Dandiya & Discipline: Navratri Lessons on Factor Funds
Dandiya, Gossip & A Family Gathering
The mandap was alive with colour — twirling skirts, tinkling anklets, the aroma of freshly fried pakoras, and the steady beat of dholaks under a canopy of fairy lights. It was Navratri’s fifth night, and the Chatterjee household in Vadodara had transformed their rooftop into a festive dance floor.
Riya, visiting from Mumbai, joined her cousin Arjun in a brief lull between dance floors. As drummers switched rhythm, Riya sighed, brushing away sweat. “These nights pass too fast,” she said. But Arjun saw a flicker of concern beneath her smile.
“What’s on your mind, Riya?” he asked, handing her a glass of jaljeera.
She hesitated, then said, “I’ve been trying to grow my savings more—instead of just banking them—and one of my friends suggested factor funds. But I don’t really know what they are and how they work.”
Arjun nodded thoughtfully. The dance tunes shifted to a slow beat. “Actually, I recently rebalanced a chunk of my equity holdings into factor funds. It’s a strategy I believe in. Let me walk you through it over the dance set, if you don’t mind.”
Riya’s eyes brightened. “Please—a live demonstration would help more than Google searches.”
Steps into the Market Dance
The next dance interval carried them toward the rooftop’s edge, where the city lights met the night sky. Arjun pointed to the sea of friends dancing below. “Think of investing as a grand dance. Random steps—jumping in and out of stocks on hearsay—is volatile and exhausting. But factor funds let you follow a smoother rhythm, based on rules.”
He paused, raising his voice slightly over the drums. “Factor investing means selecting stocks using measurable traits—often called factors—such as value, momentum, quality, or low volatility. You don’t rely on gut calls; you rely on data.”
Riya frowned in concentration. “So I’m not just picking random shares—there’s a structure behind it?”
“Exactly,” Arjun said. “In India, factor-based funds have grown rapidly—from just a few thousand crores a few years ago to tens of thousands as investors begin to appreciate disciplined methods.”
He added, “One way is single-factor funds. For instance, a momentum factor fund invests in stocks that have been performing strongly recently. A value factor fund picks stocks trading below fundamentals. I also prefer multi-factor funds—they blend multiple factors to smooth performance across cycles.”
When the Beat Falters, You Don’t Stumble
As the dandiya beat softened, Riya admitted, “I once put money into a thematic tech fund just before a downturn—it sank fast. I panicked and pulled out.”
Arjun patted her hand. “That’s what many do—chase what’s hot and end up burned. Factors aren’t magic—when momentum fades or value lags, even factor funds can struggle. The trick is diversification across factors, and patience across cycles.”
He leaned in. “Also check costs and turnover. If a factor fund trades wildly, costs erode returns. Select funds with moderate expense ratios and transparent portfolios.”
Riya nodded, sipping her drink. “Okay… so, multifactors for balance. But how do I start?”
Arjun smiled. “Start small, perhaps via direct ETFs or mutual funds linked to factor indices like Nifty 200 Momentum 30 or Nifty 100 Quality 30. With these, investors can study how different factors behave over time and decide how to build their own strategies.”
He added gently, “Remember, though, these indices are just illustrations — not recommendations. It’s about understanding the process and staying disciplined across cycles.”
Riya smiled. “That sounds like a structured way to learn, instead of guessing.”
He continued, “I track exposure regularly—and sometimes trim when a factor is overheating. That discipline keeps me grounded.”
Festival, Fortune & Navia’s Tools
The final rhythms were building toward a crescendo. The air throbbed with energy. Riya said softly, “I wish there was a platform I could use to explore factor funds more systematically.”
Arjun’s eyes glinted in the fairy lights. “Navia’s All-in-One Trade & Invest App allows investors to explore ETFs, factor-based indices, and build portfolios.”
Riya was excited to hear about the app, “Then let me try it out too!” she said it with a broad smile.
As the last dandiya beat exploded, they rejoined the circle of dancers. Under the strings of lights and amidst swirling colours, Riya felt something shift—not just the rhythm of dance, but the rhythm of her financial journey.
In that swirl of steps and strategies, she realized: investing needn’t be a wild guess. Like a well-choreographed dance, factor funds could offer order, balance, and intelligence—if she stayed disciplined, observant, and patient.
This story is a fictional illustration created for educational purposes.
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