Bandhan MF has launched two smart beta factor based funds: Nifty 500 Momentum 50 and Nifty 500 Value 50 index funds.
Sirshendu strongly recommends inclusion of smart beta funds in investors’ equity portfolios – they offer disciplined, transparent, rules-based strategies that have a proven track record of outperforming markets over the medium and long terms.
Nifty 500 Momentum 50 has outperformed Nifty 500 by upto50% over 5 and 10 year periods, albeit with greater volatility.
Risk adjusted return is significantly higher than Nifty500 – indicating that the incremental return more than adequately justifies incremental volatility.
Given its impressive track record of performance on point-to-point and rolling returns basis and the fact that momentum as a strategy is style and size agnostic, Sirshendu believes this smart beta fund deserves to be a core holding in every equity funds portfolio.
Value and quality factors tend to take turns in terms of outperforming markets and have the potential to generate significant alpha during their up-phases in market cycles.
They lend themselves ideally to satellite positions inactively managed investor portfolios.