Home / Business and Economy / FDs Beat Nifty on Risk-Adjusted Returns: Sharma Data
FDs Beat Nifty on Risk-Adjusted Returns: Sharma Data
16 May
Summary
- Nifty 50 TR Index yielded 9.38% post-tax CAGR over 12 years.
- Bank FDs offered lower 4.93% post-tax CAGR but higher safety.
- FDs showed a significantly superior risk-adjusted return ratio.
Veteran investor Shankar Sharma recently compared the performance of the Nifty 50 Total Return Index against bank fixed deposits over a 12-year period ending May 15, 2026. His analysis, shared on social media, revealed that the Nifty 50 TR Index achieved a post-tax CAGR of 9.38%.
In contrast, bank fixed deposits provided a post-tax CAGR of 4.93%. However, when adjusted for risk, fixed deposits significantly outperformed equities.
The analysis highlighted that the Nifty 50 TR Index, assuming 15% annualized volatility, had a tax- and risk-adjusted return ratio of 0.617. The Nifty in dollar terms showed a similar trend, with a ratio of 0.336.
Bank fixed deposits, with only 0.25% annualized volatility, achieved a remarkable tax- and risk-adjusted return ratio of 19.720, underscoring their stability. This comparison has sparked considerable discussion about investment choices.
