The indices
| Index | Rule | Rebalanced |
|---|---|---|
| Nifty200 Momentum 30 | 30 stocks from Nifty 200 with the highest 6- and 12-month risk-adjusted returns | Semi-annually |
| Nifty200 Quality 30 | 30 stocks with high return on equity, low debt to equity and stable earnings growth | Semi-annually |
| Nifty500 Value 50 | 50 stocks with high earnings, book value, sales and dividend yields relative to price | Semi-annually |
| Nifty100 Low Volatility 30 | 30 least volatile stocks in Nifty 100, by one-year standard deviation of daily returns | Quarterly |
Published index returns to 30 September 2026
Total return indices, which include dividends, in % a year; one-year figures are absolute. These are past index returns as published by NSE Indices, not results of any QuantPower strategy.
| Index | 1 year | 5 years | Since base (April 2005) |
|---|---|---|---|
| Nifty500 Value 50 | +6.89 | +22.26 | +16.35 |
| Nifty200 Momentum 30 | −0.47 | +9.28 | +18.30 |
| Nifty200 Quality 30 | −5.42 | +6.40 | +16.64 |
| Nifty100 Low Volatility 30 | −4.68 | +8.12 | +16.45 |
| Nifty 50 (for comparison) | −7.09 | +6.38 | — |
Sources: NSE Indices factsheets as on 30 September 2026, the latest monthly factsheets on niftyindices.com on 20 October 2026 (total return rows); the Nifty 50 row is from NSE Indices' Index Dashboard for September 2026, also on a total return basis. Since-base figures are compound annual returns from the factor indices' common base date of 1 April 2005.
What changed between 2021 and 2026
Momentum led most of the 2020 to 2024 bull market. NSE's whitepaper shows the Nifty200 Momentum 30 beating the Nifty 200 in four of the five calendar years from 2020 to 2024, by about 25 percentage points in 2021 and 17 in 2023. Since its April 2005 base it has returned 18.3% a year, the highest of the four factor indices here.
Then it lagged. In calendar 2025 the momentum index returned −4.6% while the Nifty 200 gained 9.6%. In the year to 30 September 2026 it was close to flat (−0.5%): ahead of Nifty 50 (−7.1%), but well behind value.
Value held up. The Nifty500 Value 50 returned 6.9% in the year to 30 September 2026 and 22.3% a year over five years. Oil and gas, financial services, metals and power made up about three-quarters of the index at that date.
Quality and low volatility fell less than the market. Their one-year returns to 30 September 2026 were −5.4% and −4.7%, against −7.1% for Nifty 50, with betas to Nifty 50 of 0.86 and 0.87.
Risk, not just return
| Index | 1-year volatility | Beta to Nifty 50 | Correlation with Nifty 50 |
|---|---|---|---|
| Nifty200 Momentum 30 | 18.63% | 1.18 | 0.86 |
| Nifty200 Quality 30 | 13.58% | 0.86 | 0.85 |
| Nifty500 Value 50 | 16.07% | 0.93 | 0.78 |
| Nifty100 Low Volatility 30 | 12.18% | 0.87 | 0.96 |
| Nifty 50 (for comparison) | 13.46% | 1.00 | 1.00 |
Source: NSE Indices, Index Dashboard for September 2026 (one-year figures to 30 September 2026, from total return index values).
Low volatility and quality did what their names suggest: the smallest swings and betas below 0.9. Momentum had the highest long-run return and also the highest volatility and beta in this table.
What this means for rule-based traders
- Factors rotate. Momentum beat the Nifty 200 in four of the five years from 2020 to 2024, then lagged it in 2025, while value led over one, three and five years to September 2026. A strategy built only on 2020 to 2024 data would have been fitted to a momentum market. Walk-forward testing across both periods shows whether rules hold.
- Momentum needs an exit. Momentum strategies earn in trends and lose in reversals. A trailing stop or a regime filter, such as pausing when the index falls below its 200-day average, is part of the strategy, not an add-on.
- Value needs patience. Value stocks can lag the market for long stretches before they re-rate, so holding periods of months, not days, suit it.
- Low volatility is a risk tool. Its returns matched or beat Nifty 50 with lower volatility, which helps strategies that size positions by volatility.
- Costs apply. Semi-annual rebalancing keeps index turnover low; a daily factor strategy pays far more in brokerage and STT. Our STT tax calculator shows the cost per trade.
Building a factor strategy in QuantPower
- Pick a universe, such as Nifty 200 stocks with F&O contracts.
- Define the rule: for example, buy the 20 stocks with the highest 6-month return, rebalance monthly, hold with a 10% trailing stop.
- Backtest across 2021 to 2026, and compare results in 2020 to 2024 with 2025 and 2026.
- Run it in paper trading for a full rebalance cycle.
- Go live with position sizes you set and an MTM stop loss.
The rule in step 2 is an example to test, not a recommendation. Its results would be your own backtest, not the index figures in this report.
Index funds and ETFs tracking these factor indices are also available for investors who want the exposure without running a strategy. Stock SIPs in QuantPower can automate regular purchases of stocks and ETFs.
Related guides
- Momentum breakout strategy: a rules-based momentum approach you can test
- Swing trading strategy: automated swing and delivery trades in stocks
- Backtesting: test factor rules on past data before you trade them
- Avoiding overfitting: why rules fitted to one market can fail in the next
Start your free trial
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Frequently asked questions
Which factor has performed best in India?
Over the long run, momentum: 18.3% a year from April 2005 to 30 September 2026 on a total return basis, against 16.4% to 16.6% for value, low volatility and quality, according to NSE Indices' factsheets. NSE's whitepaper put momentum at 19.2% a year to February 2026, against 15.1% for Nifty 200. Over the latest one and five years, value led. Past index returns do not predict future ones.
Why did momentum lag in 2025?
Momentum indices hold the stocks that have risen most. When market leadership changed, those stocks lagged the index, and the semi-annual rebalance was slow to rotate out of them. In calendar 2025 the Nifty200 Momentum 30 returned −4.6% against 9.6% for Nifty 200, according to NSE's whitepaper.
Is factor investing the same as algo trading?
Factor indices are rule-based, like algos, but rebalance only every three to six months. Algo strategies apply rules more often and add entries, exits and stops. Both depend on testing the rule across different market conditions.
Can I trade factor strategies with options?
Indirectly. Traders often use the factor view for stock selection and options on index or stocks for hedging, such as a protective put on a momentum portfolio.
Sources
- NSE Indices, factsheets as on 30 September 2026: Nifty200 Momentum 30, Nifty200 Quality 30, Nifty500 Value 50 and Nifty100 Low Volatility 30 (niftyindices.com)
- NSE Indices, Index Dashboard, September 2026 (PDF)
- NSE Indices, The Science of Momentum: Capturing the Upside of Market Movements, whitepaper, April 2026 (data to 27 February 2026; calendar-year and since-base returns)