NIFTY 50 vs S&P 500: 25 years of real numbers
25 May 2026 · 11 min read · India / US
The setup
One question: ₹1 lakh invested on 1 January 2001 in either NIFTY 50 (Total Return) or S&P 500 (Total Return, INR-converted). Where would you be in May 2026?
- NIFTY 50 TRI includes reinvested dividends, captures post-liberalisation Indian growth.
- S&P 500 TR in USD, with INR/USD depreciating ~2.4% per year on average.
- Period: Jan 2001 → May 2026 (25.4 years). Spans dot-com bust, 2008 GFC, COVID, 2022 rate shock.
The headline numbers
| Metric | NIFTY 50 TRI (INR) | S&P 500 TR (USD) | S&P 500 TR (INR-adj) |
|---|---|---|---|
| Starting value | ₹1,00,000 | $2,140 | ₹1,00,000 |
| Ending value | ~₹29.8 L | ~$14,300 | ~₹11.9 L |
| Total return | ~2,880% | ~568% | ~1,090% |
| CAGR | 14.21% | 7.92% | 10.41% |
| Max drawdown | –59% (Oct 2008) | –56% (Mar 2009) | –47% |
| Recovery time from max DD | ~22 months | ~49 months | ~32 months |
| Years with negative return | 5 / 25 | 6 / 25 | 6 / 25 |
| Annualised volatility | 23.8% | 15.5% | 18.2% |
| Sharpe ratio (rf=6%) | 0.41 | 0.34 | 0.32 |
Currency is half the story
INR/USD moved from ~46.5 in Jan 2001 to ~84.0 in May 2026 — a 1.81x depreciation, roughly 2.4% per year. That alone added 2.4 percentage points to the S&P's INR return without the index doing any work.
Put differently: half the case for owning US assets from India is just not being 100% rupee-exposed. The other half is the index itself.
Why NIFTY wins on raw CAGR
India started from a low base. GDP per capita: $460 in 2001 → $2,800 in 2026. The S&P had no such tailwind. Three drivers behind NIFTY's lead:
- Earnings growth: NIFTY EPS compounded ~12% vs S&P at ~7%.
- Re-rating: NIFTY's trailing P/E went from ~14 to ~22.
- Dividends: TRI includes reinvested payouts; both benefit, but NIFTY's payout ratio rose materially.
Why S&P wins on risk
- Sector diversification: NIFTY is ~35% financials by weight. S&P spreads across tech, healthcare, financials, consumer, energy.
- Free-float adjustments: NIFTY has concentrated promoter holdings, thinner free floats.
- Recovery mechanics: deeper US debt markets and the Fed put cushioned 2008 and 2020.
The blended portfolio
A static 70% NIFTY / 30% S&P (INR-adjusted), rebalanced annually: 13.8% CAGR, 20.1% volatility, –52% max drawdown. Sharpe jumps to 0.49.
Indian and US equities have a long-run correlation of ~0.35. Low enough that combining them reduces portfolio variance without giving up much expected return.
What this doesn't tell you
- Taxes: NIFTY ETFs in India → 12.5% LTCG above ₹1.25 lakh. S&P 500 ETFs via India (UTI/Motilal Oswal Nasdaq) attract debt-fund slabs after Apr 2023. Post-tax gap narrows.
- LRS limits: $2,50,000 per year per individual for direct US investing.
- Path dependence: SIP investors starting in 2003–2007 did dramatically worse than those starting in 2001 or 2009.
- Survivor bias: Sectoral indices that did badly (NIFTY Realty pre-2008) are not in this picture.
So what should you do?
Nothing here is a recommendation. Things to consider, not act on:
- If you own zero international equity, the math suggests adding a small allocation reduces overall risk.
- 100% NIFTY implicitly bets "INR will buy as many dollars as it does today." That's a real currency view.
- The 25-year window includes structurally unrepeatable moves (China entry, smartphone boom, AI capex).
^nse and on ^spx. Compare drawdown columns side by side. Same strategy, very different behaviour.Sources
- NIFTY 50 TRI: NSE India historical data, Bloomberg.
- S&P 500 TR: S&P Dow Jones Indices, Yahoo Finance.
- INR/USD: RBI reference rates, FRED.