NSE Indices Calendar Year Returns: 2006 to 2025 07Jan2026
(The views expressed here are for information purposes only and should not be construed as a recommendation or investment advice. While the author is a CFA Charterholder with nearly 25 years of experience in financial markets, this content is intended to share general insights and does not constitute financial guidance. Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.)
This is an update of an earlier blog. The data presented here are as of 31Dec2025.
This blog explores:
Calendar year returns of Nifty Broad Indices,
Trailing returns of Nifty Broad Indices,
Calendar year returns of Nifty Sector Indices, and
Trailing returns of Nifty Sector Indices, and
Calendar year drawdown of Select Nifty Indices.
As you may be knowing, the structure of Nifty Broad Market Indices is given below for your ready reference:
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Related articles:
Stocks and Peer Comparison by Industry 16Feb2024
BSE 500 vs Nifty 500: Same Market, Different Indices 02Jan2026
Nifty 50 Index Evolution Over a Decade From 2015 to 2025 29Jul2025
NSE Emerging Indices Fundamentals Comparison 30Jun2025
NSE Indices Fundamentals Comparison 31Dec2024
NSE Indices Calendar Year Returns 2006 to 2024 05May2024
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1. Calendar Year Returns of Nifty Broad Indices (2006–2025)
Long-term wealth comes from staying invested, not chasing size:
Chart 1 below shows calendar year returns (from 2006 to 2025) for Broad NSE Indices:
Nifty 50 TRI,
Nifty Next 50 TRI,
Nifty 500 TRI,
Nifty Midcap 150 TRI, and
Nifty Smallcap 250 TRI.
All the above five indices flow from Nifty 500 Index (see chart above).
All returns in Chart 1 below are total returns, including dividends.
Light green cells in Chart 1 show the best-performing index in that calendar year, while orange cells highlight the worst-performing index for the year among the NSE indices shown.
(Nifty Indices are sometimes known as NSE Indices)
The big takeaway from Chart 1 above is that no single category wins every year. Returns are cyclical in nature.
Mid- and small-cap stocks dominate in strong bull market years like 2007, 2014, 2016, 2021 and 2023; but they also suffer the worst damage in bad years such as 2008, 2011 and 2018.
Large-cap
stocks (Nifty 50) look “boring” in good years, but they protect capital
better in tough ones -- as seen in 2025, 2019 and 2018.
From the middle of 2024, returns have
moderated sharply compared to the post-Covid-19 surge, with 2025 being
subdued and small-caps even turning negative.
This reinforces a key lesson: diversification across market caps matters far more than trying to guess the next winning segment.
The same chart 1 above is presented below without any colour coding >
2. Trailing Returns of Nifty Broad Indices
Trailing returns as of end-2025: recent underperformance masks strong medium-term trends:
The trailing returns chart (Chart 3 below showing 3-month to 10-year returns) as of 31Dec2025 shows a clear pattern. Over 1 year, returns are muted and even negative for small-caps and micro-caps, reflecting the 2024–2025 cooling after a strong rally from Ma2023 to Sep2024.
However, when you extend the lens to 3, 5 and 10 years, mid-caps, small-caps and micro-caps clearly outperform Nifty 50.
For example, 5-year returns for mid- and small-cap segments remain well above large-caps, despite the recent slowdown.
This is important context for early 2026: short-term disappointment often coincides with better long-term entry points, provided fundamentals remain intact.
On a 3-, 5- and 10-year basis, Nifty 50 returns were the worst among the six indices compared here. But on a 1-year basis, its returns are the best.
On the contrary, Nifty Microcap 250 and Nifty Smallcap 250 provided the best returns on a 3-, 5- and 10-year basis. But they delivered worst returns on a 1-year basis. This is the phenomenon of 'cycles of ups and downs.'
Chart: Nifty Broad Indices Trailing Returns:
Green shading of an index indicates relatively better trailing returns for that time period, while orange highlights comparatively weaker or negative returns among the indices.
