Value-based approach adds structure during volatility
“Markets can be noisy and investor sentiment often emotional. A value framework helps distinguish companies whose prices have corrected relative to fundamentals from those that remain expensive,” said Haria.
He highlighted the Nifty200 Value 30 index, which selects stocks based on earnings yield, book value to price, sales to price, and dividend yield.
The methodology includes periodic reviews and rebalancing, which helps trim overvalued stocks while adding exposure where valuations improve, offering investors a margin of safety during corrections.
True value goes beyond simple metrics
Addressing common misconceptions, Haria emphasised that value investing is not limited to low P/E or P/B ratios.
“A stock may look cheap on a single metric but still be a value trap if it has weak balance sheets or poor capital allocation. A multi-dimensional framework reduces subjectivity and improves consistency,” he explained.
Investors should also evaluate cash-flow stability, balance-sheet resilience, and sustainability of earnings. “True value is buying what is inexpensive relative to underlying business strength,” he added.
Relevance across market cycles
Contrary to the belief that value investing is primarily for late bull markets, Haria noted its utility in all cycles.
“Even in corrective or sideways markets, investors rotate towards companies with strong cash flows and reasonable valuations. Value investing helps avoid overpaying during euphoric phases and provides a counterbalance to momentum-driven strategies,” he said.
Passive structures ensure transparency and discipline
Haria stressed the benefits of passive products for value strategies.
“A rules-based ETF provides clarity on the universe, valuation parameters, and rebalancing methodology. This consistency is critical when the style is temporarily out of favour,” he explained, adding that passive structures generally offer lower costs compared with active alternatives.
Diversified exposure within Nifty200
The Nifty200 Value 30 framework includes both large-cap and mid-cap stocks.
“There is no fixed mid-cap allocation. Exposure is determined by value scores and free-float market capitalization. Individual stock weights are capped to manage concentration risk,” Haria said.
He added that such products complement portfolios that are already growth- or momentum-heavy by providing diversification across styles and valuation starting points.
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