Rupee down again. These assets turn that problem into profit
- Mani Metto
- Nov 24, 2025
- 3 min read
Indian investors face one steady challenge. The rupee keeps losing value against the dollar. In 2015, USD INR was ₹66, and today it is around ₹89. That means the rupee has weakened by 34% in ten years. Even a small 3% to 4% depreciation every year becomes a big loss over time. It quietly reduces the real returns on all rupee investments. This is why more investors are looking for assets that protect them from this continuous slide.
Why S&P 500 Feeder Funds Work Well
S&P 500 feeder funds benefit from two growth engines at once.
1. US market returns
2. Rupee depreciation
The Motilal Oswal S&P 500 Index Fund has delivered around 17% CAGR over the past 5 years. Out of this:
About 13% came from the S&P 500’s USD performance
About 3.9% came from rupee depreciation
Other options like the Mirae Asset S&P 500 Top 50 ETF have shown even stronger numbers, with returns of 26.62% in 1 year and 29.4% CAGR over 3 years.
US markets have delivered solid long-term returns:
10-year S&P 500: 229% total (around 12.5% CAGR)
5-year S&P 500: 109.2% total (around 15.9% CAGR)
3-year S&P 500: 76.66% total (around 21.2% CAGR)
When combined with 3.69% annual rupee depreciation from 2020 to 2025, the total INR return becomes even stronger.
Is Gold Still Useful
Gold works differently. It grows more slowly than US equities but protects the portfolio during crises.
Over the last 5 years, gold in India has delivered around 12% CAGR, made up of:
About 6% of the global gold price rise
About 4% from rupee depreciation
Recent gold prices in India:
2025: ₹94,630 per 10g
2024: ₹77,913 per 10g
2023: ₹65,330 per 10g
2022: ₹52,670 per 10g
Some Sovereign Gold Bonds (for example, SGB 2017–18 Series VIII) delivered 317% total return, which is around 19.7% CAGR, including the 2.5% interest.
Gold performs best during crises, sharp rupee drops, or when markets fall. Its correlation with equities is close to zero, which makes it a good safety asset.
Risks and Things to Keep in Mind
S&P 500 feeder funds have higher volatility. Standard deviation is around 19.29
Gold is about 30% to 40% less volatile than equities
Both the S&P 500 and gold are near high valuations
Taxation differs for S&P 500 funds: 12.5% LTCGSGB maturity: 0% tax Gold ETFs: 20% with indexation
Simple 5-Year Comparison
If you invested ₹1,00,000 five years ago:
S&P 500 Feeder Fund grows to ₹2,23,970 (17.5% CAGR)
Gold grows to ₹1,76,234 (12% CAGR)
Indian equity funds grow to ₹2,14,600 (16.5% CAGR)
Fixed deposits grow to ₹1,37,009 (6.5% CAGR)
The extra gain from the S&P 500 vs gold is ₹47,736, which is 47% higher total returns.
What Should an Investor Do
The rupee is still on a weakening path, now near ₹89 and likely heading toward ₹90 per dollar. Because of this, having some dollar-linked investments is becoming essential.
A mix of both may work best.
S&P 500 gives growth plus benefits from rupee depreciation. Gold gives stability and protects the portfolio during shocks.
Simple Takeaway
If your goal is long-term wealth creation and you can handle market swings, S&P 500 feeder funds are currently the strongest rupee hedge, delivering around 17% to 18% CAGR. Gold still matters as a safety layer, but it offers lower long-term returns, at around a 12% CAGR.
With the rupee weakening 34% over a decade, currency diversification is no longer optional. It is now a core part of smart investing.
Disclaimer: This content is for educational purposes only; please conduct your own research and consult with a qualified investment advisor before making any investment decisions.
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