We all trust the Nifty 50 and it also gives a decent returns in long terms. But the thing is when the Nifty is in downtrend or in sideways, we will not get any returns. But what is there is a combo of funds which can give you returns in every market, like a all weather portfolio.
This is where the Value and Momentum comes into picture. The value fund means finding a great company at a low price whereas the momentum means riding the momentum in the uptrend. The value gives a good returns when the market is in sideways or in downtrend market whereas the momentum flourish in the uptrend which makes it a all weather combo.
It's not that the funds will not go down, in the Covid both Value and Momentum suffered but when the market recovered, they rose like anything. And thus if we see the last 5 years data, Nifty has given around 15% CAGR and on the same time momentum and value given more than 20% each. Now the thing is where to invest. Both Mutual Fund and ETF have value and momentum funds and thus you can take any of them and start investing in it.
If your mutual fund portfolio follows a strategy then you can invest via ETF and get the similar returns. I know investing in too many funds are not recommended so you can think of creating a new portfolio for testing and thus try to test it in separate demat account with less money to see if you are OK with the ups and downs of these two funds. I would say that these funds are better than the small cap, because these funds gives similar returns like the small cap and these funds are all weather funds unlike the small cap.
