- Equity Portfolio Manager
Singapore, Individual
Change
The views expressed are those of the authors at the time of writing. Other teams may hold different views and make different investment decisions. The value of your investment may become worth more or less than at the time of original investment. While any third-party data used is considered reliable, its accuracy is not guaranteed.
India has been one of the world’s top-performing stock markets over the past 20+ years, outpacing China and the broader emerging markets (EM) equity category, as well as developed markets (DMs) like the US and global equities overall (Figure 1). However, India has also been one of the world’s more volatile equity markets during that time. While its risk-adjusted return has been similar to that of many DMs, India equity has achieved that result by generating higher absolute returns with correspondingly higher realized volatility (as measured by standard deviation).
Figure 1
Encouragingly, this pronounced risk/return tradeoff has changed for the better in more recent years. Indeed, the historically elevated volatility of India’s stock market has come down significantly since the 2008 global financial crisis (GFC) — much more so, in fact, than in many other world equity markets over the same period (Figure 2). We attribute this rapid decline in realized volatility largely to a shift toward more domestically driven asset flows (Figure 3): Today, unlike the pre-GFC era, Indian investors themselves are the primary owners of India equity. As a result, the market, now less susceptible to foreign investor sentiment, has become more stable and meaningfully less volatile.
Figure 2
Figure 3
Bottom line for investors in India equity
The marked improvement in the risk/return tradeoff associated with India equity is a welcome development for return-seeking, risk-conscious investors who have (or are considering) an allocation to this key emerging market.
Experts
- Investment Director
Related insights
Showing
of
Insights Posts
What does Trump's US election win mean for bond investors?
Continue reading
4
min
Article
2025-11-30
It’s different this time: Trump faces challenging geopolitical dynamics
Continue reading
3
min
Article
2025-11-30
Trump win likely to accelerate macro trends already in motion
Continue reading
5
min
Article
2025-11-30
Chart in Focus: What does the rate cut mean for equities and bonds?
Continue reading
3
min
Article
2025-09-30
URL References
Related Insights
Read next
Past results are not necessarily indicative of future results and an investment can lose value. Funds returns are shown net of fees. Source: Wellington Management
© 2024 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. The Overall Morningstar Rating for a fund is derived from a weighted average of the three, five, and ten year (if applicable) ratings, based on risk-adjusted return. Past performance is no guarantee of future results.
The content within this page is issued by Wellington Management Singapore Pte Ltd (UEN: 201415544E) (WMS). This advertisement or publication has not been reviewed by the Monetary Authority of Singapore. Information contained on this website is provided for information purposes and does not constitute financial advice or recommendation in any security including but not limited to, share in the funds and is prepared without regard to the specific objectives, financial situation or needs of any particular person.
Investment in the funds described on this website carries a substantial degree of risk and places an investor’s capital at risk. The price and value of investments is not guaranteed. The value of the shares of the funds and the income accruing to them, if any, and may fall or rise. An investor may not get back the original amount invested and an investor may lose all of their investment. Investment in the funds described on this website is not suitable for all investors. Investors should read the prospectus and the Product Highlights Sheet of the respective fund and seek financial advice before deciding whether to purchase shares in any fund. Past performance or any economic trends or forecast, are not necessarily indicative of future performance. Some of the funds described on this website may use or invest in financial derivative instruments for portfolio management and hedging purposes. Investments in the funds are subject to investment risks, including the possible loss of the principal amount invested. None of the funds listed on this website guarantees distributions and distributions may fluctuate and may be paid out of capital. Past distributions are not necessarily indicative of future trends, which may be lower. Please note that payment of distributions out of capital effectively amounts to a return or withdrawal of the principal amount invested or of net capital gains attributable to that principal amount. Actual distribution of income, net capital gains and/or capital will be at the manager’s absolute discretion. Payments on dividends may result in a reduction of NAV per share of the funds. The preceding paragraph is only applicable if the fund intends to pay dividends/ distributions. Performance with preliminary charge (sales charge) is calculated on a NAV to NAV basis, net of 5% preliminary charge (initial sales charge). Unless stated otherwise data is as at previous month end.
Subscriptions may only be made on the basis of the latest prospectus and Product Highlights Sheet, and they can be obtained from WMS or fund distributors upon request.
This material may not be reproduced or distributed, in whole or in part, without the express written consent of Wellington Management.
Chart in Focus: Can this equity bull market last?
Continue readingMultiple authors