3. Calendar Year Returns of Nifty Sector Indices
The chart below (Chart 6) shows the relative performance of Nifty sector indices over the years.
Explanation for column 8 (extreme right) in the chart:
This
column shows how important each sector is to the overall Indian stock
market, as represented by the Nifty 500. The higher the percentage, the
more influence that sector has on the market’s movement.
Even if
a smaller sector performs very well, it will not move the index much,
while a large sector with average performance can have more impact on
market returns.
Headlines may tout top-performing sectors, but sectors with larger index weights often drive overall returns.
In simple terms, this column answers the question: “Which sectors actually drive the market?”
Nifty 500 roughly represents the Indian stock market as a whole, covering over 85 per cent of India’s total market capitalisation.
This makes it a good proxy for “the market,” and the sector weights in this column show where most of the money in the Indian equity market is actually concentrated.
Three sectors, namely, financial services (including banks, insusurers, brokerage firms, NBFCs and AMCs), information technology (IT) and Oil & Gas have nearly 50 per cent share in Nifty 500 index.
Markets are driven index weights and stock weights, not headlines.
And in Nifty 500, eight sectors together make up nearly three-fourths of the index. This data point is crucial for understanding how concentrated the Indian stock market really is.
The takeaway is that “the market” is not evenly spread across all sectors--large-cap heavy sectors like financials, IT and energy often dominate returns and risk.
Chart 6: Nifty Sectoral Indices Calendar Year Returns 2018 to 2025:
Light green cells in Chart 6 show the best-performing index in a given year, while orange cells highlight the bottom performer.
Overview of the chart above (Chart 6):
Top performer in 2025 is Nifty Metal, whereas the bottom performer is Nifty Consumer Durables of the eight sectors analysed.
Significantly, metal sector's count of outperformance is three times in the past eight years (2018 to 2025).
Nifty Financial Services
Most stable large sector across cycles. Returns are mostly positive with limited drawdowns. Underperformed in 2020 compared to IT and Healthcare but recovered steadily.
Nifty IT
Highly volatile and macro-sensitive. Exceptional rally during 2020–2021 (digital demand, currency tailwinds), followed by a sharp correction in 2022 due to concerns around rising interest rates in the US and its impact on US tech sector.
Classic boom-bust behavior. It is a big appointment in the past three and five year periods.
Nifty Oil & Gas
Moderately cyclical with fewer extreme years. Strong during commodity upcycles (2021–2022), weak in 2018. The index is mainly driven by India's top stock, by market cap, Reliance Industries.
Nifty Auto
Strong cyclical recovery story. Severe pain in 2018–2019, followed by powerful rally in 2021 and especially 2023. Continues to perform well into 2025 and 2026, reflecting demand recovery and pricing power.
Nifty FMCG
Defensive but not immune to cycles. Stable, low-volatility returns, with underperformance in high-growth years (2021, 2023). This is a big appointment in the past three and five year periods.
4. Trailing Returns of Nifty Sectoral Indices
Chart 4: Nifty Sectoral Indices Trailing Returns:
Green cells of an index mark stronger-performing sectors over the given period, and orange/red cells indicate underperformance or negative returns relative to other sectors.
Sector performance: leadership has rotated sharply:
The sector trailing returns chart (Chart 4 above) explains why index returns look uneven. Financials dominate the Nifty 500 by weight and have delivered steady but not spectacular returns.
Information technology (IT) stands out as a laggard over one year, reflecting global tech slowdown and currency effects, while metals and autos have been strong performers over 1–3 years, riding the capex and manufacturing cycle.
FMCG and consumer durables show relatively muted returns. For investors, this underscores that index performance is ultimately driven by sector cycles, not just “the market” as a whole.
Note: While eight sectors account for 74 per cent of the Nifty 500 weight (as shown in Chart 4 above), the following sectors of Nifty 500 index that cannot be directly mapped to a specific sector indices of NSE are ignored.
