Testing a long-term Nifty + Gold allocation framework against buy-and-hold (2015–2026)

I’ve been testing a rules-based allocation framework combining:

* Nifty 50 exposure
* Gold as a defensive allocation
* Trend and realized volatility filters
* Monthly rebalancing

The objective was not maximizing raw returns, but improving long-term risk-adjusted performance and reducing drawdowns relative to long-only equity exposure.

Backtest period:
Jan 2015 – Mar 2026

Assumptions:

* no leverage
* no shorting
* transaction costs included

Results vs Nifty 50 buy & hold:

* CAGR: 16.57% vs 9.09%
* Max Drawdown: -18.89% vs -38.44%
* Sharpe Ratio: 0.78 vs 0.16

The main tradeoff is that the framework tends to lag during sharp V-shaped recoveries because exposure reduction follows volatility expansion.

Interested in discussion around:

* whether gold is an effective long-term defensive allocation for Indian investors
* whether regime-based allocation genuinely improves long-term portfolios
* alternative defensive assets or diversification methods
* balancing drawdown reduction vs upside participation