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Smart Beta funds are high on quality shares: Here are their top 10 stocks

The indices they follow are constructed based on a variety of fundamental, technical or other filters

December 02, 2021 / 10:31 AM IST
Smart beta mutual funds are straddling between active and passive investing. They are the passive funds attempting to beat the traditional market-capitalization-weighted index by investing in the same index stocks (either in all or a few stocks) in a different way. The indices they follow are called smart beta or strategy indices, which are designed to improve the performance and alter the risk level of traditional indices. These benchmarks are constructed based on a variety of fundamental, technical or other filters. NSE India has launched 28 such strategy-based indices. Indian mutual funds offer 18 such smart beta index funds/ETFs (including five equal weight funds and two FoFs). Here are the top 10 stocks of the seven smart beta indices that these schemes follow.
Smart beta mutual funds are straddling between active and passive investing. They are the passive funds attempting to beat the traditional market-capitalization-weighted index by investing in the same index stocks (either in all or a few stocks) in a different way. The indices they follow are called smart beta or strategy indices, which are designed to improve the performance and alter the risk level of traditional indices. These benchmarks are constructed based on a variety of fundamental, technical or other filters. NSE India has launched 28 such strategy-based indices. Indian mutual funds offer 18 such smart beta index funds/ETFs (including five equal weight funds and two FoFs). Here are the top 10 stocks of the seven smart beta indices that these schemes follow.
The NIFTY 100 Low Volatility 30 index tracks the performance of 30 stocks in NIFTY 100 with the lowest volatility in the last one year. Weights of securities in the index are assigned based on the volatility values. The security with the lowest volatility in the index is assigned the highest weight.
The NIFTY 100 Low Volatility 30 index tracks the performance of 30 stocks in NIFTY 100 with the lowest volatility in the last one year. Weights of securities in the index are assigned based on the volatility values. The security with the lowest volatility in the index is assigned the highest weight.
NIFTY 100 Quality 30 Index aims to cover companies which have durable business model resulting in sustained growth. This index consists of 30 companies which are selected based on low gearing, high return on equity and profit growth. Stocks are selected based on the quality score that is calculated on the basis of Return on equity (ROE), Debt equity ratio (D/E) and Average change in EPS.
NIFTY 100 Quality 30 Index aims to cover companies which have durable business model resulting in sustained growth. This index consists of 30 companies which are selected based on low gearing, high return on equity and profit growth. Stocks are selected based on the quality score that is calculated on the basis of Return on equity (ROE), Debt equity ratio (D/E) and Average change in EPS.
NIFTY 200 Quality 30 Index aims to cover companies that have durable business models, resulting in sustained growth. This index consists of 30 companies selected from the NIFTY 200 index, based on Return on Equity, Debt equity ratio and Variability in EPS in the previous five years.
NIFTY 200 Quality 30 Index aims to cover companies that have durable business models, resulting in sustained growth. This index consists of 30 companies selected from the NIFTY 200 index, based on Return on Equity, Debt equity ratio and Variability in EPS in the previous five years.
The NIFTY 50 Value 20 Index is designed to reflect the behaviour and performance of a diversified portfolio of value companies forming a part of NIFTY 50 Index. This index consists of 20 companies which are selected on the basis of Return on Capital Employed (ROCE), Price-Earnings (PE), Price to Book Value (PB) and Dividend yield (DY).
The NIFTY 50 Value 20 Index is designed to reflect the behaviour and performance of a diversified portfolio of value companies forming a part of NIFTY 50 Index. This index consists of 20 companies which are selected on the basis of Return on Capital Employed (ROCE), Price-Earnings (PE), Price to Book Value (PB) and Dividend yield (DY).
The index is designed to reflect the performance of a portfolio of stocks selected based on a combination of Alpha and Low Volatility. It intends to counter the cyclicality of single factor index strategy and provides investors a choice to take exposure to multiple factors through a single index product.
The index is designed to reflect the performance of a portfolio of stocks selected based on a combination of Alpha and Low Volatility. It intends to counter the cyclicality of single factor index strategy and provides investors a choice to take exposure to multiple factors through a single index product.
The Nifty200 Momentum 30 Index aims to track the performance of 30 high momentum stocks across large and mid-cap stocks. The Momentum Score for each stock is based on recent six-month and 12-month price returns, adjusted for volatility.
The Nifty200 Momentum 30 Index aims to track the performance of 30 high momentum stocks across large and mid-cap stocks. The Momentum Score for each stock is based on recent six-month and 12-month price returns, adjusted for volatility.
The NIFTY500 Value 50 index consists of 50 companies from its parent NIFTY 500 index, selected based on their ‘value’ scores. The value score for each company is determined based on Earnings to Price ratio (E/P), Book Value to Price ratio (B/P), Sales to Price ratio (S/P) and Dividend Yield.
The NIFTY500 Value 50 index consists of 50 companies from its parent NIFTY 500 index, selected based on their ‘value’ scores. The value score for each company is determined based on Earnings to Price ratio (E/P), Book Value to Price ratio (B/P), Sales to Price ratio (S/P) and Dividend Yield.
Dhuraivel Gunasekaran
first published: Dec 2, 2021 09:54 am

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