bse Sensex delivered 15.5% CAGR returns over last 40 years.
5. Decadal returns dispersion
Period CAGR
1980-1990 21.6%
1990-2000 14.3%
2000-2010 17.8%
2010-2020 8.8%
6. BSE Sensex returns 15.5%. Add 1.4% average dividend yield of 1.4% of last 40 years. At 16.9% compounding the value of BSE is actually around 80,000 level.
7. Longest period without returns was from 1994 till 2003. 9 years in total.
8. Since 2002 in last 18 years NO single 7 years rolling returns were without returns. This means since 2002 if you ever invested and kept money for minimum period of 7 years then you would have never lost money.
9. But what is most surprising and rewarding has been the performance of actively managed equity funds. Here are the data:
Category 20 years 25 years
CAGR CAGR
Hybrid 15.17% 15.96%
Hybrid – ex* 16.37% 16.74%
Diversified 18.11% 16.25%
Diversified-ex* 19.89% 18.10%
ELSS 18.45% 18.20%
ELSS-ex* 19.66% 21.47%
All Funds 17.52% 16.41%
All Funds-ex* 18.73% 18%
* excluding LIC/JM/Taurus/Quant MF schemes. This mean schemes of HDFC/ Nippon (earlier Reliance)/ Birla/ ICICI Pru/ SBI/ Principal/ Canara Rebecco/ Franklin etc.)
10. BSE Sensex was at 3800 in June 1996 (25 years back). In last 25 years average-ex* MF delivered 18% CAGR. Had BSE Sensex delivered as much as average MF schemes then the value of BSE Sensex should have been:
At 16.4% CAGR, BSE Sensex should be around 1,70,000 levels
At 18% CAGR, BSE Sensex should be around 2,38,000 levels.