Traditional plain vanilla fixed deposit schemes have outperformed most asset classes this year as per the Business Standard report. And of these a one year FD scheme with SBI has been the top earner for investors in 2018 in comparison to other investment options including actively managed debt funds, equity or real estate. However, gold managed to deliver marginally higher returns but that too was at par with returns offered by some of the private and public bank FD schemes.
As per the data of the India Bullion and Jewellers Association as of December 21 gold delivered return of 6.8% in 2018 1-year FD scheme return by SBI during 2018 offered return of 6.25%.
Equity returns for the Sensex as per the data till December 24 came in at 4.15% while in case of the Nifty stood within 1.26%. Equity mutual funds have been the worst hit and gave returns well below the leading indices. As per the data of Value Research, for large-cap funds, one-year returns came in at slightly below zero, while small-cap and mid-cap funds also lost approximately 20% and 12%, respectively.
On the equities, experts point out that with assembly elections due next year there will be fair amount of volatility. And the year 2019 for the equity asset class will primarily be triggered by improving fundamentals and foreign flow situation due to global tightening.
Most of the debt funds due to their exposure to IL&FS suffered losses in 2018 and the outlook remains grim for the next year.
The situation was not much different in the realty sector as well. "Real estate prices remained unchanged during the current calendar except maybe in some micro market due to local factors. Investors in residential real estate earned 1.5 to three per cent rental yield on gross basis, while yields vary from four to seven per cent in commercial real estate, depending on location," Pooja Verma, assistant vice-president, Propequity was quoted as saying in the report.
Given the uncertain landscape and economic headwinds globally, gold may be a relatively safe bet with positive returns that are expected to be not very sharp but will come in at a higher level in comparison to current returns.