Return Concentration Reality
                     Return Concentration 
Reality
The 4% Rule of Wealth 
Hendrik Bessembinder in a paper C"Dor Setocaks Otuitopernform Treasury Bills?" (Journal of 
Financial Economics, 2018) found that across almost 100 years, ~4% of listed stocks 
accounted for all the net wealth created by the U.S. stock market.
Pre-GFC vs. Post-2009: A Shift in 
Concentration
Before the 
TGhFoCugh concentration has always existed in equity In the US, 50–70 stocks explained ~80% 
markets, returns in the 20 years pre-GFC were of returns pre-GFC.
meaningfully less concentrated than returns since 
2009.
India's Concentration 
ISn Intdoia, rthye contrast is even sharper.
Pre-2008 Post-2009
Leadership rotated between PSUs, cyclicals and 12–15 stocks explain ~80% of returns for the NIFTY 
exporters. 50.
Widen the lens to the NIFTY 500 and still