For example, Capital goods sector weight in Nifty 500 index is 5.7 per cent as of 31Decn2-25, but there is no capital goods index in Nifty indices. Likewise, Telecommunication (3.6%), Consumer services (3.6%), Power (3%), Construction (2.9%) and Construction materials / cement (1.9%) and others cannot be neatly mapped to any Nifty sector index.
5. Calendar Year Drawdowns of Select Nifty Indices
Drawdowns tell the real risk story, especially for smallcaps:
Maximum drawdown is the largest peak-to-trough loss an asset experiences over a specific period, showing the worst-case decline an investor would have faced.
It helps measure capital risk and the potential pain during market downturns, rather than just focusing on average returns.
Chart: Nifty Select Indices Calendar Year Drawdowns 2026 to 2025:
Light green shows the least severe drawdown (best downside protection) in that year, while orange highlights the deepest drawdown (worst fall) among the indices.
Analysis of Chart 5 above reveals:
The drawdown chart (2006–2025) highlights something calendar returns often hide: how much pain investors had to endure along the way. In crises like 2008 and 2020, Nifty Smallcap 250 saw drawdowns of around 70% and 43% respectively, compared to ~60% and ~38% for Nifty 50.
Even in “normal” corrections such as 2011 or 2018, smallcaps and midcaps fell far deeper than largecaps. For most investors, the message is simple: higher long-term returns in midcaps and smallcaps come at the cost of much deeper and more frequent drawdowns.
If you panic-sell during these phases, the theoretical long-term outperformance never becomes real.
Understanding Drawdown Frequency in Indian Stocks Over 20 Years:
Over the past 20 calendar years, Nifty 50 showed the most resilience, experiencing its lowest drawdown 16 times, meaning large-cap investors avoided the worst of market corrections in most years.
Nifty Smallcap 250, by contrast, faced the highest drawdown 17 times, reflecting the higher volatility and vulnerability of small-cap stocks.
The Midcap index had 2 instances of being the worst, showing that midcaps sit between large and small caps in terms of risk.
This illustrates a consistent pattern: smaller, high-growth segments offer bigger gains but also suffer bigger losses, while large caps protect capital better over the long term.
It’s a simple way to show that drawdown frequency matters as much as depth for investors concerned about capital protection.
6. Limitations of Using Calendar Year Drawdowns
A good example of the limitation of calendar-year drawdowns is the period from 27Sep2024 to 04Mar2025, when Indian equities saw a steep fall -- during this sharp drawdown period, mid- and small-cap indices suffered nearly 20 per cent fall.
In fact, more than 60 per cent stocks in Nifty MidSmallcap 400 and Nifty Next 50 indices have suffered a maximum drawdown of 30 per cent or more (Check Tweet dated 07Mar2025 on Nifty Internals).
07Mar2025 Data on Nifty Internals >
Because this decline began late in 2024 and extended into early 2025, the pain is split across two calendar years and therefore does not appear as a “large” drawdown in either CY 2024 or CY 2025.
For an investor living through that period, however, the experience was very real and severe. This illustrates why CY drawdowns can understate true risk and why rolling or peak-to-trough drawdowns are essential for understanding capital protection.
7. Capital Protection: Why Avoiding Big Losses Matters More Than Chasing Returns
When analysing financial markets and assets with capital protection as the primary goal, returns matter far less than how much you can lose and how often. The key measures to focus on for downside protection are:
Drawdown and maximum drawdown (Section 5 above):
This is the single most important metric for capital protection. It shows the peak-to-trough loss an investor would have suffered. Assets with smaller and shorter drawdowns preserve capital and investor behaviour during stress periods.
Volatility (standard deviation of returns):
Volatility captures how widely returns fluctuate. Lower volatility assets tend to be easier to hold during market stress, even if long-term returns are modest. High volatility increases the risk of panic exits.
Downside deviation and downside risk:
Unlike standard volatility, downside deviation focuses only on negative returns. This is more relevant for capital protection because upside volatility does not hurt investors.
