Value Investing Redefined: VAL30iETF
A factor-driven ETF positioned for India’s valuation rotation cycle
ICICI Prudential Mutual Fund
Benchmark: Nifty200 Value 30 TRI
Market Cap Mix: Large 78.6% | Mid 20.0% | Small 1.4% | Top Sector: Banks — 26.26%
👉 This ETF is a smart-beta passive strategy selecting 30 cheapest fundamentally strong stocks from the Nifty 200 universe using factor scoring.
INDEX METHODOLOGY — WHAT IS NIFTY200 VALUE 30?
The index uses a rules-based value scoring model selecting stocks with strongest valuation characteristics:
Earnings-to-Price (earnings yield)
Book-to-Price
Sales-to-Price
Dividend Yield
Weights are determined using free-float market cap × value score, capped at 5% per stock. Rebalancing occurs semi-annually to maintain exposure to the cheapest stocks systematically. This design ensures investors gain exposure to deep-value large and mid-caps without subjective stock selection.
PORTFOLIO CHARACTER & SECTOR EXPOSURE
The ETF is structurally tilted toward cyclical sectors, with significant exposure to PSUs, metals, energy, financials, and other economically sensitive industries. Its major constituents include Bharat Petroleum (~5.1%), ONGC (~5%), Tata Steel, Hindalco, Tata Motors, NTPC, and Indian Oil Corporation, forming a portfolio that is heavily oriented toward value-priced cyclical businesses rather than high-growth stocks. Such sector composition has historically performed well during phases of economic expansion, interest-rate peaks, and earnings recovery cycles, when capital typically rotates into undervalued segments of the market.
RECENT DEVELOPMENTS SUPPORTING THE THEME
Recent catalysts behind performance surge from ₹10.96 → ₹17.49:
Government infrastructure capex focus
PSU energy stock rerating
Steel/metals demand recovery
Growing adoption of rule-based investing
Investment team expansion with new manager addition
Additionally, valuation dispersion between growth and value stocks has widened — historically a precursor to value outperformance cycles.
VALUATION — WHY THIS ETF IS FUNDAMENTALLY COMPELLING
Portfolio P/E ≈ 7.88× vs market ~20–22×
This implies that the investment currently trades at roughly a 70% valuation discount compared to its peers, offers a higher dividend yield than broader market indices, and provides a strong margin of safety for investors.
Supporting factors:
PSU energy stocks are trading at roughly 1.0–1.5× book value while offering dividend yields of about 4–7%, metals companies are expanding capacity yet continue to remain undervalued, and the banking sector is benefiting from a strong credit cycle.
📊 Interpretation:
Investors are buying a portfolio of fundamentally sound companies at deep discount valuations.
Chart structure which shows a classic bullish progression:
Phase Analysis
Accumulation: ₹14–14.6 base (Nov–Dec 2025)
Breakout: Volume-supported rally above ₹14.6
Momentum Run: Rally toward ₹17 zone
Bull Flag Consolidation: ₹15.97–16.15 zone
Volume confirms accumulation during rallies and contraction during consolidation — a bullish signature.
FUTURE GROWTH EXPECTATIONS
Structural drivers expected to support long-term performance:
India GDP growth 6.5–7% outlook
Capex super cycle across infrastructure & manufacturing
Commodity demand stability
Rising dividend payouts from PSUs
Growing popularity of factor investing
Projected underlying earnings growth: ~15–20% CAGR over next 2–3 years. Even modest P/E re-rating from ~8× → 10–12× could generate strong returns.
KEY RISKS TO MONITOR
Commodity cycle reversal
Currency or global macro shocks
Sector concentration (Banks + Energy heavy)
CONCLUSION
The ICICI Prudential Nifty200 Value 30 ETF stands out as one of the most deeply undervalued systematic equity vehicles available to Indian investors today.
It combines:
ultra-low valuation multiple
dividend-rich constituents
sectoral tailwinds
systematic rebalancing discipline
Technically, the ETF is consolidating after a breakout and appears positioned for the next up-move if resistance breaks.
FINAL TAKE
The ETF is a buy on dips particularly for investors with a longer investment horizon and a preference for disciplined, valuation-driven strategies. It is best suited to long-term investors, contrarian allocators, and portfolios that intentionally incorporate factor-based allocations.
However, it may be less appropriate for short-term traders or investors focused purely on momentum strategies, as its performance is linked more to valuation cycles than short-term price trends.
Overall, it works most effectively as a satellite allocation alongside core index holdings, helping diversify portfolio style exposure while maintaining a systematic investment approach.
Disclaimer
This analysis is intended solely for informational purposes and does not constitute any investment or financial advice. All information is sourced from public company filings, analyst reports, and third-party sources believed to be reliable. In accordance with SEBI guidelines, market data is presented accordingly. Investors should conduct independent research, perform due diligence, and consult qualified financial advisors before making any investment decisions. The views expressed are personal and may be subject to errors or bias.
💬 LET US TALK
Do you believe value factor will outperform growth in the next cycle?
Are PSU and cyclical stocks value traps or hidden opportunities?
Would you choose ETF or index fund version for this strategy?
Share your perspective and join the discussion.
Excellent article. Value buy is the need of the market. It has alerady beaten Index for last 1Y, 6M and 3 M. Excellent suggestion.
But in due time Nifty 200Momentum30 may come in action.