New Delhi, Aug. 30 -- Investors are often on the lookout for the best-performing asset class -- with their choices spread across fixed income instruments, like Public Provident Fund (PPF) and bank fixed deposits (FDs), precious metals such as gold and silver and the equity market.

The long-term historical trend shows that equity tends to outperform other asset classes over 15, 20 and 30 years. But should investors then look to buy the benchmark index or the broader markets?

Well, the answer lies in diversification. Since a broader market index has a wider selection of companies, it has managed to beat benchmark returns.

Data shows that between 1995 to 2005 (till June), Nifty 500 has delivered a massive 15.2% CAGR earnings vs 14.1% rise...