Title: Performance of quality investing during the pandemic in India

Authors: Diwahar Nadar; Pranav Prakash

Addresses: IIM Sambalpur, Near Ghoshala, Basantpur, Odisha 768025, India ' Faber Capital, 904, Tower B, Global Business Park, MG Road, Gurugram – 122002, India

Abstract: Studies have confirmed that quality stocks possess traits which allow them to yield superior returns. The study aims to critically test the idea by evaluating the performance of quality investing strategy in the Indian market during the COVID-19 crisis. To achieve the objective, six portfolios were created and rebalanced based on six key quality tools and another set of six portfolios was also created to reflect quality-value combined strategy. Portfolio performance was assessed using various risk/return metrics, assessing immediate impact using event study methodology and assessing causal impact by using Granger's causality. The results indicate that quality and quality-value strategies are impacted by the pandemic shocks but specific strategies can persevere. Q score and ROIC are suitable for quality investing in the Indian market. The use of these strategies in the Indian market can play a pivotal role in the growth of passive investing.

Keywords: quality investing; COVID-19; value investing; event study; granger causality; portfolio; performance.

DOI: 10.1504/IJRM.2024.138733

International Journal of Revenue Management, 2024 Vol.14 No.2, pp.127 - 149

Accepted: 13 Jan 2024
Published online: 29 May 2024 *

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