Recovery time (time to breakeven):
How long an asset takes to recover after a drawdown is crucial. Shorter recovery periods reduce both financial and psychological damage.
Correlation during stress period:
Assets that look diversified in normal times often move together during crises. For capital protection, check correlation specifically during market drawdowns, not just long-term averages.
Liquidity and market depth:
Highly liquid assets allow exit without steep price impact during stress. Illiquid assets can magnify losses when you need capital the most.
Valuation risk:
Assets bought at extreme valuations offer less downside protection. Measures like earnings yield, cash-flow yield or credit spreads provide early warning signals.
Income stability:
Assets with predictable cash flows (dividends, coupons, rent) help protect capital by reducing reliance on price appreciation alone.
Big picture takeaway:
For capital protection, drawdowns, downside risk and recovery matter more than headline returns. The best assets are not those that never fall, but those that fall less, recover faster and allow investors to stay invested through market stress.
Behavioural Biases:
Humans are emotionally wired to react to losses far more strongly than gains, so when an asset experiences a large drawdown, fear often triggers selling, even if the fundamentals remain intact.
Once they sell, investors miss the sharp rebounds that often follow volatile declines, especially in mid-caps, small-caps or cyclical sectors.
Over time, this behaviour can destroy long-term returns, because high-volatility assets might reward patience, but only if investors can withstand interim pain.
In short, capital protection isn’t just about choosing the right assets—it’s also about managing your own psychology and behaviour during inevitable market swings.
8. Summary and Investment Implications
What all five charts together say to an investor in early 2026?
Taken together, the analysis sends a consistent message. Markets move in cycles across years, market caps and sectors.
Large caps provide stability, while mid- and small-caps provide growth but with sharp interim pain; and sectors rotate leadership every few years.
The weaker recent returns and drawdowns in mid- and small-cap segments in late 2024 and 2025 are not abnormal; they are part of the same long-term pattern visible since 2006.
Mid- and small-cap stocks undergo sharp sell-offs and large drawdowns. Large-caps (Nifty 50) tend to deliver steadier returns with smaller drawdowns, acting as a stabiliser.
For the average investor, the most practical takeaway is timeless: diversify, rebalance and stay invested long enough for long-term trends, while ignoring short-term noise.
(the blog is not yet completed; please bear with me till I complete it, which can take another 2 to 3 hours)
(This
is just for educational purposes; and should not be construed as
investment recommendation. Readers should consult their own financial
advisers before considering any investments.)
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References and additional data:
NSE Index Dashboard 31Dec2025 PDF
Nifty Indice Return Profile - for trailing returns of all NSE Indices
Nifty Indices Historical index data
The sector index is just a subset and a representation, not the full driver.
Sector indices explain performance trends,
Nifty 500 sector weights explain market impact, and
Market concentration comes from capitalisation dominance, not stock counts.
| Nifty 500 Index | ||
| as on 31Dec2025 | ||
| Sector | Weight (%) | No of stocks in Index |
| Financial Services | 31.6 | 95 |
| Information Technology | 8.1 | 28 |
| Oil, Gas & Consumable Fuels | 8.0 | 19 |
| Automobile and Auto Components | 7.2 | 35 |
| Fast Moving Consumer Goods | 6.3 | 31 |
| Healthcare | 6.2 | 52 |
| Capital Goods | 5.7 | 64 |
| Metals & Mining | 3.9 | 17 |
| Telecommunication | 3.6 | 10 |
| Consumer Services | 3.6 | 26 |
| Power | 3.0 | 18 |
| Construction | 2.9 | 12 |
| Consumer Durables | 2.7 | 19 |
| Construction Materials * | 1.9 | 11 |
| Chemicals | 1.9 | 26 |
| Services | 1.8 | 14 |
| Realty | 1.1 | 11 |
| Textiles | 0.2 | 6 |
| Media, Entertainment & Publication | 0.1 | 4 |
| Diversified | 0.1 | 3 |
| 100.0 | 501 | |
| * all cement stocks |
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