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 🧵

Currently, you can invest in 2 value-based factor indices.

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.
As NV20 has a longer history of funds, let’s look at it in detail.

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) 👇
NV20 has outperformed the NIFTY 50 index.

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.
Options to invest

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.
The other option: BSE Enhanced Value index.

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).
The performance of NV20 makes a strong case.

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.👇
Even calendar year returns show a similar trend.

Different factors or strategies have emerged as top-performing in different years.
As the performance of factors or strategies varies based on market conditions, keeping a combination of factors could help optimise returns.

For example, you can complement value with momentum.
Factor funds are at a nascent stage.

Until 2020, there were only eight of them.

NV20-based schemes were among the first factor funds launched by fund houses.

Therefore, you won’t find a long-term track record for these funds.

✅Understand the risks before you invest.
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Rig Ved 1.36.7

To do a Namaskaar or bow before someone means that you are humble or without pride and ego. This means that we politely bow before you since you are better than me. Pranipaat(प्राणीपात) also means the same that we respect you without any vanity.

1/9


Surrendering False pride is Namaskaar. Even in devotion or bhakti we say the same thing. We want to convey to Ishwar that we have nothing to offer but we leave all our pride and offer you ourselves without any pride in our body. You destroy all our evil karma.

2/9

We bow before you so that you assimilate us and make us that capable. Destruction of our evils and surrender is Namaskaar. Therefore we pray same thing before and after any big rituals.

3/9

तं घे॑मि॒त्था न॑म॒स्विन॒ उप॑ स्व॒राज॑मासते ।
होत्रा॑भिर॒ग्निं मनु॑षः॒ समिं॑धते तिति॒र्वांसो॒ अति॒ स्रिधः॑॥

Translation :

नमस्विनः - To bow.

स्वराजम् - Self illuminating.

तम् - His.

घ ईम् - Yours.

इत्था - This way.

उप - Upaasana.

आसते - To do.

स्त्रिधः - For enemies.

4/9

अति तितिर्वांसः - To defeat fast.

मनुषः - Yajman.

होत्राभिः - In seven numbers.

अग्निम् - Agnidev.

समिन्धते - Illuminated on all sides.

Explanation : Yajmans bow(do Namaskaar) before self illuminating Agnidev by making the offerings of Havi.

5/9
**Thread on Bravery of Sikhs**
(I am forced to do this due to continuous hounding of Sikh Extremists since yesterday)

Rani Jindan Kaur, wife of Maharaja Ranjit Singh had illegitimate relations with Lal Singh (PM of Ranjit Singh). Along with Lal Singh, she attacked Jammu, burnt - https://t.co/EfjAq59AyI


Hindu villages of Jasrota, caused rebellion in Jammu, attacked Kishtwar.

Ancestors of Raja Ranjit Singh, The Sansi Tribe used to give daughters as concubines to Jahangir.


The Ludhiana Political Agency (Later NW Fronties Prov) was formed by less than 4000 British soldiers who advanced from Delhi and reached Ludhiana, receiving submissions of all sikh chiefs along the way. The submission of the troops of Raja of Lahore (Ranjit Singh) at Ambala.

Dabistan a contemporary book on Sikh History tells us that Guru Hargobind broke Naina devi Idol Same source describes Guru Hargobind serving a eunuch
YarKhan. (ref was proudly shared by a sikh on twitter)
Gobind Singh followed Bahadur Shah to Deccan to fight for him.


In Zafarnama, Guru Gobind Singh states that the reason he was in conflict with the Hill Rajas was that while they were worshiping idols, while he was an idol-breaker.

And idiot Hindus place him along Maharana, Prithviraj and Shivaji as saviours of Dharma.