In 2025, value investing emerged as a standout strategy, driven by a broad re-rating in sectors traditionally rich in value stocks, including banking, public sector undertakings (PSUs), commodities, energy, and infrastructure.
Low volatility strategies also gained prominence, as investors shifted towards stocks with lower beta and smaller drawdowns amid domestic demand challenges and global macroeconomic uncertainty.
Equal-weighted strategies followed closely, appealing to investors seeking diversified exposure and reduced concentration risk across market segments.
In contrast, quality strategies—despite their defensive and stable nature—underperformed. Elevated valuations and a shift in investor preference toward cyclical sectors limited their impact.
Meanwhile, alpha strategies struggled to deliver, marking a sharp reversal after ranking among the top performers in 2023 and 2024. The challenging macro environment in 2025 made it difficult for active managers to consistently outperform market benchmarks.
Long-term performance
Alpha and momentum strategies have delivered strong returns over the past decade. Alpha strategies outperformed the broader market by effectively managing unsystematic risks. Momentum strategies benefited from behavioural biases—such as herding—and were rewarded for taking on trend-related risks.
Source: NSE. *2025 data is year-to-date based on 28 October 2025 closing values. Other years’ returns are calculated between the first and the last trading day closing values. 10-year return is compounded average return, calculated between 28 October 2015 and 28 October 2025. 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.
