Adani Enterp. 1911.25↑72.25(3.93%)
Adani Ports 679.75↑10.10(1.51%)
Apollo Hospitals 4553.20↑37.75(0.84%)
Asian Paints 2982.85↑53.15(1.81%)
Axis Bank 865.95↑6.10(0.71%)
B P C L 368.35↑7.55(2.09%)
Bajaj Auto 4457.70↑9.85(0.22%)
Bajaj Finance 6390.25↑210.00(3.40%)
Bajaj Finserv 1374.45↑27.45(2.04%)
Bharti Airtel 789.10↑9.80(1.26%)
Britannia Inds. 4587.05↑59.95(1.32%)
Cipla 933.50↑12.85(1.40%)
Coal India 237.45↑0.55(0.23%)
Divi's Lab. 3282.55↑13.80(0.42%)
Dr Reddy's Labs 4968.00↑15.75(0.32%)
Eicher Motors 3339.30↓-9.05(-0.27%)
Grasim Inds 1759.85↑23.95(1.38%)
H D F C 2862.05↑74.30(2.67%)
HCL Technologies 1066.80↑7.85(0.74%)
HDFC Bank 1727.80↑34.65(2.05%)
HDFC Life Insur. 546.50↑7.80(1.45%)
Hero Motocorp 2514.50↑11.85(0.47%)
Hind. Unilever 2506.75↑20.75(0.83%)
Hindalco Inds. 445.50↑3.20(0.72%)
ICICI Bank 921.70↓-1.15(-0.12%)
IndusInd Bank 1134.60↓-11.55(-1.01%)
Infosys 1273.55↑4.40(0.35%)
ITC 424.60↓-2.55(-0.60%)
JSW Steel 738.70↑6.25(0.85%)
Kotak Mah. Bank 1947.60↑16.65(0.86%)
Larsen & Toubro 2356.90↑0.60(0.03%)
M & M 1231.70↓-3.75(-0.30%)
Maruti Suzuki 8800.60↑3.30(0.04%)
Nestle India 21693.75↓-181.95(-0.83%)
NTPC 176.35↓0.00(0.00%)
O N G C 161.00↓-0.15(-0.09%)
Power Grid Corpn 238.85↓-0.85(-0.35%)
Reliance Industr 2448.00↑27.90(1.15%)
SBI Life Insuran 1167.45↑30.55(2.69%)
St Bk of India 580.00↑9.50(1.67%)
Sun Pharma.Inds. 974.00↑10.40(1.08%)
Tata Consumer 775.50↓-5.90(-0.76%)
Tata Motors 480.80↓-2.90(-0.60%)
Tata Steel 111.05↑1.35(1.23%)
TCS 3220.70↑40.80(1.28%)
Tech Mahindra 1045.45↑5.85(0.56%)
Titan Company 2670.40↑16.35(0.62%)
UltraTech Cem. 7502.25↓-4.95(-0.07%)
UPL 731.50↓-8.30(-1.12%)
Wipro 383.70↓-1.40(-0.36%)

Seeking alpha? Go for factor-based fund, limit exposure to 15-20%

While single-factor funds may underperformance at times, a multi-factor one could offer smoother experience

Premium

Make a limited allocation to these funds initially. “Limit exposure to factor-based funds to 10-15 per cent of your portfolio

4 min read Last Updated : May 04 2023 | 6:34 PM IST

Listen to This Article

Many mutual fund houses have launched factor-based funds, also known as smart-beta funds, over the past couple of years. The recent new fund offer of UTI Nifty 500 Momentum 30 Index Fund belongs to this category. Various factors based on which funds are available include value, alpha, quality, growth, momentum, and volatility. While many of these funds are based on a single factor, others combine two or more factors.

“Factor investing involves looking at the underlying persistent drivers of returns. Each factor tends to perform in a particular market environment. Investing in a factor-based fund can be beneficial provided you have chosen the right factor,” says Ravi Kumar TV, founder, Gaining Ground Investment Services.

Single-factor funds perform in phases