New Delhi, Feb. 13 -- Factor strategies based on profitability metrics have historically outperformed the Nifty 50 Index, a recent study by Capitalmind Financial Services has revealed. The study underscores the effectiveness of selecting stocks using profitability measures such as gross profits to assets and return on equity to build resilient and high-performing portfolios.

Factor investing, which involves selecting stocks based on characteristics like profitability, momentum, value, and low volatility, provides a systematic and data-driven approach to investing. The study demonstrates that a profitability-factor portfolio, constructed using a composite measure, significantly outperformed the Nifty 50 over the long term.

A Rs.100 inves...