Smart Beta ETF Strategies | BEAT Nifty by 10% Every Year | Alpha, Momentum, Low Vol, Quality, Value
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There's a visible movement towards factor-based investing (also known as "Smart Beta") with AUM in these funds & ETFs having risen to over 22,000 crores in the last 3-4 years. This video aims to explore specific occasions to utilize smart beta indices for improved returns, diversification & risk management as we focus on 5 primary factors
1. Alpha - This smart beta strategy looks to capture stocks with a high Jensen's measure. We'll examine the Nifty Alpha 50, the Nifty 200 Alpha 30 and the Nifty Alpha Low Volatility 30 Index
2. Low volatility - We understand the Nifty 100 Low Volatility index that not only offers lower volatility as compared to the Nifty 100, but it also delivers higher returns
3. Value - This factor is based on the premise that companies with lower valuations generate higher returns. It uses metrics like the P/E ratio, P/B ratio, price-to-sales, dividend yield etc. as we observe the Nifty 50 Value 20 index's performance over the years
4. Momentum - It's a factor where recent winners continue to perform well and vice-versa. We'll work with the Nifty 200 Momentum 30, the Nifty Midsmall 400 Momentum Quality 100 and the Nifty Smallcap 250 Momentum Quality 100 index here
5. Quality - An investigation of the Nifty 200 Quality 30 index is done here to understand performance and this factor's ability to provide downside protection
Smart beta indices consistently outperform market-cap indices and I feel investing in smart beta ETFs and funds is a prudent way to create wealth. This video shall help you make informed investment decisions
👉 Additional Readings/Resources:
▹ Index methodology document: https://www.niftyindices.com/Methodol...
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👉 Video Chapters:
00:00 The Rise of Smart Beta ETFs & Index Funds
01:08 What is Smart Beta?
03:07 1. Alpha Factor
07:38 2. Low Volatility Factor
09:15 3. Value Factor
12:25 4. Momentum Factor
14:35 5. Quality Factor
15:55 Shankar Nath's Viewpoint
#smartbeta #factorinvesting #indexfunds #etfs #momentuminvesting #valueinvesting #lowvolatility
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