Alpha leads as other factor indices falter

Synopsis Welcome to TrendMap, your guide to the performance of different investment segments. In this edition, we present a 10-year performance tracker of various factor-based investment strategies. This map shows that no single-factor strategy consistently outperforms, making a strong case for diversification. By Sameer Bhardwaj. Listen to this article in summarized format Listen The annual returns are ranked for 6 key NSE Factor indices, with a broad-based index, Nifty 500, thrown in for comparison. This map shows that no single-factor strategy consistently outperforms, making a strong case for diversification. Alpha and Momentum top long-term factor returns Factor performance in 2026 shows that no investment style has fully escaped the challenging market environment. Alpha has been the standout performer, remaining marginally positive while most other factor strategies struggled. Its resilience highlights the effectiveness of stock selection in iden tifying company-specific opportunities. Equal Weight strategies have also held up relatively well. By spreading exposure more evenly across stocks rather than concen trating it in a handful of large-cap names, these portfolios have been less vulnerable to weakness among market leaders. In contrast, Momentum has underperformed as volatile markets and frequent trend rever sals disrupted price trend persistence. Meanwhile, Low Volatility and Quality factors, traditionally considered defensive, have lagged the broader market, suggest ing that investors have not consistently rewarded stability or stronger fundamentals during this period. With Indian equities facing pressure from elevated crude prices, geopolitical uncertainty and foreign investor outflows, experts favour multi-factor strate gies that blend different investment styles to diversify risks and navigate volatility more effectively. Long-term performance Looking beyond the recent downturn, long term results paint a different picture. Alpha and Momentum have delivered the strong est returns, demonstrating the benefits of effective stock selection and trend-follow ing strategies. Value has also generated competitive performance, showing that buying attractively valued stocks can pay off as valuations normalise over time. By comparison, Low Volatility and Quality have trailed, indicating that their defensive char acteristics have not translated into superior long-term returns. Source: NSE and ACE MF. *2026 data is year-to-date based on 3 November 2026 closing values. Other years returns are calculated between the first and the last trading day closing values. 10-year return is the compounded average return. 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. (Join our ETWealth WhatsApp channel for all the latest updates) Add as a Reliable and Trusted News Source Add Now! Read more news on nse Factor investing in India Alpha and Momentum investing Best performing investment factors Factor investing returns Long-term factor performance Alpha factor investing Momentum factor investing Smart beta investment strategies Factor-based investing in India (Catch all the Personal Finance News , Breaking News , Budget 2025 Events and Latest News Updates on The Economic Times .) Subscribe to ET Prime and read the ET ePaper online. ...more Add Comment