Building Wealth with 5-Factor Investing Strategies

Value

Undervalued stocks in relation to their fundamentals, such as a low price-to-book or price-to-earnings ratio. Some of the Value Mutual Funds in India are Aditya Birla Sun Life Pure Value Fund and Nippon India Value Fund.

Size

Smaller companies’ stocks have traditionally returned more than those of larger companies. Due to their varying investing mandates, different funds tend to concentrate on particular firm sizes: Lage Cap, Mid Cap, Small Cap and Multi Cap.

Momentum

In the short to medium term, stocks that have performed well recently typically continue to do so.  Investors can invest in momentum mutual funds such as ICICI Prudential Nifty 200 Momentum 30 Index Fund, Franklin India Prima Fund.

Dividend Yield 

Qualitative firms have low debt levels, steady earnings, and solid fundamentals. There are mutual funds that hope to give investors consistent returns in the form of dividends and with the possibility of long-term capital growth. Examples- HDFC Equity Dividend Fund, ICICI Prudential Dividend Yield Equity Fund

Low Volatility

Stocks that fluctuate less in value than the market as a whole. Mutual funds that seek to control the amount of risk or volatility in their portfolios are referred to as volatility-targeting funds, managed volatility funds, or volatility mutual funds. Examples- UTI Nifty Low Volatility Index Fund, Kotak Nifty 50 Low Volatility 30 ETF