Asset allocation calculator: see how mixing assets changes risk and return
Set a mix across Indian equity, global equity, bonds, FDs, gold and real estate. See its illustrative return, how risky it is, and how much diversification reduces that risk.
Asset allocator
Set a mix across asset classes to see its illustrative return and how its risk compares with each asset class.
Asset classReturn p.a.RiskAllocation
Indian equity%%50%
Global equity%%10%
Bonds%%15%
Fixed deposits%%10%
Gold/Silver%%10%
Real estate%%5%
Total allocation100%
Illustrative return10.8%per year
Portfolio risk9.8%vs 13.4% simple average
After 10 years₹27.89 Lat the illustrative return
Risk vs return Bubble size = your allocation
How portfolio risk is worked out: each asset class’s risk is weighted by your allocation and combined with how the asset classes have moved together over about 20 years (correlations, shown below). Because they don’t all rise and fall at the same time, the portfolio’s risk (9.8%) is lower than the simple weighted average of their risks (13.4%). That gap is the benefit of diversification. You can change any return or risk figure in the table; return assumptions stay within the 2–13% range AMFI allows for illustrations.
How these asset classes move together (correlations used)
Indian eq.
Global eq.
Bonds
FDs
Gold
Real est.
Indian equity
1
0.40
0.08
-0.09
-0.11
-0.06
Global equity
0.40
1
0.15
0.00
0.14
0.00
Bonds
0.08
0.15
1
0.27
0.02
-0.07
Fixed deposits
-0.09
0.00
0.27
1
-0.03
-0.07
Gold/Silver
-0.11
0.14
0.02
-0.03
1
0.03
Real estate
-0.06
0.00
-0.07
-0.07
0.03
1
Correlation of monthly returns, from about 20 years of data (2006–2026) where available: Nifty 50, domestic gold, a 10-year G-Sec fund and a liquid fund (for FDs), from AMFI fund NAVs via Integrato; S&P 500 in rupees (shorter history, cross-checked with longer-run studies); a real estate index from 1 Finance via India Macro Indicators. Negative numbers (in green) mean the two tend to move in opposite directions, which lowers portfolio risk. These figures are fixed.
Returns and risks are your own inputs. Correlations come from past data and change over time; they are not a forecast. Actual returns vary and can be negative.
Worked example
Mix
Return
Risk
In 10 yrs
80% Indian equity, 20% bonds
12.0%
14.5%
₹31.1 L
60% Indian equity, 20% bonds, 20% international equity
11.4%
12.5%
₹29.4 L
60% Indian equity, 20% bonds, 10% gold, 10% international equity
11.3%
11.6%
₹29.2 L
60% Indian equity, 20% bonds, 20% gold
11.2%
11.0%
₹28.9 L
What the other 20% does
Keeping 60% in Indian equity and 20% in bonds, what you do with the other 20% matters. International equity keeps a little more return; gold cuts risk the most (14.5% → 11.0%), because it has tended to move slightly opposite to Indian equity; a 10/10 split sits in between.
“In 10 yrs” is the illustrative value of ₹10 lakh invested once. Using the calculator’s default assumptions. Illustration only; not a recommendation of any asset mix or product.
How this calculator works
01
Return
The illustrative return is the weighted average of the returns you enter for each asset class. To keep illustrations realistic, return assumptions stay within the 2–13% a year range AMFI allows.
02
Risk
Risk is annual volatility: how much returns swing around their average. Each asset’s risk is weighted by your allocation and combined using about 20 years of data on how assets move together.
03
Diversification
Asset classes don’t all rise and fall together, and gold has tended to move slightly opposite to Indian equity. So your portfolio’s overall risk ends up lower than the simple average of its parts.
04
Limits
Correlations come from past data and change over time. In crises, many assets fall together, so diversification may help less than shown. Returns and risks are assumptions, not forecasts.
Important
Figures are illustrations based on your inputs, not projections or guarantees. Actual returns vary from year to year and can be negative.
Correlations are calculated from monthly returns over about 20 years where data is available; some pairs use shorter histories or are set to zero. They are fixed and shown in the table above.
This calculator is not a recommendation of any asset mix or product. Mutual fund investments are subject to market risks; read all scheme-related documents carefully.
