Equal Weight, Quality, Momentum or Low Volatility-—Why no single factor investing strategy can guarantee you steady long-term returns

Value holds steady, but low volatility steals spotlight in 2025

The value strategy has remained among the top three factor strategies since 2021. Value investing tends to perform better when markets are on an upswing. Equity markets witnessed strong growth post-Covid-19, driven by lower interest rates, robust demand, and higher government capex. On the other hand, the low volatility strategy attained the highest rank in 2025 so far, after ranking among the bottom three strategies in three out of the four years between 2021 and 2024. With markets seeing increased turbulence in 2025 due to concerns over earnings and export growth, the low-volatility strategy outperformed.

In terms of probability of loss, the value strategy delivered negative returns in four out of 11 years, whereas the low volatility strategy posted losses in only two. Comparatively, Nifty 500 recorded negative returns in three out of 11 years.

Source: NSE. *2025 data is year-to-date based on 8 April 2025 closing values. Other years returns are calculated between the first and the last trading day closing values. Indices considered: Nifty 500:Nifty 500 Index, Alpha: Nifty Alpha 50, Low Volatility: Nifty100 Low Volatility 30, Quality: Nifty100 Quality 30, Momentum: Nifty 500 Momentum 50, Value: Nifty 500 Value 50, Equal Weight: Nifty100 Equal Weight. The Nifty 500 index is included to ascertain (or compare) the effectiveness of factor-based investing strategies relative to investing in a broader (or general) market.