Bandhan Nifty 500 Value 50 Index Fund: Long term investment option in current market conditions

Current market scenario

The ceasefire between US and Iran provided relief to the market. However, the market has remained range bound as stalemate continues over the oil and gas supplies through Strait of Hormuz. FII flows have been negative in March, April and May month to date (source NSDL, as on 15^th May 2026). One year returns of broad market indices have been negative in last 1 year due to volatility in the market, however, several factor-based indices, have given positive returns over the same period (source: NSE, Advisorkhoj Research, as on 15^th May 2026). One of the best performing factor indices in the last 1 year has been Nifty 500 Value 50 TRI, which has given 22.6 % returns (source: NSE, Advisorkhoj Research, as on 15^th May 2026). In this article, we will review Bandhan Nifty 500 Value 50 Index Fund, a smart beta index fund, which tracks the Nifty 500 Value 50 index.

How factors drive investment returns?

Factor indices are constructed based on quantitative, rule-based investment strategies based on specific characteristics that have historically driven a portfolio's returns and risk. Factor indices select stocks from the constituents of a certain benchmark index like Nifty 50, Nifty 100, Nifty 500, etc based on different factors like Momentum, Volatility, Beta, Alpha, Dividend Yield, Value, and Quality, etc. The core idea behind factor investing is to know which specific factors, beyond the overall market make some investments do better or worse.

Source: Bandhan MF

What is value investing?

Value investing seeks to achieve excess returns by identifying stocks that are undervalued compared to their intrinsic value. Markets often misprice stocks, either overestimating or underestimating their true worth. Stocks trading at a significant discount offer a margin of safety for investors and can deliver superior returns when the market recognizes and re-rates their intrinsic value.

What is value investing?

• Value investing is a strategy that targets stocks that are presumed to trade at a price lower than their intrinsic value.


• The foundation of the value factor is the notion that cheaply priced stocks outperform pricier stocks in the long term.


• The factor takes into consideration multiple metrics focused on different areas of company valuation.


• Most common valuation metrics used are PE, PB, PS, and Dividend Yield.

Value index outperformed the broad market index over long investment horizon

The chart below shows the growth of Rs 10,000 investment in Nifty 500 Value 50 TRI versus the broad market index, Nifty 500 index over the last 20 years. You can see that the value index outperformed the broad market index.

Source: NSE, Advisorkhoj Research, as on 15^th May 2026

Consistent outperformance across years

The chart below shows the calendar year returns of the value index versus broad market index over the last 10 years. You can see that the value index outperformed the broad market index in 7 out of the last 10 years.

Source: NSE, Advisorkhoj Research, as on 15^th May 2026

Superior performance consistency across market conditions and investment tenures

The chart below shows the rolling returns distribution of the value index versus the broad market index across different investment tenures over the last 20 years. You can see that the value index had higher instances of 15%+ CAGR returns across different investment tenures (e.g. 3, 5, 10 years) and market conditions.

Source: NSE, Advisorkhoj Research, as on 15^th May 2026

SIP performance

The chart below shows the growth of Rs 10,000 monthly SIP in the the value index versus the broad market index over the last 20 years. You can see that the value index was able to create significantly more wealth than the broad market index. With a cumulative investment of Rs 24.1 lakhs over 20 years, you could have accumulated Rs 1.77 crores in Nifty 500 Value 50 TRI (versus Rs 1.03 crores in Nifty 500 TRI).

Source: NSE, Advisorkhoj Research, as on 15^th May 2026

Significantly lower PE compared to broad market index

Despite sharp market correction the PE ratio of the value index is significantly lower than that of the broad market index. Value index trading near its long term historical average valuation (PE ratio).

Source: NSE, Advisorkhoj Research, as on 30^th April 2026. Note: Nifty 500 Value 50 PE data is available in NSE from 28^th September 2018.

Sector exposure

The value index has higher exposures to sectors like oil and gas, metals and mining, power, construction material, chemicals etc. Investing in Nifty 500 Value 50 provides further sector diversification to your equity portfolio.

Source: NSE, as on 30^th April 2026

About Bandhan Nifty 500 Value 50 Index Fund

Bandhan Nifty 500 Value 50 Index Fund was launched in October 2024. The fund tracks the Nifty 500 Value 50 Index. Nifty 500 Value 50 Index comprises of the top 50 companies from the Nifty 500 index with the highest value score based on Earnings to Price ratio (E/P), Book Value to Price (B/P), Sales to Price (S/P), and Dividend Yield. Index constituents have tilt-based weights (Free Float Market Cap x Value score). Stock weights are capped at the lower of 5% or 3 times the weight of the stock in the index based only on free-float market capitalization. The index is rebalanced semi-annually in June and December.

Who should invest in Bandhan Nifty 500 Value 50 Index Fund?

• Investors seeking to benefit from unlocking 'Value Opportunities'.


• Investors having a very long-term investment horizon (minimum 5 years).


• Investors with tolerance for significant drawdowns.

Investors should consult their financial advisors or mutual fund distributors if Bandhan Nifty 500 Value 50 Index Fund is suitable for your investments.