Steady wins: Low volatility and value shine Alpha and momentum investment strategies, which consider outperforming stocks, maintained their ranks among the top three investment strategies in eight out of the last 11 years.
In 2025 so far, the low volatility strategy has taken the lead, outperforming amid market turbulence driven by tariff uncertainties, slowing earnings, export concerns, and high valuations.The value strategy, which focuses on stocks trading below their fair values, has performed well post-Covid-19 as lower interest rates, pent-up demand and higher government capex aided the share prices of undervalued companies. This strategy is the second-best performer in 2025 year-to-date, following the low volatility strategy.
When considering the average and standard deviation of returns over the last 11 years, the low volatility strategy has the best risk-to-reward ratio.
However, the risk-to-reward ratio of the value strategy is less favourable compared to other strategies.
Source: NSE. *2025 data is year-to-date based on 13 May 2025 closing values. Other years’ returns are calculated between the first and the last trading day closing values. Indices considered—Equal weight: Nifty100 equal Weight; Low volatility: Nifty100 Low Volatility 30; Alpha: Nifty200 Alpha 30; Momentum: Nifty200 Momentum 30; Quality: Nifty200 Quality 30; Value: Nifty200 Value 30; Nifty 500: Nifty 500.
