1. NIFTY 50 Value 20 (or NV20)
2. S&P BSE Enhanced Value
There are 5 schemes based on NV20. 3 of them were launched over 6 years ago.
S&P BSE Enhanced Value has one fund by @MotilalOswalAMC, launched a few days back.
Factor funds based on value strategy have outperformed NIFTY 50 significantly.
Here’s a 5-year return comparison of one such index:
Nifty 50 👉 15.7%
NIFTY 50 Value 20 👉 20.2%
The returns are too attractive to ignore value-based factor funds.
Should you invest in them? A 🧵
1. NIFTY 50 Value 20 (or NV20)
2. S&P BSE Enhanced Value
There are 5 schemes based on NV20. 3 of them were launched over 6 years ago.
S&P BSE Enhanced Value has one fund by @MotilalOswalAMC, launched a few days back.
It comprise 20 ‘value’ stocks from the NIFTY 50 (large cap stocks)
To pick these value stocks, metrics like ROCE, PE, PB and Dividend Yield are used.
So far, the factor index has done well (see table) 👇
But what about fund managers doing active stock picking?
We compared NV20 with actively managed schemes in the value fund category.
And what did we find?
In the last 5 and 7 years, no active fund could beat the NV20 index.
First, let’s look at the NV20 index.
Four fund houses offer NV20 ETFs. These include @NipponIndiaMF, @KotakMF, @ICICIPruMF, @hdfcmf.
Only @NipponIndiaMF offers an index fund option at present.
It picks 30 value stocks from large and mid-cap space.
And selects stocks based on P/B, P/E and sales-to-price ratios.
Currently, only @MotilalOswalAMC offers an ETF and an index fund based on this index (launched a few days back).
But it’s not guaranteed that it will perform consistently.
In fact, past data show that strategies like Value, Momentum, and Quality perform in different market conditions
See table.👇
Different factors or strategies have emerged as top-performing in different years.
For example, you can complement value with momentum.
