SMART BETA PLANS DECODED: VALUE OR MOMENTUM PICK?

Momentum strategy works well in bull mkt; value shines in both recovery and bull mkts

- RUSHABH DESAI

A value strategy means investing in undervalued companies with strong fundamentals that are trading below their intrinsic value and are out of favor from a price perspective. The expectation is that, eventually, these companies will show a strong upward price movement. Momentum strategy focuses on the upward price trajectory of the companies and invests in those that are currently in high demand, and whose prices are expected to increase rapidly.

Over the years, both strategies have complemented each other effectively, especially when applied through the right, true-to-label products. They have performed well across bull and bear markets, helping investors maintain consistency and limit underperformance at the overall portfolio level.

Which strategy is the winner?