Factor Focused: Quantitative investing for high returns

04 Feb, 20243 mins read
Factor Focused: Quantitative investing for high returns

Table Of Content

  • Our Investment Strategy for Factor Focused Mutual Funds
  • What do you invest in with Factor Focused Mutual Funds?
  • Factor Focused Mutual Funds: Pros and Cons
  • Factor Focused: Annualised past returns
  • Who should invest in Factor Focused?

Quick Summary

Participate in investing that is selective. Invest in "Factor Focused" a mutual fund portfolio that is ideal for quant geeks. This portfolio employs attributes like low volatility and high momentum, capturing distinct risk-return profiles in stocks.

Choosing assets based on certain characteristics (factors) that have historically influenced stock performance, such as value, growth, volatility, and momentum, is known as factor investing. 

Assume you are assembling a successful sports team. Rather than selecting specific players, you select attributes they have, like skill or speed. In the world of finance, stocks are chosen based on certain characteristics, such as minimal risk or strong growth potential, rather than the firm. This approach seeks to increase profits.

Consider variables as characteristics shared by stocks that perform well. Popular ones include quality, value, momentum, and scale. Value seeks out inexpensive stocks that have promise, whereas momentum seeks out winners who are on a roll. Size favors smaller firms with significant room for expansion, whereas quality gives preference to stable, successful enterprises.

Investing in factors leverages these established sources of income. By distributing your wealth among several variables, it diversifies your portfolio and might increase your chances of success. Building a resilient investment landscape is akin to having a team of professionals, each concentrating on their area of expertise.

It has been noted that factor strategies tend to exceed the Nifty 50 in a healthy way when more equities are beating the benchmark index.

A wise approach to gain exposure to the equity markets without taking on excessive risk is through factor-based techniques.

Our Investment Strategy for Factor Focused

This portfolio employs factor investing, which combines two methodologies and focuses on particular aspects like value, growth, and momentum to build portfolios. By focusing on these aspects, it aims to do better than the whole market.

  • Invest in a diversified range of low-volatility Nifty 100 stocks to get consistent returns with minimal fluctuations in price, emulating the Nifty Alpha Low Volatility 30 Index.
  • Aim for comparable index returns with an even weight distribution by investing equally in each of the 50 equities that make up the Nifty 50 Equal Weight TR Index.

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What do you invest in with Factor Focused ?

  • You get to capture booming sectors like finance, healthcare, FMCG & automobiles.
  • You get to use your funds by focusing on sectors like Oil, Gas, Power for potential growth.
  • You get to invest in India's top 100 companies, each with the same weight in the portfolio.
  • You get to invest in Indian companies with stable stock prices and potential for consistent returns.

Factor Focused: Pros and Cons


  • Increased profits by focusing on particular qualities
  • Diversification of a portfolio beyond market capitalization
  • Lower portfolio risk when the market is down.


  • A factor may experience periods of poor performance.
  • Demands a thorough comprehension of several aspects.
  • Because of the fluctuating nature of the market, factors are unpredictable.

Factor Focused: Annualised past returns 

  • In order to achieve higher returns and greater diversification, the Factor Focused portfolio employs a multi-factor strategy that combines several traits such as growth, value, and low volatility.
  • It has a high risk rating 
  • Benchmark: NIFTY 50- TRI

Want to know more?
Talk to our advisory team.

They will be happy to help you plan and manage your investments.

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Who should invest with Factor Focused Stack ?

Factor investing is best suited for investors who can tolerate possibly higher risk and rewards and who think that certain factors will continue to influence stock performance.But people should be prepared to stick with their investments during market cycles because things can perform differently over time. Factor investing is especially attractive to individuals who want to analyze market trends and modify their tactics accordingly, since it necessitates a proactive approach.

  • This is ideal for the age group of 18 years upto 50 years
  • This is for investors who delve in aggressive risk investing 
  • Investment horizon of 3+ years
  • You can expect the returns to outperform traditional market cap weighted strategies
  • This is ideal for investors with the financial goals of long term growth, risk management and income generation.
disclaimer: the information provided in this blog is for general informational purposes only. it should not be considered as personalised investment advice. each investor should do their due diligence before making any decision that may impact their financial situation and should have an investment strategy that reflects their risk profile and goals. the examples provided are for illustrative purposes. past performance does not guarantee future results. data shared from third parties is obtained from what are considered reliable sources; however, it cannot be guaranteed. any articles, daily news, analysis, and/or other information contained in the blog should not be relied upon for investment purposes. the content provided is neither an offer to sell nor purchase any security. opinions, news, research, analysis, prices, or other information contained on our blog services, or emailed to you, are provided as general market commentary. stack does not warrant that the information is accurate, reliable or complete. any third-party information provided does not reflect the views of stack. stack shall not be liable for any losses arising directly or indirectly from misuse of information. each decision as to whether a self-directed investment is appropriate or proper is an independent decision by the reader. all investing is subject to risk, including the possible loss of the money invested.

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