Application of multi-criteria decision analysis for investment strategies in the Indian equity market

Article


Majumdar, S., Puthiya, R. and Bendarkar, N. 2021. Application of multi-criteria decision analysis for investment strategies in the Indian equity market. Investment management and financial innovations. 18 (3), pp. 40-51. https://doi.org/10.21511/imfi.18(3).2021.04
TypeArticle
TitleApplication of multi-criteria decision analysis for investment strategies in the Indian equity market
AuthorsMajumdar, S., Puthiya, R. and Bendarkar, N.
Abstract

In the Indian equity market, the Systematic Investment Plan (SIP) is the most popular strategy due to its convenience for disciplined investing regardless of market conditions. This study analyzes the excess returns of an extensive dataset of listed Indian companies from 2010 to 2019, along with a value-based version of the Multi-Criteria Decision Analysis (MCDA), to identify top performing stocks, based on their sectors and market capitalization. The findings of the study provide empirical evidence of Value Averaging (VA) as a viable alternative strategy over SIP (also known as Dollar Cost Averaging or Rupee Cost Averaging) as 352 out of 359 companies yielded higher returns under VA. The superiority of the VA strategy over the SIP was particularly marked in the consumer goods, financial services and industrial manufacturing sectors, with a clear dominance of small cap companies. The results also show that risk factors for VA strategy play an important role and should be taken into account, rather than base investment decisions on excess returns alone. The efficiency scores of individual stocks provide important insights for mutual funds, financial brokers and individual investors in India.

KeywordsStrategy and Management, Economics and Econometrics, Finance, Business and International Management
PublisherLLC CPC Business Perspectives
JournalInvestment management and financial innovations
ISSN1810-4967
Electronic1812-9358
Publication dates
Online04 Aug 2021
Print04 Aug 2021
Publication process dates
Deposited12 Oct 2021
Accepted02 Aug 2021
Output statusPublished
Publisher's version
License
Copyright Statement

© Sudipa Majumdar, Rashita Puthiya, Nandan Bendarkar, 2021.
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International license, which permits unrestricted re-use, distribution, and reproduction in any medium, provided the original work is properly cited.

Digital Object Identifier (DOI)https://doi.org/10.21511/imfi.18(3).2021.04
LanguageEnglish
Permalink -

https://repository.mdx.ac.uk/item/89862

Download files


Publisher's version
  • 41
    total views
  • 19
    total downloads
  • 0
    views this month
  • 0
    downloads this month

Export as

Related outputs

Building a resilient education system for continued and sustainable student engagement #AccountingMondays
Kishore, P., Aslam, M., Kumar, V. and Puthiya, R. 2021. Building a resilient education system for continued and sustainable student engagement #AccountingMondays. 2nd Teaching and Learning Conference: New Frontiers in Higher Education Teaching and Learning: Strategy and Planning for the Digital Learning Age. Middlesex University, Dubai, UAE (Online) 16 Jun 2021