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Passively Active: Multi-Factor Mastery: Simplifying Smart Beta @Quality
An investor education & awareness initiative by Mirae Asset Mutual Fund.
Mirae Asset Mutual Fund simplifies the concept of passive funds in its newly launched investor education and awareness initiative called Passively Active.
The initiative aims to decipher the world of passive funds. In the third article of this series, the fund house takes us through the quality funds.
What exactly is the quality strategy in smart beta funds?
- Quality is a smart beta strategy that picks stocks based on qualitative factors like past profits and earnings growth
- Typically, index providers consider factors such as return on equity (ROE), debt-to-equity ratio, average change in earnings per share in the last five years to arrive at the qualitative score of a company
- In India, Nifty 200 Quality 30 Index and Nifty 100 Quality 30 Index are some of the popular indices that track the performance of funds using the quality factor
(Source AMFI AUM Data, as on 30th September 2024)
How does it matter to me?
- Gives exposure to companies with strong fundamentals and profitability characteristics
- Cost-effective way to invest in financially healthy companies
- No sectoral bias. May provide meaningful diversification within equity segment
What are the risks?
- It is excepted that Risk of volatility comes with all equity investments
- Complete focus on past performance for picking up stocks
- Over-reliance on a pre-determined formula
What's the utility of this fund?
- Investor who is aiming for medium to long term can choose Quality funds
- Existing multifactor quality and low volatility focused funds may provide stability to your investment portfolio
- May be considered for value addition in investment portfolio
IAP Disclaimers
An Investor Education and Awareness Initiative by Mirae Asset Mutual Fund. All Mutual Fund investors have to go through a one-time KYC (Know Your Customer) process. Investors should deal only with Registered Mutual Funds (RMF). For further information on KYC, RMFs and procedure to lodge a complaint in case of any grievance, you may refer the Knowledge Center section available on the website of Mirae Asset Mutual Fund.
In a newly launched investor education & awareness initiative called Passively Active, Mirae Asset Mutual Fund simplifies the concept of quality strategy.
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